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61. China's Quest for Alternative to Neo-liberalism: Market Reform, Economic Growth, and Labour

Author:
Dic Lo
Publication Date:
11-2007
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
Since the turn of the century, China's state and society have focused their efforts on “constructing a harmonious society”. Viewed from the perspective of globalization, these efforts represent a quest for a model of development that deviates fundamentally from neo-liberalism. In particular, state policies and institutional reforms in recent years have tended to target at labor compensation-enhancing economic growth, rather than growth based on “cheap labor”. This paper seeks to clarify the nature of the emerging Chinese economic development model, and, on that basis, to analyze its efficiency and welfare attributes. In conjunction with an analysis of China's economic growth path, which seems to have undergone a transition from labor-intensive growth to capital-deepening growth, it is argued that the new development model does represent a more feasible and desirable pursuit than neo-liberalism. The paper concludes with a discussion on the impact of this new Chinese development model on the future direction of globalization.
Topic:
Development, Economics, Globalization, and Markets
Political Geography:
China and Asia

62. Long-Term Effects of a Recession at Labor Market Entry in Japan and the United States

Author:
Yuji Genda, Ayako Kondo, and Souichi Ohta
Publication Date:
12-2007
Content Type:
Working Paper
Institution:
Institute for Social and Economic Research and Policy at Columbia University
Abstract:
We examine effects of entering the labor market during a recession on subsequent earnings and employment for Japanese and American men, using comparable household labor force surveys. Previous analyses focus on search theoretic and implicit-contract arguments, which have their strongest effects on more educated workers. We argue that, in a country like Japan which has a dual labor market, there is an additional mechanism that affects mainly less educated workers. Namely, these workers are more likely to be trapped in the secondary sector if they graduate during a recession. We find a persistent, strong negative effect on earnings for less educated Japanese men, in contrast to no long-term effect for less educated American men; also, a substantial part of the effect for less educated Japanese men is attributed to the decreased probability of regular employment. The effect for the more educated group is more or less similar in both countries.
Topic:
Economics, International Trade and Finance, and Markets
Political Geography:
United States, Japan, America, Israel, and Asia

63. The Role of China in Asia: Engine, Conduit, or Steamroller?

Author:
Beth Anne Wilson, Jane T. Haltmaier, Shaghil Ahmed, Brahima Coulibaly, Ross Knippenberg, Sylvain Leduc, and Mario Marazzi
Publication Date:
09-2007
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
This paper assesses China's role in Asia as an independent engine of growth, as a conduit of demand from the industrial countries, and as a competitor for export markets. We provide both macroeconomic and microeconomic evidence. The macroeconomic analysis focuses on the impact of U.S. and Chinese demand on the output of the Asian economies by estimating growth comovements and VARs. The results suggest an increasing role of China as an independent source of growth. The microeconomic analysis decomposes trade into basic products, parts and components, and finished goods. We find a large role for parts and components trade consistent with China playing an important and increasing role as a conduit. We also estimate some regressions that show that China's increasing presence in export markets has had a negative effect on exports of some products for some other Asian economies, but not for other products, including those of the important electronic high-technology industry.
Topic:
Development, Economics, International Trade and Finance, and Markets
Political Geography:
United States, China, and Asia

64. Exchange Rate Pass-Through to Export Prices: Assessing Some Cross-Country Evidence

Author:
Robert Vigfusson, Nathan Sheets, and Joseph Gagnon
Publication Date:
09-2007
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
A growing body of empirical work has found evidence of a decline in exchange rate pass-through to import prices in a number of industrial countries. Our paper complements this work by examining pass-through from the other side of the transaction; that is, we assess the exchange rate sensitivity of export prices (denominated in the exporter's currency). We first sketch out a streamlined analytical model that highlights some key factors that determine pass-through. Using this model as reference, we find that the prices charged on exports to the United States are more responsive to the exchange rate than is the case for export prices to other destinations, which is consistent with results in the literature suggesting that import price pass-through in the U.S. market is relatively low. We also find that moves in the exchange rate sensitivity of export prices over time have been significantly affected by country and region-specific factors, including the Asian financial crisis (for emerging Asia), deepening integration with the United States (for Canada), and the effects of the 1992 ERM crisis (for the United Kingdom).
Topic:
Economics, Foreign Exchange, International Trade and Finance, and Markets
Political Geography:
United States, United Kingdom, Canada, and Asia

