How the Chinese Economy Works, 4th edition by Rongxing Guo


405b21c6e80d7a5-261x361.jpg Author Rongxing Guo
Isbn 9783319323053
File size 9MB
Year 2017
Pages 444
Language English
File format PDF
Category economics


 

How the Chinese Economy Works Rongxing Guo How the Chinese Economy Works Fourth Revised Edition Rongxing Guo Regional Sciences Association China Peking University Beijing, China ISBN 978-3-319-32305-3 ISBN 978-3-319-32306-0 DOI 10.1007/978-3-319-32306-0 (eBook) Library of Congress Control Number: 2016958192 © The Editor(s) (if applicable) and The Author(s) 1999, 2007, 2009, 2017 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. Cover illustration: © mediacolor›s / Alamy Stock Photo Printed on acid-free paper This Palgrave Macmillan imprint is published by Springer Nature The registered company is Springer International Publishing AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Dedicated to You Map 1 Which countries match the population of Chinese provinces? Notes: (1) The equivalents are as follows: Algeria = Fujian, Argentina = Guizhou, Armenia = Tibet, Burundi = Hainan, Cameroon = Shanghai, Canada = Shaanxi, Chile = Beijing, Congo (Dem. Rep. of) = Hebei, Denmark = Qinghai, Ethiopia = Henan, France = Hunan, Germany = Sichuan, Ghana = Gansu, Iran = Jiangsu, Italy = Hubei, Jordan = Ningxia, Kenya = Jiangxi, Myanmar = Zhejiang, Philippines = Guangdong, Poland = Heilongjiang, Romania = Xinjiang, Saudi Arabia = Jilin, South Africa = Guangxi, Spain = Yunnan, Sudan = Liaoning, Uganda = Shanxi, UK = Anhui, Venezuela = Chongqing, Vietnam = Shandong, Yemen = Inner Mongolia, and Zimbabwe = Tianjin. (2) Territories outside mainland China are not included. (3) Data are as of the 2010s. vii Notes to the Text Indeed, writing a book incorporating all of the details about the diversified Chinese economies is never an easy job, since China per se is on a larger scale and perhaps more complex than any other country in the world. The present book is intended to provide information and explanations of the operational mechanisms of the Chinese economy during the pre- and post-reform periods and through national, regional, and local dimensions. It examines the driving forces—both exogenous and endogenous—and how they have influenced China’s economic development for the period since the People’s Republic of China (PRC) was founded in 1949, and especially since 1978, when China took the decision to transform its economy from a centrally planned system to a market-oriented one. In this book, a multiregional comparison of the Chinese economy is conducted in terms of natural and human resources, institutional evolution, and social and economic performances; and there is some clarification of the positive and negative consequences of the Chinese economic transformation. ix x Notes to the Text How to Use This Book In this book a few ancient Chinese fables, some of which have become popular Chinese idioms, are selected as epigraphs. Specifically, these idioms are “yi lin wei he” (ԕ䛫Ѫ༁) (Chap. 2), “dong shi xiao pin” (ьᯭ ᭸他) (Chap. 4), “jie ze er yu” (ㄝ⌭㘼⑄) (Sect. 4.4 in Chap. 4), “hui yi ji bing” (䇣५ᗼ⯵) and “bing ru gao huang” (⯵‫ޕ‬㞿㛃) (Chap. 5), “han dan xue bu” (䛟䜨ᆖ↕) (Chap. 6), “bian que zhi yan” (ᡱ呺ѻ䀰) (Chap. 7), “zi xiang mao dun” (㠚⴨⸋⴮) (Chap. 8), “zheng ren mai lv” (䜁ӪҠን) (Chap. 9), “ya miao zhu zhang” (ᨐ㤇ࣙ䮯) (Chap. 11), and “jing di zhi wa” (Ӆᓅѻ㴉) (Chap. 12). Boxed examples are inserted where appropriate in the text. It is hoped that this will be illuminating for readers from different academic backgrounds who are seeking to gain more knowledge about the ways in which the Chinese economies work. I provide some end-of-chapter case studies, some of which are based upon my previous field inspections and micro-level surveys in China. They are, therefore, very useful for researchers and students attempting to study Chinese economics and for ordinary readers who wish to keep a close watch on China and the Chinese economy in particular. In addition, a few of mathematical and technical materials that have close connections to the text are annexed to the end of the relevant chapters. The following may help readers to have a clear and concrete understanding of the entire text: • Unless stated otherwise, the geographical scope of China covers only mainland China, although Hong Kong, Macau, and Taiwan are mentioned in a number of the chapters. • Chinese names are customarily written in the order of family name (which is in the single syllable in most cases) followed by given name. • Chinese names and geographic terms in mainland China are written in China’s official (pinyin) form, while those outside mainland China are in the conventional form. • Unless stated otherwise, the statistical data used in this book are from China Statistical Yearbooks (NBS, all issues). Notes to the Text xi • For the sake of convenience, specific autonomous regions and municipalities directly under the central government will be referred to alongside provinces by a single name. New to the 4th Revised Edition In this expanded 4th revised edition, Chaps. 