China's economic transformation / Gregory C. Chow.

Format:

Book

Author/Creator:

Chow, Gregory C., 1929-

Language:

English

Subjects (All):

China--Economic conditions--1976-2000.

China.

Economic conditions.

China--Economic policy--1976-2000.

Economic policy.

Physical Description:

xiv, 407 pages : illustrations, map ; 26 cm

Place of Publication:

Malden, Mass. : Blackwell Publishers, 2002.

Summary:

In the two decades since the start of economic reforms in China, economic growth in the world's most populous country has been a phenomenal 9.6% per year on average. In China's Economic Transformation, Gregory Chow uses insights gained from over twenty years of teaching, travelling, working with government officials and academics, and interacting with ordinary citizens in Chinese society to address the reason for and nature of China's economic success. Combining historical-institutional and theoretical-quantitative approaches, Chow provides a penetrating and comprehensive analysis of the factors which have contributed to the transformation process. Chow's knowledge of what has happened and what is happening in China leads him to forecast an economic future with imperative worldwide implications.

Contents:

Introduction: The Transformation of China's Economy 1

Part I Historical Background and General Survey 7

1 Economic Lessons from History 9

1.2 Significant Events in Major Historical Dynasties 10

1.3 The Republic of China, 1911- 16

1.4 Summary of Historical Lessons 21

2 Experiments with Planning and Economic Disruptions 24

2.1 The Communist Party Rises to Power 24

2.2 Historical Review: 1949-78 26

2.3 A Model of the Chinese Planned Economy 28

2.4 The Behavior of Economic Units in a Planned Economy 32

2.5 Output Planning in Theory and Practice 35

2.6 Organization and Administration of Economic Planning 40

3 Economic Reform up to the Mid-1990s 46

3.1 Why Economic Reform Started in 1978 46

3.2 Agriculture 48

3.3 Reform of State-owned Enterprises 49

3.4 Price Reform 51

3.5 The Banking System 52

3.6 Foreign Trade and Investment 53

3.7 The Nonstate Sectors 53

3.8 Institutional Infrastructure 54

3.9 Reform Policies Similar to Those of Taiwan 55

3.10 Reasons for the Success of China's Economic Reform 58

Appendix China's Geography 63

4 Further Reform: Problems and Prospects 68

4.2 Enterprise Reform 69

4.3 Banking Reform 71

4.4 Foreign Trade and Investment during the Asian Financial Crisis 75

4.5 The Impact of WTO Membership 77

4.6 Prospects for Reform 83

Part II Analysis of the Macroeconomy 87

5 Economic Growth 89

5.1 The Neoclassical Model of Economic Growth 89

5.2 Data on Output, Capital, and Labor 90

5.3 A Review of Regression Analysis 93

5.4 Estimating Production Functions for China 96

5.5 Use of the Neoclassical Growth Model to Forecast GDP 99

5.6 How Large will the Chinese Economy be in 2020? 102

6 Economic Fluctuations 105

6.1 The Multiplier-Accelerator Model of Economic Fluctuations 105

6.2 Dynamic Properties of the Multiplier-Accelerator Model 108

6.3 An Econometric Method for Estimating Parameters of Linear Stochastic Equations 110

6.4 Estimating a Multiplier-Accelerator Model of the Chinese Economy 111

6.5 Econometric Models of the Chinese Economy 114

7 Macroeconomic Policies 117

7.2 Monetary Policy 119

7.3 Estimating a Dynamic Equation to Explain the Inflation Rate 124

7.4 Basic Facts about Government Revenue and Expenditure 125

7.5 Fiscal Policy 126

8 The Effects of Political Movements on the Macroeconomy 129

8.1 Specification of a Dynamic Optimization Model of the Chinese Economy 129

8.2 The Solution of the Dynamic Optimization Problem 132

8.3 Statistical Estimation 136

8.4 Measuring the Effects of Two Political Events 140

Part III Topics in Economic Development 147

9 Consumption 149

9.1 Trends in Per Capita Consumption 149

9.2 Household Expenditure Patterns 153

9.3 Rural Per Capita Consumption Expenditures in 1998 by Province 161

9.4 Consumption of Housing in Rural and Urban Areas 162

9.5 Forecasting Demand for Computers 163