65. The Korea-US Free Trade Agreement: A Summary Assessment

Author:
Jeffrey J. Schott
Publication Date:
08-2007
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The Korea–United States Free Trade Agreement (KORUS FTA) is a historic accord that should enhance bilateral economic rela¬tions and reinforce our longstanding partnership on political and security matters. Like any negotiated deal, the KORUS FTA is not the optimal result for either country, but it provides substan¬tial benefits that make Korea and the United States considerably better off than they would be in the absence of the pact.
Topic:
Markets
Political Geography:
United States, Asia, and North Korea

66. North Korea's External Economic Relations

Author:
Stephan Haggard and Marcus Noland
Publication Date:
08-2007
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
North Korea's international transactions have grown since the 1990s famine period. Illicit transactions appear to account for a declining share of trade. Direct investment is rising, but the county remains significantly dependent on aid to finance imports. Interdependence with South Korea and China is rising, but the nature of integration with these two partners is very different: China's interaction with North Korea appears to be increasingly on market-oriented terms, while South Korea's involvement has a growing noncommercial or aid component. These patterns have implications for North Korea's development, the effectiveness of UN sanctions, and its bargaining behavior in nuclear negotiations.
Topic:
Markets and United Nations
Political Geography:
China, Asia, and North Korea

67. The Emergence of a New 'Socialist' Market Labour Regime in China

Author:
Gunter Schucher and Jutta Hebel
Publication Date:
12-2006
Content Type:
Working Paper
Institution:
German Institute of Global and Area Studies
Abstract:
China's transition to a market economy has been a process of basic institutional changes and institution building. The institutional change from a socialist labour regime (SLR) as one of the backbones upholding the traditional leninist system to a new 'socialist' market labour regime (SMLR) became particularly important for the success of economic and political reforms. This analysis is based on the analytical framework of regimes and makes use of the idea of path dependence. An ensemble of institutions, mutually interconnected and influencing each other, forms the regime and shapes its trajectory. Six institutions are identified to constitute the employment regime: (1) the system of social control, (2) the production system, (3) the system of industrial relations, (4) the welfare system, (5) the family order, and (6) the educational system. The SMLR is still characterised by its socialist past and differs from other varieties of transformation labour regimes and bears little resemblance to labour regimes in Western market economies.
Topic:
Development, Economics, and Markets
Political Geography:
China and Asia

68. Economic Survey of the Russian Federation, 2006

Publication Date:
11-2006
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
The Russian economy has been enjoying a period of robust growth, thanks largely to steadily rising terms of trade. The challenge confronting policy-makers is to facilitate Russia's transition into a period of self-sustaining, investment- and innovation-led growth. This will require a sound macroeconomic policy framework to manage the economy's adjustment to sustained high oil prices and a range of structural reforms aimed at creating better framework conditions for business.
Topic:
Development, Economics, and Markets
Political Geography:
Russia, Europe, and Asia

69. Challenges for China's Public Spending

Publication Date:
03-2006
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
China's evolution from a centrally-planned to a market-based economy is leading to major transformations of its public expenditure policies. Much progress has been made in raising infrastructure spending to a level more in line with China's development needs and in modernising mechanisms for budget planning and implementation. Nevertheless, significant challenges remain.
Topic:
Development, Government, and Markets
Political Geography:
China and Asia

70. Flying Geese or Sitting Ducks: China's Impact on the Trading Fortunes of other Asian Economies

Author:
Alan J. Ahearne, John G. Fernald, John W. Schindler, and Prakash Loungani
Publication Date:
12-2006
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
This paper updates our earlier work (Ahearne, Fernald, Loungani and Schindler, 2003) on whether China, with its huge pool of labor and an allegedly undervalued exchange rate, is hurting the export performance of other emerging market economies in Asia. We continue to find that while exchange rates matter for export performance, the income growth of trading partners matters far more. This suggests the potential for exports of all Asian economies to grow in harmony as long as global growth is strong. We also examine changes in export shares of Asian economies to the U.S. market and find evidence that dramatic changes in shares are taking place. Many of these changes are consistent with a 'flying geese' pattern in which China moves into the product space vacated by the Asian NIEs or with greater integration of trade across Asia in the production of final goods. Nevertheless, China's dramatic gains in recent years do increase the pressure on Asian economies, particularly in ASEAN and South Asia, to seek areas of comparative advantage.
Topic:
Development, Economics, Foreign Exchange, International Trade and Finance, and Markets
Political Geography:
China, South Asia, and Asia