4, 5 and 13 are completely new; and Chaps. 8, 10 and 12 are completely revised. In addition, I have also inserted my recent research results into many other chapters. For example, a simulation exercise of China’s economic growth from 2015 till 2100 is excerpted as a case study at the end of Chap. 1. Two other case studies, “The Post-Beijing Consensus Consensus” and “How the PairingAid System Works in China,” are attached to Chaps. 5 and 9, respectively. In Chaps. 2, 10 and 12 there are three new sections (i.e., “What did Sima Qian say?” “An Interprovincial Trade Puzzle,” and “China’s New Silk Road Initiative,” respectively). The discussion of the greater China area (including Taiwan, Hong Kong, Macau and overseas economic communities), which was arranged as a single chapter in the 3rd edition, is removed from this edition. For those who still have an interest in this topic, please read the book Understanding the Chinese Economies, 3rd edn., (Academic Press/Elsevier, Oxford, 2013). Suggested Reading For further reading related to specific economic topics, see the suggestions for further reading following each individual chapter. A wide variety of academic journals now carry articles on the Chinese economy. Of the China-related journals, a short list includes The China Quarterly (Cambridge University Press); Journal of Contemporary China (Taylor & Francis); and The China Journal (Australian National University). Of the economics journals, the most consistently interesting Chinarelated articles come in the China Economic Review (Elsevier) and Journal of Comparative Economics (Elsevier). xii Notes to the Text In addition, the statistical data on China’s national and provincial economic development can be found in the following table: Title China Statistical Yearbook a A Compilation of Historical Statistical Materials of China’s Provinces, Autonomous Regions and Municipalities Regional China: A Business Economic Handbook Historical Data on China’s Gross Domestic Product Almanac of China’s Economy China Industrial Economic Statistical Yearbook Price Yearbook of Chinab Version(s) Year(s) Author(s) Publisher Chinese/English 1981–99 2000– 1949–89 SSB NBS SSB (1990) Hsueh et al. (1993) Guo CSP SSB NCUFE English English CSP WVP Chinese 2000; 2010 1952–95 PM Chinese 1981– Chinese 1988– SSB CSP Chinese 1990– ECPYC CPP EMP a Also available at the website (http://www.stats.gov.cn/eng/) for the data from 1996 onwards b Some price information is available at http://www.chinaprice.gov.cn. CPP = China Price Press; CSP = China Statistics Press; ECPYC = editing committee of Price Yearbook of China; EMP = Economics and Management Press; NBS = National Bureau of Statistics of China; NCUFE = Press of Northeast China University of Finance and Economics; PM = Palgrave-Macmillan; and WVP = Westview Press; SSB = State Statistical Bureau For news and information about China’s current political, administrative and economic conditions, please visit the following websites: http://www.cpcchina.org/ (the website of the Communist Party of China) http://english.gov.cn/ (the website of Central People’s Government of the PRC) http://www.npc.gov.cn/englishnpc/news/index.htm (the website of the National People’s Congress of the PRC) http://www.cppcc.gov.cn/ (the website of the Chinese People’s Political Consultative Congress) Notes to the Text xiii Useful websites that have the most popular topics relating to the Chinese economy or from which the reader can get access to the recent statistical data on the Chinese economy include the following: http://devdata.worldbank.org/dataonline/ http://www.chinaprice.gov.cn http://www.stats.gov.cn/eng/ http://www.cei.gov.cn/ http://www.economist.com/topics/chinese-economy http://www.economist.com/content/all_parities_china http://www.chinaeconomicreview.com/ http://www.economywatch.com/world_economy/china/?page=full Acknowledgments Many individuals have contributed to the publication of this book. I have benefited from the valuable comments received from Professor Zhao Renwei (CASS). During my visits to South Korea and Germany, I benefited from many discussions with Professors Eui-Gak Hwang (Korea University) and Thomas Heberer (University of Trier). I have also benefited from various joint research projects with Professor Hu Xuwei, Professor Zhao Renwei, Professor Li Shi, Mr. Zhang Yong, Mr. Guo Liqing, Mr. Zhao Gongzheng, Mr. Xing Youqiang, Ms. Xie Yanhong and Ms. Wang Xiaoping. Some micro-level findings used in this book are based on the