CHINA: THE NEXT TWENTY YEARS OF REFORM AND DEVELOPMENT

Transcription

1 CHINA: THE NEXT TWENTY YEARS OF REFORM AND DEVELOPMENT

2 Other titles in the China Update Book Series include: 1999 China: Twenty Years of Economic Reform 2002 China: WTO Entry and World Recession 2003 China: New Engine of World Growth 2004 China: Is Rapid Growth Sustainable? 2005 The China Boom and its Discontents 2006 China: The Turning Point in China s Economic Development 2007 China: Linking Markets for Growth 2008 China s Dilemma: Economic Growth, the Environment and Climate Change 2009 China s New Place in a World of Crisis

3 CHINA: THE NEXT TWENTY YEARS OF REFORM AND DEVELOPMENT Ross Garnaut, Jane Golley and Ligang Song (eds) THE AUSTRALIAN NATIONAL UNIVERSITY E P R E S S SOCIAL SCIENCES ACADEMIC PRESS(CHINA)

4 E P R E S S Published by ANU E Press The Australian National University Canberra ACT 0200, Australia anuepress@anu.edu.au This title is also available online at: C h i n a B o o k International Co-published with Social Sciences Academic Press (China) under the China Book International scheme. This scheme supports co-publication of works with international publishers. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying or otherwise, without the prior permission of the publisher. Cover design by Teresa Prowse, Made by Fruitcup Cover photograph: Nikada. istockphoto, File Number: Printed by Griffin Press This edition 2010 ANU E Press

5 Contents Abbreviations xiii Contributors xvii Acknowledgments xxi 1. Chinese economic reform and development: achievements,.... emerging challenges and unfinished tasks Jane Golley and Ligang Song Part I Long Term Development: Trends and Issues 2. The turning period in China s economic development: a conceptual framework and new empirical evidence Ross Garnaut 3. China model and its future Yang Yao 4. How will China s central local governmental relationships evolve? An analytical framework and its implications Yongsheng Zhang 5. China s metal intensity in comparative perspective Huw McKay, Yu Sheng and Ligang Song 6. Assessing China s energy conservation and carbon intensity: how will the future differ from the past? ZhongXiang Zhang 7. Prospects for diminishing regional disparities Jane Golley Part II: Global Integration: Challenges and Opportunities 8. Exchange rate policy and macroeconomic adjustment Geng Xiao 9. The real exchange rate and the renminbi Rod Tyers and Ying Zhang v

6 China: The Next Twenty Years of Reform and Development 10. China and East Asian trade: the decoupling fallacy, crisis and policy challenges Prema-chandra Athukorala and Archanun Kohpaiboon 11. Asian foreign direct investment and the China effect Chunlai Chen 12. The global financial crisis and rural urban migration Sherry Tao Kong, Xin Meng and Dandan Zhang Part III: Policy and Reform: Unfinished Business 13. Avoiding economic crashes on China s road to prosperity Wing Thye Woo 14. Rebalancing China s economic structure Yiping Huang and Bijun Wang 15. Urbanisation with Chinese characteristics Cai Fang and Meiyan Wang 16. Indigenous innovation for sustainable growth Yanrui Wu 17. China s health system and the next 20 years of reform Ryan Manuel Index vi

7 Tables 4.1 Different structures of intergovernmental relationships Share of central and local governments in government revenue and expenditure (per cent) Major results from simultaneous equation estimation, China s economy and steel demand per capita, UN projection of China s future development path Consumption tax rates for cars in China (per cent) Vehicle emission standards and the time to enter into force in China, ASEAN and the European Union Preliminary and final values for total primary energy consumption and coal consumption in China, Reduction in China s energy intensity: preliminary value versus final value (per cent) Differentiated tariffs for eight energy-guzzling industries in China (RMB/kW.h) Regional snapshot, Per capita GDP levels and growth rates Industry-wide NRCs and growth rates of industrial output, Regional NRCs and location components by sector, Regional shares of industrial output, 2007 (per cent) Shift-share analysis of provincial industrial growth Contributions to China s real exchange rate change (per cent) The balance sheet of the People s Bank of China, ca Estimates of the foreign share of total assets, selected countries Country rankings on foreign shares of total assets Composition of manufacturing exports, (per cent) Share of parts and components in manufacturing trade, and (per cent) vii

