...property rights in the case of China and its non-state sector as a transitional economy; can they be efficient? Index Introduction I. Past to present People’s Republic of China, towards transition Property rights, defined p. 3 p. 3-4 II. III. p. 5-6 The Chinese Model p. 6-8 Evolution vs. Big Bang, and the employment of ambiguous property rights Current p. 8-11 China, mid-transition and the functionality of ambiguous property rights in transition Future China, post transition, and does one size fit all? p. 11-12 IV. V. Conclusion Bibliography p. 13 p. 14-15 2 Introduction China’s remarkable and unmatched growth of the past decades, regardless of it ambiguous property rights and a relatively weak legal framework, have puzzled governments and economists to date. The contrast between China’s transitional economy and those in Eastern Europe and the former Soviet Union could not be more striking. Whereas the transition of the latter two has been a struggle and have sparked recession, China’s transition has brought about an economic boom and its gradual reform path has challenged the belief that gradual reform and public ownership cannot work as a transitional strategy. This paper aims to analyse the Chinese Model of economic transition with a focus on the structure of property rights in the system, primarily in the rural sector. First, a brief historic background of China and its course towards transition is provided, after which property...
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... B- Post Mao era (Deng era 1976-1994)………..…………………………………………………….……….p 5 II- The process of transition……………………………………..………………………………………………………..p 5 III- Success and consequences of China’s economic transition….………………………………………p 6 IV- Challenges…………………………………………………………………………….……………..………...……………p 8 CONCLUSION…………………………………..………………………………………………………………………………..p 9 BIBLIOGRAPHY…………………………………..……………………………………………………………………….……p 11 APPENDICES…………………………………..…………………………………………………………..……………….…..p 12 INTRODUCTION | China is now becoming the world’s most prominent up and coming super power. It is a country steeped with a long and chequered past and the history books will show that it deserves its place amongst world leaders. In the last century China has experienced some of its most turbulent years and only in the very latter part of the century has it come to overthrow the oppressive shackles that have haunted the nation from the Mao era. However the case could be argued that the Mao era may have been the catalyst for much of the good that can be found in the Chinese approach to growing a stable economy. Rather than introducing radical reforms and provoking social unrest, the Deng era of Chinese rule introduced a two-track transition process that has allowed the country to gradually move from a centrally planned economy to a wiser free market one. China’s “two track transition” resonates from the countries understandably negative outlook on radical reforms given the countries...
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...ECON3007 Economic Policy Analysis Topic: Institutions and Economic Reforms Wendy Carlin This topic focuses on the role of institutions in economic growth and the implications of this for the design of economic reforms. We examine why some large-scale economic reforms have been surprisingly successful and others have been disappointing. It will be argued that the consistency between existing institutions in the economy and the reforms is an important factor in determining reform success. We look at property rights and contracting institutions, at the experience of transition economies – both in the former Soviet bloc and China and at reform policies including privatization. The empirical techniques that we study include cross-sectional and panel regressions using aggregate (i.e. country-level) data and micro-economic data. Key readings: Institutions and growth: Acemoglu, D., Johnson, S. and Robinson, J. A. (2001) (AJR) “The Colonial Origins of Comparative Development: An Empirical Investigation”. The American Economic Review, Volume 91, Number 5. Use the UCL Economic Journals page and choose the Atypon link. Acemoglu, D., Johnson, S. (2005) (AJ) “Unbundling Institutions” Journal of Political Economy Volume 113, Number 5, 949-995. Use the UCL Economic Journals page. Deaton, A. (2009) ‘Instruments of Development: Randomization in the Tropics and the Search for the Elusive Keys to Economic Development’. NBER Working Paper 14690. Use google. Transition: China and Russia ...
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...China’s Economic Growth 1978-2025: What We Know Today about China’s Economic Growth Tomorrow Views of the future China vary widely. While some believe that the collapse of China is inevitable, others see the emergence of a new superpower that increasingly poses a threat to the U.S. This paper examines the economic growth prospects of China over the next two decades. Extrapolating past real GDP growth rates into the future, the size of the Chinese economy surpasses that of the U.S. in purchasing power terms between 2012 and 2015; by 2025, China is likely to be the world's largest economic power by almost any measure. The extrapolations are supported by two types of considerations. First, China’s growth patterns of the past 25 years since the beginning of economic reforms match well those identified by standard economic development and trade theories (structural change, catching up, and factor price equalization). Second, decomposing China’s GDP growth into growth of labor and other variables, the near-certain information available today about the quantity and quality of Chinese laborers through 2015, if not several years after, allows inferences about future GDP growth. Short of some cataclysmic event, demographics alone suggests China’s continued economic rise. If talent is randomly distributed in the world population and if agglomeration of talent is important, then the odds are strongly in China’s favor. Introduction The rapid economic growth of China since the...
