...The essential institution of China is called Regionally Decentralized Authoritarian (RDA) system. “The RDA system is characterized by a highly centralized political and personnel controls at the national level and a regionally decentralized administrative and economic system.” There are many key features of this RDA system which impacts a lot on China’s reform practices in the past 30 years. First of all, one of the features is that the sub-national governments are more powerful than other sub-national government in the world because they are responsible for deeper and wider regional matters than simply fiscal issues. Another feature is that regional government is encouraged to be economically self-contained in order to develop faster than other region after the reform started. Moreover, another feature is that each regional government, especially those special economic zones are competing with other region by attracting more Foreign Direct Investment in order to get more incentive and promotion from the central government. Without all these above features, China’s reform practices and performance would be substantially different from what has happened in the past 30 years. Although China is highly decentralized economically, it is neither a de jure nor a de facto federal state because of the backbone of China’s RDA regime, the Chinese Communist Party. CCP makes the RDA regime fundamentally different from a federal system by constituting China’s non federal status and...
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...Even their most ardent supporters now concede that growth has been below expectations in Latin 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...
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...Service sector in China * Structures, restrictions and recommendations University: Shanghai University – School of Economics Course: Service economics and Trade Tutor: Professor Dong Yinguo Author: Hake Feka Student ID: 13D62241 Abstract The result of the market-oriented reforms in China along with its opening up to the outside world were rapid industrialization and integration in international trade. The service sector has perceived a fast, continued development and has made huge contributions to the overall economy in terms of its share of gross domestic product (GDP) and employment. However, the development of the service sector has been inadequate and has lagged behind its overall stage of development according to international norms. Table of Contents 1. INTRODUCTION 2 2. THE IMPACT OF SERVICE SECTOR IN CHINA 2 3. DIFFERENCES AND GAPS 4 4. OBSTACLES AND RESTRICTIONS 6 5. RECOMMANDATIONS AND CONCLUSION 10 REFERENCES 12 1. INTRODUCTION The result of the market-oriented reforms in China along with its opening up to the outside world were rapid industrialization and integration in international trade. The service sector has perceived a fast, continued development and has made huge contributions to the overall economy in terms of its share of gross domestic product (GDP) and employment. The increasing of the service sector has caught up with the manufacturing sector, which indicates that China is moving into a new stage of development...
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...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 Qian, Y. (2003). “How Reform Worked in China” in D. Rodrik...
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...government and local governments in China has always been an important issue. Many people believe that the public administration of big countries has a confusing problem that in the formal system, how the policies made by senior policymakers can be implemented by adaptive agents of middle and basic levels (Lin & Liu, 2000). China has the largest population in the world, the authoritarian system and the implementation gap in the field of policy increase the complexity of the problem. Since the end of 1980s, political reform took place under the leadership of Deng Xiaoping and Zhao Ziyang, a relatively free political environment existed, thus a nationwide debate of neo-authoritarianism occurred among government officials and intellectuals (Landry, 2008). The collapse of the former Soviet Union made Chinese people again worry about the weakness of central power, the intellectual field even began to doubt the long-term vitality of communist countries. Therefore, after the Tiananmen Square protests calmed down, Central government of China tightened its control over all provinces through restructuring the cadre appointment system (Brødsgaard, 2002). In this paper, the author will analyze how has the Central government asserted its control over the local governments since the 1990s, and make a critical evaluation of its effectiveness. 2. Central government’s policies on local governments since the 1990s 2.1 First stage: 1990-1993 Since the opening and reform in 1978 till 1993, Central government...
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...of ambiguous 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...
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...and the institution-based view. According the paper, the institution-based view complement the other two more traditional views and represent a critical element in the definition of the firms’ international business strategy. Basically, MNE’s strategic choices are not only driven by industry conditions and firm capabilities, but are also a reflection of the formal and informal constraints of a particular institutional framework that managers confront (Peng, Wang & Jiang, 2008). The institutional-based view focuses on nation’s political, regulatory and social aspects and their impact on the business environment MNEs interact with. These aspects significantly shape the strategy and performance of the firms – both domestic and foreign – in developing countries, where typically the rules of the game are changing or not completely known (Peng, Wang & Jiang, 2008) To support the strategy tripod framework, the authors outline four different cases, grounded in the context of emerging economies: antidumping as entry barriers, competing in and out of India, growing the firm in China, and governing the corporation in emerging economies. Regarding antidumping as entry barriers, the example discussed is related to a steel producer who enters into a new geography (Texas) by applying a price dumping strategy. The point made by the authors is that depending on the nationality of steel producer – domestic or foreigner –, incumbent companies would react very differently. In fact, if the new...