8 China: The Next Twenty Years of Reform and Development 10.3 Share of parts and components in bilateral trade flows, (per cent) China s trade with the rest of East Asia (per cent) East Asia China manufacturing trade Intra-regional shares of manufacturing trade: total parts and components and final trade, and (per cent) East Asia: growth of total merchandise exports and imports, 2007Q1 2009Q3 (year-on-year percentage change) China: growth of total merchandise exports & imports by trading partner countries, 2007Q1 2009Q year-on-year percentage change, current US$) China: growth of merchandise exports and imports by commodity category, 2008Q1 2009Q3 year-on-year percentage change, current US$ Regression results of the effects of FDI flows into China on FDI inflows into East, South and South-East Asian developing economies, , fixed-effects China s imports of raw materials from Asian economies (US$ million) Two-way trade between China and Asian economies in electric and electronic equipment industries (HS 85) A1 Appendix. Variable list of the impact of FDI inflows into China on FDI inflows into other Asian developing host economies Summary statistics for migrant and rural samples Employment and earnings of migrants in cities (migrant sample) Results from the hours and hourly earnings equations for migrants in cities (migrant sample) Return migration, employment and earnings for rural labour force (rural sample) Migration and off-farm status for a panel of individuals (rural sample) Results from hours and hourly earnings equations for rural off-farm work (rural sample) Per capita income comparisons across different type of households A1 Appendix. Migrant survey timing distribution by survey year viii

9 Tables (migrant sample) (per cent) A2 Appendix. Occupational distribution of self-employed migrants by year (migrant sample) Estimated cost distortions in China, (per cent of GDP) Numbers and growth rates of migrant workers and the urban employed Adjustments of urban minimum wages (numbers, per cent) Duration of migrating work and mobility of migrant workers (numbers, per cent) China s regional research and development statistics Econometric estimation results World s top five research and development spenders High-technology sector exports in selected economies High-technology sector research and development intensity in selected economies, 2006 (per cent) ix

10

11 Figures 5.1 Competing theories of metal intensity Crude steel output per capita of selected economies, Crude steel output and GDP, scaled by population, Urbanisation ratios of selected economies, Projection of steel demand per capita, extrapolating current trends China s consumption of crude steel, (million tonnes) Energy use per unit of GDP in China, (tonnes of coal equivalent per US$1000 in 1980 prices) Comparison of fuel economy standards for vehicles Cumulative installed wind power capacity by country, Map of China Regional shares of GVIO (per cent) Chinese sectoral price indices, The Mainland China US real exchange rate on GDP prices The Mainland China US real exchange rate on producer prices China s investment saving and external balances (percentage of GDP) Real wage growth in agriculture Dynamics of the PBOC s balance sheet: assets and liabilities as a percentage of GDP Growth of merchandise trade: East Asia, developing East Asia, China and ASEAN, January 2008 November 2009 (year-on-year, per cent) FDI inflows into China (at current prices) Age distribution of the sample from the migrant and rural surveys Wage/salary workers log weekly hours worked by industry a Wage/salary earners log hourly earnings by industry (total sample) b Wage/salary earners log hourly earnings by industry (panel sample) Comparison of the investment rate and consumption rate between China and the Chenery Standard, xi

12 China: The Next Twenty Years of Reform and Development 14.2 China s current account balances, (per cent of GDP) China s saving and investment rate, (per cent of GDP) Gini coefficient among households and the urban rural income gap Proportion of residential, firms and government income in primary distribution and the urban rural income gap China s annual increased loan, Estimated cost distortion and structural imbalances Changes in the ratio of physical to labour inputs in Chinese agriculture Quantitative relationship between agricultural and non-agricultural employment Usual urban population versus non-agricultural hukou population China s research and development intensity and personnel, Numbers of patents applied for and accepted, China s research and development intensity and performance, China s research and development expenditure shares and sources of funds, Research and development intensity and per capita GDP of major economies, Research and development spending shares (basic and applied research) in selected economies High-technology sector value added (in 1995 constant prices) Levels of healthcare provision in pre-1978 rural China Public spending in the post-collectivisation period, People declining hospitalisation in the post-collectivisation period, Sources of healthcare spending in the post-collectivisation period, Changes in tax revenues versus expenditures, (per cent) Urban and rural health profession skills and ratios xii

13 Abbreviations ACFTA ADB ASEAN BMCDR BMI BPCB BSH CAFE CAM CCP CDR CHIBOR CIC CIS CMS CNY COMTRADE CPI DPD EC EI EIA EU EW FAO FDA FDI FTA G20 G4 GATT GDP ASEAN China Free Trade Area Asian Development Bank Association of South-East Asian Nations Beijing Municipal Commission of Development and Reform Basic Medical Insurance bare-printed circuit boards Balassa Samuelson hypothesis corporate average fuel economy centrally administered municipality Chinese Communist Party country credit rating China inter-bank offered rate China Investment Company Commonwealth of Independent States Cooperative Medical Scheme yuan Commodity Trade Statistics Database consumer price index Development and Planning Division European Commission engineering index Energy Information Administration European Union efficiency wage Food and Agriculture Organization Food and Drug Administration foreign direct investment free-trade agreement Group of 20 nations Group of Four nations General Agreement on Tariffs and Trade gross domestic product xiii

