...Journal of Economic Literature 2011, 49:4, 1076–1151 http:www.aeaweb.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...
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...industrialization explain the key institutional and organizational characteristics of national business systems, and do they have any bearing on long-term national competitiveness? Introduction The concept of industrialization has been used among different nations and regions, while many countries have carried out their own industrialization progress during the past several decades, which stimulates the development of organizations and better corporate performance. There are different kinds of national business systems with their distinctive characteristics varying among countries. Then ‘early’ and ‘late’ industrialization is applied to describe two main types of national businesses that existing in developed and developing countries, which explains the key institutional and organizational differences among countries in particular to some extend. Each country has fallowed different pathway and carried out their industrialization in different period. It is known that the UK is the first country that achieved early industrialization revolution, which was followed by the US. And then in the late twentieth century, Germany, Japan and China implemented their industrialization process with dramatic change on their economic performance. The purpose of this essay is to use the conception of ‘early’ and ‘late’ industrialization to explain the key institutional and organizational characteristics of national business systems by comparative perspective. First of all, the theories of industrialization...
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...and interpretation of a nation’s economic, social and political environment. The analysis offers a comprehensive overview of a country Objectives To identify the common factors used by MNCs to measure a country’s political risk and financial risk; To explain the techniques used to measure country risk; and To explain how MNCs use the assessment of country risk when making financial decisions Country analysis is useful for: * Investors in the financial market * Companies intending to set up a subsidiary * Companies wishing to enter a new market * People wishing to reside in the country Factors Considered in a Country Analysis A country analysis is often conducted through country reports researched by professional government or independent firms, such as the Economist Intelligence Unit, World Bank and Organization for Economic Cooperation and Development (OECD). Some of the data points considered in a country analysis are: Economic Indicators: Indicators such as gross domestic product (GDP), consumer price index (CPI), inflation rate and producer price index (PPI) help in gauging a country’s economic health. High GDP growth, low inflation and high CPI are favorable for companies and investors. These indicators also reflect job availability and standard of living in the country. Government Policy: Governments often introduce policies and programs to promote the growth of certain industries. Favorable government policies (such as subsidies and tax rebates)...
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...Ordos, Inner Mongolia in China, Kangbashi district is filled with skyscrapers, government buildings, museums and theatres. Kangbashi looks just like another rising urban center of prosperity, except that there is hardly anyone living there even though it was originally designed to house and entertain one million people. It has been infamous for being the largest ‘ghost city’ in China and unfortunately, it is not the only one. China’s economy has been growing rapidly over the past decades and so is realty business, but problems follow. As a result of a real estate bubble, ‘ghost cities’ sprang up all over the country. The media portrays the deserted plazas and dead stillness in daytime as the excessive Chinese infrastructure investment, and although the media shows cause great concerns, the Chinese government rarely has open discussions on this problem. In my point of view, ‘Ghost Cities’ in China is an important issue since it affects the urbanization, utilization of resources, lives of Chinese citizens and ultimately the development of the entire country. In this paper, I will use Ordos as a typical case study in order to look into some of the contributing factors to this issue such as politics, the economy, social structure and traditional culture, and I will present further thoughts in a broader context. First, I will try to answer the following questions: What are the causes of ghost cities? What are the policies in response? How did the policies work? What problems have...
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...Introduction 03LO1 Understand the organisational purposes of businesses 1.1 Purposes of the Cadbury Schweppes: 031.2 How Cadbury Schweppes meets its Stakeholders objectives 041.3 Responsibilities and strategies by Cadbury Schweppes 05LO2 Understand the nature of the national environment in which businesses operate2.1 Resources allocation is different economic system 05 2.2 Impact of fiscal and monetary policy on business to allocate its resources 06 2.3 How the competition policy and other regulatory mechanisms impacted on Cadbury Schweppes 07LO3 Understand the behaviour of organisations in their market environment3.1 Market structures in determining the pricing and output decisions 083.2 Market forces shape organizational responses 093.3 Business and cultural environment change the shape of an organization 10LO4 Be able to assess the significance of the global factors that shape nationalbusiness activities4.1 Significance of international trade to United Kingdom business organizations 114.2 Impacts of global factors on UK business organizations sectors 114.3 Impact of policies of the European Union on UK business 12------------------------------------------------- Merit Description------------------------------------------------- M1. Identify and apply strategies to find appropriate solutions. ...20------------------------------------------------- ...
