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61. Economic Survey of China, 2005

Publication Date:
09-2005
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
China's economic growth has averaged 9½% per cent over the past two decades. The rapid pace of economic change is likely to be sustained for some time. These gains have contributed not only to higher personal incomes, but also to a significant reduction in poverty. At the same time, the economy has become substantially integrated with the world economy. A large part of these gains have come through profound shifts in government policies. Reforms have allowed market prices and private investors to play a significant role in production and trade.
Topic:
Development, Economics, and Emerging Markets
Political Geography:
China and Asia

62. What Might the Next Emerging-Market Financial Crisis Look Like?

Author:
Morris Goldstein and Anna Wong
Publication Date:
07-2005
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This paper addresses the following question: If a financial crisis affecting a group of emerging economies were to take place sometime over the next three years, where would the crisis likely originate, how could it be transmitted to other economies, and which economies would be most affected by particular transmission or contagion mechanisms? A set of indicators is presented to gauge the vulnerability of individual emerging economies to various shocks, including a slowdown in import demand in both China and the United States, a fall in primary commodity prices, increased costs and lower availability of external financing, alternative patterns of exchange rate changes, and pressures operating on monetary and fiscal policies in emerging economies.
Topic:
Economics, Emerging Markets, Globalization, and International Trade and Finance
Political Geography:
United States and China

63. Market Comrades

Author:
R. Glenn Hubbard
Publication Date:
09-2005
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Ceremonial gift-giving is an integral part of doing business in China. The value lies not so much in the gift (whose packaging is often more elaborate), but in the possibility of cementing a mutually beneficial relationship. And so it was a few weeks ago with the headline-grabbing announcement that China would revalue the yuan against the U.S. dollar. The modest gesture may make more possible a comprehensive economic dialogue between China and the United States in the interest of both nations. The announcement on July 21 by the People's Bank of China that it would revalue the yuan, abandoning the eleven-year-old peg of 8.28 yuan per U.S. dollar, caught financial markets by surprise. The jolt led market participants to gauge effects of current (and perhaps future) revaluations on currency values and interest rates. And, some U.S. political leaders claimed a victory in the campaign to blame Chinese “market manipulation” for external imbalances facing the United States.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
United States, China, and Asia

64. Can America Rebuild the Crumbling State of U.S.-Asia Relations?

Author:
Kishore Mahbubani
Publication Date:
03-2005
Content Type:
Policy Brief
Institution:
Weatherhead East Asian Institute, Columbia University
Abstract:
Ambassador Mahbubani's address looked at previous American actions that built "reservoirs of good will" that ultimately assisted America in its ideological victory in the Cold War, especially in Asia: its sharing of the "American dream" with the world; its openness to foreign students; the international order built by the United States after 1945; and, finally, the stabilizing effects of its military presence in East Asia. However, the end of the Cold War has brought changes, and the gulf between America's self-perception and the way it is seen in the Islamic world, and China in particular, demonstrate the dwindling of those good will reservoirs.
Topic:
Foreign Policy, Defense Policy, Emerging Markets, International Trade and Finance, and Bilateral Relations
Political Geography:
United States, China, America, and East Asia

65. Output and Price Fluctuations in China's Reform Years: What Role did Money Play?

Author:
Guanghua Wan and Yin Zhang
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The Chinese economy underwent cyclical fluctuations in growth and inflation in the reform period. Contrasting views exist on the role of money in such fluctuations. This paper assesses these views employing structural VEC models based on the exchange equation. It is found that in the long run money accommodates, rather than causes, changes in output and prices. In the short run, price fluctuations are mostly attributable to shocks that have permanent effects on prices and money but not on real output. These shocks also account for a large proportion of fluctuations in money, and strongly influence the movements of output.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
China and Asia

66. What Accounts for China's Trade Balance Dynamics?

Author:
Guanghua Wan and Yin Zhang
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper proposes a structural VAR model which extends the frameworks of Hoffmaister and Roldós (2001) and Prasad (1999). The model is then used to analyse the sources of China's trade balance fluctuations in the period of 1985–2000. Efforts are made to distinguish the forces which underlie the long-run trend in trade balance from those with transitory impacts. The effects of four types of shock are examined—the foreign supply shock, the domestic supply shock, the relative demand shock, and the nominal shock. Among other findings, two emerge as important. First, the movements in China's trade are largely the result of real shocks. Second, the Renminbi is undervalued, yet changes in the exchange rate bear little on the trade balance. Therefore, monetary measures would not suffice to redress China's trade 'imbalance'.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
China and Asia