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...The Hong Kong Polytechnic University MGT682 Independent Studies Corruption in China: Effects on Economic Development and Remedial Policies Thomas Wu 02715615G August 6, 2003 The Hong Kong Polytechnic University MGT 682 Independent Studies Corruption and Bribery in China Thomas Wu 02715615G August 6, 2003 Table of Content RESEARCH PROPOSAL TOPIC.........................................................................................................3 INTRODUCTION....................................................................................................................................3 OBJECTIVES AND HYPOT HESIS.......................................................................................................4 NATURE OF RESEARCH.....................................................................................................................5 RIVAL THEORIES.................................................................................................................................5 “GREASE-THE-WHEELS” THEORY .........................................................................................................5 MULTIPLE EQUILIBRIUMS ......................................................................................................................7 LOGIC MODEL......................................................................................................................................8 SIGNIFICANCE OF STUDY..............................
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...org/articles.php?doi=10.1257/jel.49.4.1076 The Fundamental Institutions of China’s Reforms and Development Chenggang Xu* China’s economic reforms have resulted in spectacular growth and poverty reduction. However, China’s institutions look ill-suited to achieve such a result, and they indeed suffer from serious shortcomings. To solve the “China puzzle,” this paper analyzes China’s institution—a regionally decentralized authoritarian system. The central government has control over personnel, whereas subnational governments run the bulk of the economy; and they initiate, negotiate, implement, divert, and resist reforms, policies, rules, and laws. China’s reform trajectories have been shaped by regional decentralization. Spectacular performance on the one hand and grave problems on the other hand are all determined by this governance structure. ( JEL O17, O18, O43, P21, P25, P26) 1. Introduction hinese economic reforms, which have been in flux for three decades, have more than doubled China’s economic growth, from an average of 4.4 percent annually before 1978 to an average of 9.5 percent after 1978. * University of Hong Kong and WCU–SNU. The first draft of this paper was written at Hong Kong University of Science and Technology (HKUST) when I was visiting there. The hospitality and generous support of HKUST are greatly appreciated. Comments from participants in conferences and seminars at the China Europe International Business School, University of Chicago, the Chinese University...
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...Business environment risks report in China 1. Introduction Over the past three decades a fundamental shift has been occurring in the world economy. We have been moving away from a world in which countries are isolated to each other to the integrated and independent system (Hill, C. W., Krishna, U., & Wee, C. H., 2014, p4). It is wildly acknowledged that Globalisation process has increased chance that foreign firms enter into a country to pursue the extension of their business. Within these emerging countries, no doubt that China is one of the perfect choices. As the second largest land area country with the most population, marketing in China is huge, especially when the economy innovation in 1978 and the country’s admission into the World Trade Organization (WTO) in 2011. (Walters, P. G., & Samiee, S., 2003). They are two milestones that changed the layout of business in China. It means trade barriers have been reduced and markets are more open to international firms. However, given the membership of WTO and cross-border investment also brings some challenge and risks. For example, lack of understanding about the host country’s culture, political system or business practices often lead to frustration and dismal business performance. (Hong, J. F., 2004) So, this report will analyse the business environment in China from four different aspects. Distinctively, they are political, economic, regulatory and cultural environment. Some data and figures will be cited to...
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...Reform and Opening in China: “Sequencing” or “Parallel Partial Changing” FAN Gang National Economic Research Institute China Reform Foundation Beijing, China November, 1999 Content I. Introduction: Lessons of Asia Financial Crisis for Reform and Opening ¾ Benefits from Globalization ¾ Constrains to the developing countries ¾ The “unequal footing” ¾ A common cause of Asian crises: “incompatible opening” ¾ The Lessons from Asia crisis: Speed up the reform and Balance the globalization and domestic restructuring ¾ Case of China: Gradual liberalization II. China: Opening process and benefits from the globalization II. 1 Trade. II. 2 Foreign Investment II. 3 Service sectors III. Potential negative impacts of further market liberalization III. 1. Unemployment in general III. 2 Agriculture III. 3 SOEs and Manufacture industries III. 4 Service sectors III. 5 Inter-region and inter-group income disparity IV. Impacts of Asia crisis and corresponding policies V. How to achieve further “Compatible opening” ¾ Will the quick market liberalization solve the problems? ¾ Reforms and opening ¾ “Compatible opening” vs. “sequencing” ¾ Timetable for opening? ¾ No universal solution China has quickly opened its economy in the past 20 years. It is became the largest FDI recipient developing country since 1993 and the trade is already equivalent...