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...Chapter 1: The business systems of Asia Variety in the regional and general features Civilizational traditions • Confucianism • Taoism • Buddhism • Islam • Catholicism Historical external influences • Colonies • India establishing trading connections, mostly in South East Asia • Chinese who left China and settled as business people in the countries around the rim of the South China sea Periods: 1. 1945-1975 After the retreat of colonial powers, countries needed to reestablish their identity and political structures → hostility + Maoist experiments in China 2. 1975-1997 Relative calm period, stable growth, export to foreign countries, rise in FDI a. Mao’s death: collapse of communism → socialist market economy b. Japanese miracle c. Impressive growth of the South-Korean economy 3. Ersatz capitalism → Asian crisis in 1997: inefficient use of capital was covered up by the availability of easy money from governments, optimistic foreign investors lured by the emerging markets. The system could not keep up the pretence as it became sensitive to a downturn in the economic cycle which hit the region in 1997. → End of easy money and beginnings of reforms. 4. After 1997, reforms: • Improvements to accountability and disclosure in the financing of industry • Reduction of favoritism and corruption during control of licenses and capital • Opening of markets to foreign competition • Adoption of international standards in accounting, trading, IPR • General rise...
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...framework. Political Economic Socio-cultural Technological Environmental Legal THE POLITICAL ENVIRONMENT Government is responsible for providing a stable framework for economic activity and, in particular, for maintaining and improving the physical, social and market infrastructure. Public policy on competition and consumer protection is particularly relevant to business strategy. GOVERNMENT POLICY Government policy affects the whole economy, and governments are responsible for enforcing and creating a stable framework in which business can be done. A report by the World Bank indicated that the quality of government policy is important in providing three things: Physical infrastructure (e.g. transport) Social infrastructure (education, a welfare safety net, law enforcement, equal opportunities). Market infrastructure (enforceable contracts, policing corruption). PUBLIC POLICY ON COMPETITION In a perfect monopoly, there is only one firm that is the sole producer of a good that has no closely competing substitutes, so that the firm controls the supply of the good to the market. The definition of a monopoly in practice is wider than this, because governments seeking to control the growth of monopoly firms will probably choose to regard any firm that acquires a major share of the market as a potential monopolist. Monopoly generally exploits customers, but it may have both economic disadvantages and economic advantages. a) A beneficial monopoly achieves economies of scale in an industry...
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...option or the third option to invest in but rather Philippines lies in the near lower end of the list. This Study seeks to know the factors that affect this decline in investment in the Philippines and the effects of these factors to local investors and entrepreneurs. According to Global Competitiveness Report 2011-2012, the most factor for doing business are corruption, inefficient government bureaucracy, inadequate supply of infrastructure, policy instability, tax rates, crime and theft, tax regulations, restrictive labor regulations, inadequately educated workforce, access to financing, inflation, government stability/coups, poor work ethics in national labor force, foreign currency regulations and poor public health. Also, poor infrastructures, higher costs among other countries are one of the factors affecting foreign investment. The investment decision factors where the investors base their decisions are Macroeconomic, political, export market, openness, incentives, transparency, legal system, law and order, cheap labor, skilled labor, access to land, communications, transport, utilities and quality of life. The factors that hinders foreign investment and public investment in the Philippines are the main issues to be studied in this research BACKGROUND OF THE STUDY The GDP, a measure of the country’s economic health, is the value of goods produced and services rendered in a given period. According to the Philippine inquirer report on August 2012...
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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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...competitiveness (Grant, 1991; Gray, 1991). However, in order to understand why so much emphasis is placed on the diamond framework in the management literature, this essay will discuss Porter’s concept of the Diamond and the factors that contribute to the development of national competitive advantage. This paper will begin with a theoretical approach followed by the reception of different authors and schools of thoughts who disagreed with his management thinking, and then goes on to consider empirical issues which have arisen subsequently, followed by a conclusion.” Theoretical Discussions (explain the 'main theory' [such as 'Late/Early industrialization', 'Managerial enterprise', 'Weber's theory about impacts of culture'] in this question) - “Porter’s theory of national competitive advantage is based upon a study of the characteristics of the national environment which identifies four sets of variables, and an additional two, which influences a company’s ability to establish and maintain competitive advantage within international markets. These interacting determinants are: factor conditions; demand conditions; related and supporting industries; and firm strategy, structure and rivalry and form what Porter refers to as the “national diamond.” The four main determinants can also be understood as the availability of resources to various industries, the information used in deciding which opportunities to pursue for the company, the goals of individuals in companies, and the innovation and...
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...Task 1 Creating a Family Business My family and I have decided to open a tea shop in Yangon. However, saying it is easy but making it happens is hard. Creating a business in the real business world is not as simple as people have thought. There are a lot of factors that need to be put into consideration. Financial standpoint, location, same business competitors, consumers, market demand and also, organizational structure of the organization that wanted to be set up should be carefully considered, researched and set goals to realize it as an organization. An organization should be looking the same goal and mission. Only then, a business would stand out among the competitors and be at the top of the market. Thus, in this paper, the plans and the factors that should be considered to open a family business will be presented in terms of organizational structure, stake holding personnel and policies of the country to operate the business. Organizational Goal, Values, Vision and Mission For the family business to be able to survive and sustain itself in the market, we need to set goals and missions for the organization to realize and carry it out. It is important that every person in the organization is working towards the same goal to be able to succeed as an organization. Without a goal, the organization will not be able to thrive forward. The employee within the organization will not be sure what to do. They might be heading in different directions and goals. Then, the organization...