67. China's Business Cycles: Perspectives from an AD–AS Model

Author:
Guanghua Wan and Yin Zhang
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper represents a first attempt to study China's business cycles using a formal analytical framework, namely, a structural VAR model. It is found that: (a) demand shocks were the dominant source of macroeconomic fluctuations, but supply shocks had gained more importance over time; (b) the driving forces of demand shocks were consumption and fixed investment in the first cycle of 1985–90, but shifted to fixed investment and world demand in the second cycle of 1991–96 and the post-1997 deflation period; and (c) macroeconomic policies did not play an important part either in initiating or counteracting cyclical fluctuations.
Topic:
Demographics, Economics, and Emerging Markets
Political Geography:
China

68. 'Oil for the Lamps of China'—Beijing's 21st Century Search for Energy

Author:
Bernard D. Cole
Publication Date:
10-2003
Content Type:
Working Paper
Abstract:
In 1933, Alice Tisdale Hobart, wife of the Standard Oil Company of New Jersey manager in Nanking, published Oil for the Lamps of China. Hobart had traveled widely in China and proved to be a very observant imperialist. Her fictional account of her experiences, not surprisingly, focused on the role played by Western businessmen, especially those engaged in importing and selling petroleum products. One thread that runs through her work is Chinese dependence on foreign sources of energy supplies, which remains the case today. This dependence on foreign- controlled sources means that Beijing's efforts to ensure the availability of energy resources adequate to fuel the nation's economic growth have important national security implications.
Topic:
Emerging Markets, Energy Policy, and Environment
Political Geography:
China, Beijing, and Asia

69. China and Emerging Asia: Comrades or Competitors?

Author:
John W. Schindler, John G. Fernald, Prakash Loungani, and Alan J. Ahearne
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Do increases in China's exports reduce exports of other emerging Asian economies? We find that correlations between Chinese export growth and that of other emerging Asian economies are actually positive (though usually not significant), even after controlling for trading-partner income growth and real effective exchange rates. We also present results from a VAR estimation of aggregate trade equations on the relative importance of foreign income and exchange rates in determining Asian export growth. Although exchange rates do matter for export performance, the income growth of trading partners matters even more. In addition, we examine specific products and find evidence that a considerable shifting of trade patterns is taking place, consistent with a 'flying geese' pattern in which China and ASEAN-4 move into the product space vacated by the NIEs. Our results suggest that China and emerging Asia are both comrades (overall) and competitors (in specific products).
Topic:
Economics and Emerging Markets
Political Geography:
China and Asia

70. Trade Liberalization, Agriculture, and Poverty in Low-income Countries

Author:
Kym Anderson
Publication Date:
03-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper offers an economic assessment of the opportunities and challenges provided by the WTO's Doha Development Agenda, particularly through agricultural trade liberalization, for low-income countries seeking to trade their way out of poverty. After discussing links between poverty, economic growth and trade, it reports modelling results showing that farm product markets remain the most costly of all goods market distortions in world trade. It focuses on what such reform might mean for countries of South Asia and sub-Saharan Africa in particular, both without and with their involvement in the MTN reform process. What becomes clear is that if those countries want to maximize their benefits from the Doha round, they need also to free up their own domestic product and factor markets so their farmers are better able to take advantage of new market-opening opportunities abroad. Other concerns of low-income countries about farm trade reform also are addressed: whether there would be losses associated with tariff preference erosion, whether food-importing countries would suffer from higher food prices in international markets, whether China's WTO accession will provide an example of trade reform aggravating poverty via cuts to prices received by Chinese farmers, and the impact on food security and poverty alleviation. The paper concludes with lessons of relevance for low-income countries for their own domestic and trade policies.
Topic:
Agriculture, Economics, Emerging Markets, International Trade and Finance, and Poverty
Political Geography:
Africa and China