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...Hong Kong economy are that openness and freedom from foreign exchange rate and fiscal policy, reasonable economic policies, and non-interventional approaches to economic policymaking, and high trade volume. Even though government plays a minor role during the structural transformation and economic growth, it does not mean that government’s role is not important. In fact, government’s approaches help Hong Kong succeed in many ways. The first part of the essay will review brief background when Hong Kong was under British governance in 1950s and 1990s. Second part of this paper will investigate the rise of manufacturing in Hong Kong and during 1950s and 1960s. Third part of this paper will focus on the change in type of manufacturing during 1970s. Fourth part of this paper will examine the rise of financial sector in Hong Kong during 1980s to 1990s. In each of the periods, government’s impact on the economy will also be discussed. Hong Kong’s economy miracle between 1950s and 1990s is an excellent economic model to learn from for the rest of the world. Hong Kong government’s hands-off approach would also give guidance of economic development for other countries. Brief Background of Hong Kong Hong Kong is often considered a place where integrates the essence of both Chinese and western elements. Hong Kong’s unique characteristic was a result of colonial rule and economic development goes hand in hand. British occupied Hong Kong after Qin dynasty lost the Opium War in 1842, and...
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...1.0 Summary of the article It is not surprise to everyone that China has a major role in the global economy since its economic growth has moves the country into the ranks of middle income countries. Unfortunately, issues that China faced in most recently are whether it can contribute to the vigour of the worldwide economy and manage its internal stability. China's economy is now weakening and its GDP is perhaps below the government target of 7%. Investment sentiment is the weakest indicator, while the production level in China's industries has dropped which left surplus production capacity in the industries. Although China growth is slowing down, the probability that it will collapse suddenly is small. 2.0 Discussion The biggest problem in China is that the massive debt explosion is now threatening its entire economy, leading to a reduction in capital investment. There has been a boom in the Chinese stock market, yet buying share with borrowed money had magnified the fall when companies with huge debt begin to sell their investments to pay debts (Walker, 2015). Shanghai Composite Index decreased about 8.5% in August followed by China economy downturn which perhaps was the biggest decrease since 2007 (McHugh, 2015). Overreaction in Chinese market then affect the world such as Japan's Nikkei index had slipped by 4.6%, while the Eurofirst 300 index has had its worst day since 2009 (Matthews, 2015). However, falling of stock markets in itself will not cumber the global economy...
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...Growing China: Will China Share Superpower Status with United States? After the fall of the Soviet Union in 1991, United States has remained her superpower status and has established her hegemony all around the world. In the 21st century, everybody waits for a country to fill the gap that was left by the Soviet Union to compete with the United States. Now, China is the most potential country that can be a superpower competing with US. China has developed herself since she became a communist state, especially, it is the past 20 years that China has improved from a state once isolated form rest of the world, into a regional superpower as potentially a state having the capacity to change the future direction of world events. By 2020, China hopes to compete with United States, however, that is not so easy for US to share her superpower status with China and US does not want to engage in another Cold War. First of all, what is a superpower? We need to define superpower to understand that China will possess the status of what and whether she benefits from it. During the second half of the twentieth century the concept of superpower status has been unique and without precedent. This is due to the fact that in this period, a superpower by definition possesses nuclear capabilities. While the UK, a superpower in the nineteenth century, now possesses nuclear capabilities, it is lacking in other attributes. Today’s superpower possesses four attributes, which confer upon it this status...