field inspections and surveys. The following organizations and agencies provided generous help in carrying out my field research and the research activities: Chuangda Company, Zichuan District, Shandong Province Development and Research Center of the State Council, Beijing Government of Peixian County, Jiangsu Province Government of Weishan County, Shandong Province Guangzheng Company, Zichuan District, Shandong Province Jinggezhang Coalmine, Tangshan City, Hebei Province Kailuan Group Corporation, Tangshan City, Hebei Province Linnanchang Coal Mine, Yutian County, Hebei Province xv xvi Acknowledgments Linyi Municipal Planning Commission, Linyi, Shandong Province National Development and Reform Commission, Beijing Suqian Municipal Planning Commission, Suqian, Jiangsu Province Xuzhou Municipal Planning Commission, Xuzhou, Jiangsu Province Zaozhuang Municipal Planning Commission, Zaozhuang, Shandong Province Zhengzhou Huijin Company, Zhengzhou, Henan Province Zibo Mining Group, Zibo City, Shandong Province Many valuable comments and suggestions on part of or the whole manuscript have been received from the following individuals: Professor Pieter Bottelier (Johns Hopkins University SAIS, Washington, DC) Dr. Lyn Squire (Founder and First President of the Global Development Network, New Delhi; and Nonresident Senior Fellow of the Brookings Institution, Washington, DC) Professor José María Fanelli (University of Buenos Aires, Argentina) Dr. Gary McMahon (Senior Specialist, The World Bank, Washington, DC) Dr. Richard C. Bush (Senior Fellow, and Director of Center of Northeast Asian Policy Studies, The Brookings Institution, Washington, DC) Professor David S.G. Goodman (Director of Social Sciences, University of Sydney, Sydney) Professor Giles Chance (Guanghua Business School, Peking University) Ms. Isher Ahluwalia (Chairperson, Indian Council for Research on International Economic Relations, New Delhi) Professor Richard Cooper (Harvard University, Boston, MA) Professor Amara Pongsapich (Chulalongkorn University, Thailand) Professor Leong Liew (Griffin University, Australia) Professor Shigeyuki Abe (Doshisha University, Japan) Dr. Chalongphob Sussangkarn (former President, Thailand Development and Research Institute, Bangkok) Dr. Chia Siow Yue (Senior Fellow, Singapore Institute for International Affairs) Acknowledgments xvii Dr. Josef T. Yap (Director, Philippines Institute for Development Studies, Manila) Professor Zhang Yunling (CASS, Beijing) Professor Hiro Lee (Asian Economic Journal, Japan) Dr. Jun Li (Senior Lecturer, University of Essex, UK) Various anonymous reviewers. Among the Palgrave staff contributing to the publication of this book, Rachel Sangster (Publisher and Global Head of Economics & Finance) merit particular mention. I would also like to thank Ms. Gemma Leigh (Editorial Assistant) for keeping the production on track. However, all the views and errors in this book are the author’s. Guo Rongxing Qiaozi, Huairou, Beijing March 2016 Contents 1 A Brief History of China 1.1 The Origins of the Nation 1.2 Rise and Fall of the Empire 1.3 China in the New Millennium References 1 1 5 12 17 2 Spatial and Administrative Divisions 2.1 What Did Sima Qian Say? 2.2 Administrative Divisions 2.3 Great Regions 2.4 Geographical Belts 2.5 Southern and Northern Parts 2.6 Ethno-culture Areas 2.7 Summary References 19 19 21 27 31 34 36 40 49 3 Human and Cultural Contexts 3.1 Population 3.2 Labor Force 3.3 Education 3.4 Cultural Diversity 53 53 57 61 66 xix xx Contents 3.5 Summary References 73 81 4 Natural and Environmental Constraints 4.1 Natural Resources 4.2 Energy Production 4.3 Environmental Quality 4.4 Chinese Environmental Policy 4.5 Policy Implications References 85 85 94 99 106 115 120 5 Political and Administrative Systems 5.1 Party Versus State 5.2 Administrative Systems 5.3 Legal System 5.4 (Dis)Advantages of China’s Political System 5.5 Further Implications References 125 126 129 135 141 145 152 6 Economic Systems in Transition 6.1 An Overview 6.2 Getting Out of Plan 6.3 Labor and Employment 6.4 Production Ownership 6.5 Public Finance 6.6 Banking System 6.7 Summary Annex References 155 156 160 164 167 177 183 190 192 193 7 Understanding Chinese Economic Reform 7.1 Radical Reform: The Successful Cases 7.2 Radical Reform: The Unsuccessful Cases 7.3 Gradual/Partial Reform: The Successful Cases 199 199 202 205 Contents xxi 7.4 Gradual/Partial Reform: The Unsuccessful Cases 7.5 Whither Chinese-Style Reform? 