10 Western Development and Environmental Policies 168

10.1 Inequality in Per Capita Consumption and East-west Disparity 169

10.2 Developing the Western Part of China 170

10.3 Environmental Policies 176

10.4 A Study of Industrial Pollution 178

11 Population 181

11.1 The Role of Population and Human Capital in Economic Development 181

11.2 Chinese Population and its Rate of Growth 183

11.3 Population Policy 186

11.4 Evaluation of China's Population Policy 189

11.5 Economic Explanation of the Birth Rate 191

12 Human Capital 194

12.1 The Importance of Human Capital and its Measurement 194

12.2 Labor Supply and Demand 196

12.3 Investment in Human Capital 202

12.4 Measuring the Rates of Return to Schooling in China 210

12.5 Health Services 212

Part IV Analysis of Individual Sectors 217

13 The Banking and Financial System 219

13.1 Commercial Banks 219

13.2 The People's Bank 221

13.3 Factors Affecting the Functioning of the Banking System 223

13.4 Possible Weaknesses of the System 225

13.5 Possible Directions of Reform 227

13.6 The Financial Condition of Commercial Banks and the Bad-loan Problem 229

13.7 Other Financial Institutions 229

13.8 The Role of the Chinese Government in Reforming the Financial System 233

14 Shanghai Stock Price Determination 237

14.2 A Model of Stock Price Determination 238

14.3 Empirical Findings from the Shanghai Stock Exchange 241

14.4 Comparison with Findings for Hong Kong and New York Stocks 245

15 The Behavior of State Enterprises 249

15.1 Organization of a State Enterprise under Central Planning 249

15.2 Planning and Operations of a Large-scale State Enterprise 253

15.3 A Simple Model of a State Enterprise under Central Planning 257

15.4 A Simple Model of a State Enterprise after Initial Reform 260

15.5 State Enterprise Restructuring in the Late 1990s and its Effects on Enterprise Behavior 263

16 The Nonstate Sectors 268

16.1 Relative Growth of Nonstate Sectors 268

16.2 Private Enterprises Prior to 1949 270

16.3 Economic Conditions for the Growth of Township and Village Enterprises 270

16.4 Econometric Measurement of the Relative Efficiency of State Enterprises and TVEs 273

16.5 Characteristics of a Free-market Economy 274

16.6 Characteristics of the Chinese Market Economy 277

17 Foreign Trade 281

17.1 Some Statistics of China's Foreign Trade 281

17.2 Explanation of Trading Patterns under Free Trade 282

17.3 The Determination of Foreign-exchange Rates 288

17.4 China's Foreign Trade Policy 293

17.5 Chinese Foreign Trade Problems in the Early 1980s 296

18 Foreign Investment 304

18.1 The Role of Foreign Investment 304

18.2 Historical Developments 306

18.3 The State of Foreign Direct Investment (FDI) as of 1999 307

18.4 Policies for the Regulation of Foreign Investment 310

18.5 Opportunities and Problems for Foreign Investors 312

18.6 How Attractive is China for Foreign Investment? 316

18.7 The Impact of WTO Membership on Foreign Investment 317

18.8 A Proposal to Increase Foreign Investment from Taiwan 318

Part V Studies of Economic Institutions and Infrastructure 321

19 Use or Misuse of Assets 323

19.2 Laws of Asset Management 325

19.3 Managing One's Own Person 328

19.4 Managing Physical Assets 330

19.5 Managing Collections of Assets under the Responsibility System 332

20 The Legal System and the Role of Government 338

20.1 The Legal System prior to 1949 338

20.2 The Legal System since 1949 340

20.3 The Role of the Legal System in a Market Economy 343

20.4 The Economic Role of Government 345

20.5 The Government's Decision Process 348

21 The Education System and Policy 352

21.1 The Education System prior to 1949 352

21.2 The Education System after 1949 353

21.3 Education Policy 354

21.4 Economics Education 357

22 Taking Stock and Looking Ahead 367

22.1 Taking Stock 367

22.2 Prospects for the Chinese Economy up to 2020 379

Conclusion: Lessons for the Study of Economic Transformation 386.

Notes:

Includes bibliographical references and index.

ISBN:

063123330X

OCLC:

49530290