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...1. Conduct a PESTEL analysis of China 1.1 Political Analysis China is well-known as one of only five communist nations left in the world, which determined its socialistic ideology and government are different from most countries all over the world. As claimed, china is an investment-welcomed nation since joined WTO in 2001. Leaders of China are also trying to build an open and comfortable environment to foreign investment. The influx of Foreign Direct Investment in China is increasing steady from 2007 and China has been the second largest nation of accepting FDI. (see Exhibit below) Wine has always been seen as a luxurious good in domestic market, so wine importation got a strict duty policy as duty of 14%, add-value tax of 17% and consumption tax of 10%. However, as more and more competition in international trade market, New Zealand has got zero-duty privilege in wine importation industry from China government, followed by Chile and Australia, who will get zero-duty privilege in 2015 and 2019 respectively. Although Chinese politics is stable relatively, there still are some issues like crime and corruption. In 2013, Xi Jinping took power from Hu Jingtao as present president of China and paid more attention to those issues in period of social transition. 1.2 Economic Analysis China’s economy had seen a rapid growth in these years, which was benefit from decreasing intervention and increasing market oriented. The first 20 years in 21 century are very important...
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...BOFIT Discussion Papers 19 • 2011 Zhichao Zhang, Nan Shi and Xiaoli Zhang China’s new exchange rate regime, optimal basket currency and currency diversification Bank of Finland, BOFIT Institute for Economies in Transition BOFIT Discussion Papers Editor-in-Chief Laura Solanko BOFIT Discussion Papers 19/2011 23.7.2011 Zhichao Zhang, Nan Shi and Xiaoli Zhang: China’s new exchange rate regime, optimal basket currency and currency diversification ISBN 978-952- 462-714-6 ISSN 1456-5889 (online) This paper can be downloaded without charge from http://www.bof.fi/bofit Suomen Pankki Helsinki 2011 BOFIT- Institute for Economies in Transition Bank of Finland BOFIT Discussion Papers 19/2011 Contents Abstract ................................................................................................................................................ 3 Tiivistelmä ........................................................................................................................................... 4 1 2 Introduction ................................................................................................................................ 5 Theoretical model ..................................................................................................................... 11 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 3 Policy goal .................................................................................................................... 12 Trade...
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...leads to a better quality of life for the nation’s citizens. So, governments spend billions of dollars as an attempt to help the nation’s economy grow, which should lead to a better life for the nation’s citizens. This seems like it has good intentions, but many governments borrow the money they use for this spending and that only creates new problems. In the United States, the total debt is greater than its total economic output, and this debt will only hinder future and long term growth. On top of all that, the idea that a better national economy will make the citizens happier overall contradicts the idea that money doesn’t buy happiness. Does this mean that money actually does buy happiness, or does it mean that the economy doesn’t have anything to do with people’s happiness? Some regions are poorer than the United States and yet are happier, an example is Latin America. Other richer countries, like the United States, Japan, and China have had great economic growth over the past few decades, yet happiness has changed very little and in the case of China it has even declined. So does this mean that the economy doesn’t have anything to do with people’s happiness? This statement seems absurd to many people living in countries with struggling economies. If you talk to most people they will want the economy to get better. If you look at government discretionary spending...
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...Can institutional reform provide a sufficient explanation for China’s rapid economic development over the past three decades? What needs to happen in order for growth and development to be maintained in the future? The People’s Republic of China is the world’s fastest growing economy following the economic and institutional reforms from 1978 which signaled the beginning of an economy in transition. This shift from a centrally planned system to a market oriented economy resulted in an overall improvement in China’s living standards and productivity. Since then, China has extensively engaged in a range of international organisations and agreements, such as, the participation in the World Trading Organisations, as well as increasing their level of foreign trade and investment, formation of rural enterprises and private businesses, financial flows and globalisation. These are the fundamental reasons for China’s rapid economic growth over the last three decades. There are various definitions of economic growth, however, according to WebFinance (2012) economic growth is referred to the “increase in a country's productive capacity, as measured by comparing gross national product (GNP) in a year with the GNP in the previous year”. Prior to 1978, China’s average annual growth was at a low 6% and with negative declines of up to -27% in 1961. Since the reforms, GNP has been positive and steadily increasing with fewer ups and downs (Hu and Khan, 1997). The Chinese economy has been averaging...