7.6 Summary References 209 213 218 228 8 Economic Growth and Income (Re)Distribution 8.1 Macroeconomic Performance 8.2 Understanding Economic Growth 8.3 Income Distribution and Inequality 8.4 Income Redistribution and Social Security 8.5 Summary References 235 235 239 243 253 256 267 9 A Multiregional Economic Comparison 9.1 China’s Statistical Systems 9.2 Macroeconomic Performance 9.3 Real Living Standards 9.4 Regional Economic Disparity 9.5 Summary References 273 273 278 284 289 293 299 10 Spatial Economic (Dis)Integration and China 10.1 An Interprovincial Trade Puzzle 10.2 Spatial Economic Separation in China 10.3 China’s Quest for Spatial Integration 10.4 Regional Development Strategies 10.5 Summary References 307 307 313 318 324 328 336 11 Industrialization and Technological Progress 11.1 Industrialization During the Pre-reform Era 11.2 Industrialization During the Reform Era 11.3 Technological Progress 11.4 Intellectual Property Rights References 341 341 349 356 364 367 xxii Contents 12 Globalization and the New Silk Road Initiative 12.1 Historical Evolution 12.2 Toward an Open Economy 12.3 Foreign Trade 12.4 Inward and Outward Direct Investments 12.5 China’s New Silk Road Initiative 12.6 Summary References 373 373 379 384 391 397 401 403 13 Working with Chinese Culture 13.1 All About the Chinese Culture 13.2 Doing Business in China 13.3 E-Commerce in China Annexure References 407 408 413 417 421 424 Glossary 427 Index 431 List of Abbreviations ABC APEC ASEAN B2B B2C BECZ BOC C2C CCB CCP CCPCC CEPA CIC CNOOC CNPC COE CPE CPPCC EIBC FDI FIE FYP Agriculture Bank of China Asia-Pacific Economic Cooperation Association of Southeast Asian Nations Business-to-business Business-to-consumer Trans-province border economic cooperative zone Bank of China Consumer-to-consumer China Construction Bank Chinese Communist Party Chinese Communist Party Central Committee Closer economic partnership arrangement China Investment Corporation China National Offshore Oil Corporation China National Petroleum Corporation Collectively-owned enterprise Centrally planned economy Chinese People’s Political Consultative Congress Export-Import Bank of China Foreign direct investment Foreign (including Taiwan, Hong Kong and Macau) invested enterprise Five-year plan xxiii xxiv List of Abbreviations GDP GHG GNP GVAO GVIAO GVIO GVSP HRS ICBC IPR M&A MES MPS NBS NDRC NIE NMP NPC NPL ODI OECD PBC PCS PPP PRC PSE QQ Gross domestic product Greenhouse gas Gross national product Gross value of agricultural output Gross value of industrial and agricultural output Gross value of industrial output Gross value of social product Household responsibility system Industrial & Commercial Bank of China Intellectual property right Merger and acquisition Market economy status Material product system National Bureau of Statistics of China National Development and Reform Commission Newly industrialized economy Net material product National People’s Congress Non-performing loan Outward foreign direct investment Organization for Economic Cooperation and Development People’s Bank of China People’s commune system Purchasing power parity People’s Republic of China Private, shareholding or other enterprise An instant messaging software service developed by the Tencent Holdings Limited Research and development Renminbi, Chinese currency State Administration for Foreign Exchange Special administrative region Severe acute respiratory syndrome State-Owned Assets Supervision and Administration Commission Shanghai Cooperation Organization Straits Exchange Foundation Special economic zone China Petroleum & Chemical Corporation R&D RMB SAFE SAR SARS SASAC SCO SEF SEZ Sinopec

Author Rongxing Guo Isbn 9783319323053 File size 9MB Year 2017 Pages 444 Language English File format PDF Category Economics Book Description: FacebookTwitterGoogle+TumblrDiggMySpaceShare This fourth revised edition sets out to analyze and compare the operational mechanisms of the Chinese economy between the pre- and post-reform periods and through national, regional and local dimensions. It examines the driving forces – both endogenous and exogenous – that have influenced China’s economic development during the past decades. Both positive and negative consequences of the Chinese economic transformation have been clarified. A multiregional comparison of the Chinese economy is conducted in terms of natural and human resources, institutional evolution, as well as economic and social performances. This enlarged edition includes three new chapters on cultural diversity; natural and environmental resources; and, political and administrative systems. Many of the original chapters have also been significantly revised, expanded and updated according to more recent research.     Download (9MB) How Finance Is Shaping the Economies of China, Japan, and Korea China: A Guide to Economic and Political Developments World Development And Economic Systems: Theory And Applications By All Means Necessary: How China’s Resource Quest is Changing the World Law and Economics with Chinese Characteristics Load more posts

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