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...Reform and Opening in China: “Sequencing” or “Parallel Partial Changing” FAN Gang National Economic Research Institute China Reform Foundation Beijing, China November, 1999 Content I. Introduction: Lessons of Asia Financial Crisis for Reform and Opening Benefits from Globalization Constrains to the developing countries The “unequal footing” A common cause of Asian crises: “incompatible opening” The Lessons from Asia crisis: Speed up the reform and Balance the globalization and domestic restructuring Case of China: Gradual liberalization II. China: Opening process and benefits from the globalization II. 1 Trade. II. 2 Foreign Investment II. 3 Service sectors III. Potential negative impacts of further market liberalization III. 1. Unemployment in general III. 2 Agriculture III. 3 SOEs and Manufacture industries III. 4 Service sectors III. 5 Inter-region and inter-group income disparity IV. Impacts of Asia crisis and corresponding policies V. How to achieve further “Compatible opening” Will the quick market liberalization solve the problems? Reforms and opening “Compatible opening” vs. “sequencing” Timetable for opening? No universal solution China has quickly opened its economy in the past 20 years. It is became the largest FDI recipient developing country since 1993 and the trade is already equivalent...
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...to the economy, promote growth and promote sustainable growth and competitiveness, tackle unemployment and social consequence, and modernize public administration. However, the dilemma here is to balance fiscal spending while to invest more to R&D and labor market. Meanwhile, it’s difficult for EU to launch fiscal and financial reforms as a whole as problems confronting different countries are quite different. In many studies into EU 2020, great importance is attached to institutional consolidation and country-to-country differentiations while not as much to the role of foreign policies despite increasing presence of other countries in EU. China, as the second biggest trading partner of EU, has actively engaged in various corporations both with EU as a whole and with individual countries. China’s direct investment to EU reached 20 billion euro in 2011 covering all EU members. It will continue to increase as the Chinese authority is now revising its outbound investment law to encourage companies to go overseas and EU has always been an attractive market for Chinese investors. Protectionism risks the chance to utilize investment from China as a supplement to insufficient market confidence and fiscal scrutiny. Laissez-faire seems to allow mass media to demonize Chinese investment and thus aggravate public panics. Therefore, policy incentives should be provided to guide Chinese investment to...
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...globally integrated to have a major impact on the world economy. Three political entities currently qualify: the United States, the European Union, and China. Inducing China to become a responsible pillar of the global economic system (as the other two are) will be one of the great challenges of coming decades—particularly since at the moment China seems uninterested in playing such a role. China has a profound interest in seeing that the international rules and institutions function effectively. The United States remains the world's largest national economy, the issuer of its key currency and in most years the leading source and recipient of foreign investment. The European Union now has an even larger economy and even greater trade flows with the outside world, and the euro increasingly competes with the dollar as a global currency. China, the newest member of the club, is smaller than the other two but is growing more quickly and is more deeply integrated into the global economy. Its dramatic expansion is therefore having a powerful effect on the rest of the world. (China is often paired with India in such discussions, but India's GDP is less than half of China's. The value of the annual growth of China's trade exceeds the total annual value of India's trade. China will dominate its Asian neighbor for the foreseeable future.) China poses a unique challenge because it is still poor, significantly nonmarket zed, and authoritarian. All three characteristics reduce the likelihood...
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...National University of Singapore Lee Kuan Yew School of Public Policy PP5145 Political Economy of Reform Special Term 2014 – 2015 (as at 8 April 2015) (Tentative) Instructor: Office: Phone: Email: Website: YEE, (Henry) Wai-Hang, Ph.D. Li Ka Shing Building 02-03 6516 5832 sppywh@nus.edu.sg http://www.spp.nus.edu.sg/Faculty_Yee_Wai_Hang.aspx Class Hours: Office Hours: Monday 14:00 – 17:00; Thursday 14:00 – 17:00 By appointment Course Description Public managers need to master the skills of not only managing organizations but also managing projects, programs, and particularly larger-scale policy reforms. Good understanding of the political economy embedded in policy and administrative reforms are thus essential. This course examines the political-economic dynamics embedded in the reform process from an institutional perspective. It is a master–level course designed for practitioners in the field of public administration and public policy. It discusses strategies for achieving and enhancing reform outcomes. Theories and practices proposed by academics and practitioners will be drawn on as learning resources for the class. Class Format To achieve a high level of synergy and make the most out of our classroom meetings, I expect students to learn from both the instructor and one another in the class. Each of our class will be divided into 2 parts. In the first part, I will begin by giving a general introduction of the assigned readings. Then...
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