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...Geography 3 1.2 Population 4 1.3 Political System 4 1.4 Economic System 4 1.5 Market Spotlight 5 1.6 Trade Agreements 6 2 Doing business in Venezuela (Compare with China) 6 2.1 Starting a business 7 2.2 Dealing with construction permits 8 2.3 Employing workers 8 2.4 Registering property 9 2.5 Getting credit 9 2.6 Protecting investors 10 2.7 Paying taxes 11 2.8 Trading across borders 12 2.9 Enforcing contracts 12 2.10 Closing a business 13 2.11 The ranks trend of 10 Factors from 2007 to 2010 in Venezuela 13 2.12 The ranks trend of 10 Factors from 2007 to 2010 in China 14 3 Global Competitiveness Index 15 3.1 The comparison (Score) of GCI with Venezuela and China in 2010 16 3.2 The comparison (Rank) of GCI with Venezuela and China in 2010 16 3.3 The trend of GCI (Rank) 2 countries from 2002 to 2010 17 3.4 The trend of GCI (Score) 2 countries from 2005 to 2010 18 4 Conclusion 18 4.1 Market Challenges in Venezuela 18 4.2 Market Opportunities in Venezuela 19 4.3 Experience from China 19 4.4 Recommendation of Strategy 20 4.5 Venezuela Economy: Impact of Nationalization 20 *Executive Summary My selected country Venezuela is the worst rank, in order to evaluate the business environment, first, I do some research for Venezuela profiles, which include basic information, population, political system, economic system, market spotlight, and trade agreement. Second, according...
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...rise of China – a new leader for a new world? The rise of China – a new leader for a new world? * Table of Contents 1 About China (GEOGRAPHY, facts) 1 2 Current Situation 3 3 Political Situation 6 4 China and US 7 5 References 9 The rise of China – a new leader for a new world? In the world, China is the third largest country which is situated just behind Canada and Russia. But the population of china is one-fifth of world's population approximately 1.2 billion people live in China. About China (GEOGRAPHY, facts) China is quite diverse land containing mountains, fertile river basins and deserts. Most of the western China is mountains with Tian, Pamir ranges and Himalaya. The western China also covered with the large desert. However, the Central China contains mountainous regions. The Rivers similarly play a main role in the China, both for irrigation and for the transportation. Most of the southern rice fields and northern wheat fields are irrigated from the rivers. Some interesting Facts about China: 1) The Great Wall is famous in whole world. This wall was built over 2,500 years before to protect against the invaders from north. The Troops would patrol wall to protect China against the attack. Just the once over the 6,000 miles long, this wall is currently around 3,750 miles long. 2) In china we can see major industries. For numerous years, China is working for the economic development of the country. But, most of the China people still...
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...flows Global FDI flows increased by 9 percent in 2013 to $1.45 trillion, up from $1.33 trillion in 2012. Although the share of developed economies in total global FDI flows remained low, it is expected to rise over the next three years to 52 per cent. Global inward FDI stock rose by 9 per cent, reaching $25.5 trillion. It reflects the rise of FDI inflows and strong performance of the stock markets in many parts of the world. 2. FDI inflows FDI inflows rose 9 percent in 2013 revealed a moderate pickup in global economic growth and some large cross-border M&A transactions. The increase of FDI inflows was widespread in all major economic groupings − developed, developing, and transition economies. Developed countries’ FDI inflows grew by 9 percent, reaching $566 billion. Developing economies reached a new high of $778 billion, accounting for 54 percent of global inflows. Developing Asia remained the world’s largest recipient region of FDI flows, and China remained the recipient of the second largest flows in the world. In 2013, APEC absorbed half of global flows, similar to the G-20, while the BRICS received more than one fifth. Besides, FDI flows to Latin America and the Caribbean registered a 14 percent increase....
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...America (and the “transition crisis” deeper and more sustained than expected in former socialist economies). “is that there is no unique universal set of rules…. [W]e need to get away from formulae and the search for elusive ‘best practices’….” (p. xiii).4 The record - RESULTS Here is how Learning from Reform summarizes the surprises of the 1990s. First, there was an unexpectedly deep and prolonged collapse in output in countries making the transition from communism to market economies. More than a decade into the transition, many countries had still not caught up to their 1990 levels of output. Second, Sub-Saharan Africa failed to take off, despite significant policy reform, improvements in the political and external environments, and continued foreign aid. The successes were few—with Uganda, Tanzania, and Mozambique the most commonly cited instances—and remained fragile more than a decade later. Third, there were frequent and painful financial crises in Latin America, East Asia, Russia, and Turkey. Most had remained unpredicted by financial markets and economists until capital flows started to reverse very suddenly. Fourth, the Latin American recovery in the first half of the 1990s proved short-lived. The 1990s as a whole saw less growth in Latin America in per-capita GDP than in 1950-80, despite the dismantling of the state-led, populist, and protectionist policy regimes of the region. Finally, Argentina, the poster boy of the Latin American economic revolution,...
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