14 China: The Next Twenty Years of Reform and Development GFC GR GtCO2 GW ICT IEA ILO IMF IPCC IPR ISSS ISTP IU KCS kw.h LMEs MFN MNE MOF MoHRSS MST mtce MW NAFTA NBER NBS NCMS NDRC NEA NHS NIEs NPL NRC OECD OLS PBOC PCBA global financial crisis growth rate gigatonnes of carbon dioxide gigawatts information and communication technology International Energy Agency International Labour Organization International Monetary Fund Intergovernmental Panel on Climate Change intellectual property rights Institute of Social Science Survey index to scientific and technical proceedings intensity of use Kuznets curve for steel kilowatt hour large and medium enterprises most-favoured nation multinational enterprise Ministry of Finance Ministry of Human Resources and Social Security Ministry of Science and Technology million tonnes of coal equivalent megawatts North American Free Trade Agreement National Bureau of Economic Research National Bureau of Statistics New Cooperative Medical Scheme National Development and Reform Commission National Energy Administration National Health Service (Britain) newly industrialised economies non-performing loan net relative change Organisation for Economic Cooperation and Development ordinary least squares People s Bank of China printed circuit-board assembly xiv

15 Abbreviations PPP PRC RMB ROO RUMiCI SAEP SASAC SC SCB SCE SCI SEZ SHI SIC SITC SOE SUR SUV tce TFP THC TSS TVE TW.h UN UNCTAD UNDP USC VAT WFDIOUT WRDP WTO purchasing power parity People s Republic of China renminbi rules-of-origin Rural-Urban Migration in China and Indonesia Project State Agency for Environmental Protection State-Owned Assets Supervision and Administration Commission supercritical power plant state-controlled bank state-controlled enterprise science citation index special economic zone social health insurance Standard Industry Classification Standard International Trade Classification state-owned enterprise seemingly unrelated regression technique sports utility vehicle tonnes of coal equivalent total factor productivity township health centre Tax Sharing System township and village enterprise terawatt hours United Nations United Nations Conference on Trade and Development United Nations Development Programme ultra-supercritical power plant value-added tax world total foreign direct investment outflows Western Regional Development Program World Trade Organisation xv

16

17 Contributors Prema-chandra Athukorala Arndt-Corden Division of Economics, Research School of Pacific and Asian Studies, The Australian National University, Canberra. Chunlai Chen Crawford School of Economics and Government, The Australian National University, Canberra. Cai Fang Division of Labour and Human Capital, Institute of Population and Labour Economics, Chinese Academy of Social Sciences, Beijing. Ross Garnaut University of Melbourne, Melbourne and The Australian National University, Canberra. Jane Golley China Economy Program, Crawford School of Economics and Government, The Australian National University, Canberra. Yiping Huang China Centre for Economic Research, Peking University, Beijing and China Economy Program, Crawford School of Economics and Government, The Australian National University, Canberra. Archanun Kohpaiboon Thammasat University, Bangkok. Sherry Kong Research School of Economics, College of Business and Economics, The Australian National University, Canberra. xvii

18 China: The Next Twenty Years of Reform and Development Ryan Manuel University of Oxford, Oxford. Huw McKay Westpac Bank, Sydney. Xin Meng Research School of Economics, College of Business and Economics, The Australian National University, Canberra. Yu Sheng Australian Bureau of Agriculture and Resource Economics (ABARE), Canberra. Ligang Song China Economy Program, Crawford School of Economics and Government, The Australian National University, Canberra. Rod Tyers Business School, University of Western Australia, Perth. Bijun Wang China Centre for Economic Research, Peking University, Beijing. Meiyan Wang Division of Labour and Human Capital, Institute of Population and Labour Economics, Chinese Academy of Social Sciences, Beijing. Yanrui Wu Business School, University of Western Australia, Perth. Wing Thye Woo Brookings Institution, Washington DC; University of California (Davis); Central University of Finance and Economics, Beijing. Geng Xiao Brookings-Tsinghua Centre for Public Policy, Tsinghua University, Beijing and Brookings Institution, Washington DC. xviii

19 Contributors Yang Yao China Centre for Economic Research, Peking University, Beijing. Dandan Zhang Research School of Economics, College of Business and Economics, The Australian National University, Canberra. Ying Zhang Business School, University of Western Australia, Perth. Yongsheng Zhang Development Research Centre of the State Council, Beijing. ZhongXiang Zhang East-West Center, Honolulu. xix

20

21 Acknowledgments The China Economy Program gratefully acknowledges the financial support for the China Update 2010 from The Australian Agency for International Development (AusAID) and the assistance provided by Rio Tinto through the Rio Tinto - ANU China Partnership. xxi

22