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...to meet them 5 Task 2. The nature of the national environment in which your chosen business operates 6 2.1. Explain how economic systems attempt to allocate resources effectively 6 2.2. Assess the impact of fiscal and monetary policy on business organisations and their activities 7 2.3. Evaluate the impact of competition policy and other regulatory mechanism on the activities of a selected organisation 7 Task 3. The behaviour of your chosen organisation in its market environment 8 3.1. Explain how market structures determine the pricing and output decisions of the business 8 3.2. Illustrate the way in which market forces shape organisational responses using a range of examples 8 3.3. Judge how the business and cultural environments shape the behaviour of a selected organisation 9 Task 4. The significance of the global factors that shape business activities of your chosen organisation 10 4.1. Discuss the significance of international trade for your organisation 10 4.2. Analysis the impact of global factors on your chosen organisation 10 4.3. Evaluate the impact of European Union policies on your business organisation 11 Part B 12 Task 5. Report 12 a). how the downturn in the UK economy since 2008 and the double dip recession has impacted on your chosen organisation 12 b). how should your chosen organisation respond to these changes 12 Part C 14 Task 6 14 a.i. Potential impact of fiscal changes 14 a.ii Monetary policy 14 a.iii. International environment 14 b...
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...foreign direct investment via sole ownership, the advantages and disadvantages of the countries should be considered. For example, China is a developing country, and during the past 30 years, China’s rapid economic development shows that China has a strong power in developing economic. In recent decades, China stays on one of the leading positions in direct investment and therefore a lot of investments to this country are considered to be profitable for any company or investor. The reasons are simple: the growth of the economy and a large number of different projects. Foreign direct investment in China, due to stable growth potential of the economy and a huge production resources, aimed at both the external and the internal market.The innovative ability is a great attraction for investment managers around the world. In contrast, a lot of foreign investors had chosen China for investment and this resulted in a very big competition. Nevertheless, USA is a successfully developed country. And its economy is the top one in the world. As the most important country in the first world countries, the USA has many good experiences in global business. The most strong enterprises were set in the USA and it means that the competition in the USA is very huge. This competition affects many areas, not only the market place but also the labour market and the use of resources. All of these causes higher costs and reduces the profits.Also, American “antitrust law” regulates that a company with...
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... domination China, Asia US domination is gone, different countries dominate the world The demographics of the world economy has changed How do you measure globalization? * University of zurich * http://globalization.kof.ethz.ch/ The KOF Index of Globalization measures the three main dimensions of globalization: 1. Economic globalization * Actual flows (37%) * Trade (percentage of GDP) * Foreign direct investement, flows (percentage of GDP) * Portfolio investement (percentage of GDP) * Income payments of foreign nationals (percentage of GDP) * Restrictions * Hidden import barriers * Mean tariff rate * Taxes on international trade (percentage of current revenue) 2. Social (39%) * Data on personal contact * Data on information flows 3. political. (25%) * Embassieses 3. Types of globalization 1. Globalization of products 2. Globalization of markets Active vs passive globalization Globalization can also be passive. Companies that do not want to globalize could also be affected by globalization. Companies might lose everything if they do not globalize 4. What are the drivers of globalization * Technological: Telecom, transport,… * Barriers to trade have reduced: The decline of barriers for the free flow of goods Doha Round 5. Positive and negative Positive * Globalization stimulates economic growth raises...
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...Faculty of Management University of Lethbridge LETHBRIDGE, ALBERTA, CANADA © Di Wu, 2006 (Approval/ Signature page) ii Abstract This paper incorporates Porter’s diamond model to analyze China’s automobile industry. Besides looking at the four determinants of competitiveness in the original model, this study specifically examines the impact of government on industry competitiveness. This study retrieves archival data on multi-measurements used in prior studies. The author incorporates one case study of a Chinese auto firm to illustrate the specific impact of government policy and the responses of auto assemblers and component suppliers. Interviews with experts in auto-related industries are conducted to triangulate the findings. Results show that the Chinese auto industry is still in its early stages of development, whereas product quality and economies of scale of domestic automakers are approaching global standards; thus Chinese auto firms aim at becoming major players in the international market. The government plays an active role in assisting the industry development as the nation transitions from a planned economy to a free market. iii Acknowledgements There are many people that have offered me extraordinary support. I would like to thank the members of my supervision committee for the support, enthusiasm, and freedom to pursue an avenue close to my heart. I would like to thank my supervisor Dr. Bradley Olson for his wisdom and guidance in this project. He...
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