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Using a panel data set from 2007 to 2019, we empirically evaluate the impact of carbon capture, utilization, and storage (CCUS) technology innovation on green total factor productivity (GTFP). The findings show that (1) CCUS technology innovation significantly improves GTFP. (2) CCUS technology innovation significantly contributes to GTFP by promoting industrial structure upgrading and carbon emissions efficiency. (3) Environmental regulation plays a positive moderating role in the nexus between CCUS technology innovation and GTFP. The findings of this paper provide guidance for China to achieve green energy transition and build a green energy system. [ABSTRACT FROM AUTHOR]

Based on highly disaggregated customs data from 2016–19, this paper investigates the impact of the China–U.S. trade war on the exports of Chinese firms, from the perspective of the extensive margin of product scope. The paper finds that the rise in U.S. import tariffs during the trade war led to Chinese exporters concentrating on production of their core products and shrinking their export scope. Higher import tariffs resulted in an average 2.43 percent decline in export scope and an average 1.25 percent increase in the export share of core products. The damage was particularly pronounced for intermediate products and heterogeneous products, which is consistent with the high duties. The paper provides direct evidence on the harm to export diversification caused by the China–U.S. trade war, suggesting a welfare loss from the decrease in product variety, as emphasized in the literature. This result holds after controlling for factors such as production cycles and heterogeneity. [ABSTRACT FROM AUTHOR]

B Sherry Tao Kong, Peking University: b The present paper investigates one of the most studied questions in labor economics, namely, the labor market impact of immigrants. The paper defines immigrants vis-à-vis locals based on an individual's I hukou i status. As such, "immigrants" are probably better termed as "internal migrants", which also avoids the confusion with the related but conceptually different literature looking at the impact of international migrants on the domestic population. [Extracted from the article]

The following comments will focus on a few questions: B Question 1: How trustworthy are the data provided by the paper and other official government sources on the epidemic situation in China? B Wang Xiaolu, National Economic Research Institute: b This paper convincingly presents data to describe in detail the outbreak of COVID-19 in China in the first half of 2020, outlines the response measures taken by the government and the private sector, evaluates the effects of these measures, and explains how China quickly controlled the epidemic and achieved both economic and social recovery. [Extracted from the article]

B Liming Wang, University College Dublin: b The paper presents a comprehensive overview of China's experience of fighting the COVID-19 pandemic in 2020. International view of the handling of the COVID-19 pandemic Outside of China, we have unfortunately witnessed increased criticism of China, and attacks by western politicians, led by the U.S. government. [Extracted from the article]

This paper focuses on policies to promote the greater use of regional currencies in intra-regional trade and investment. This will reduce the dominance of the U.S. dollar and lessen the region's exposure to U.S. monetary conditions and monetary policy.A key focus in this paper is on policies to help set up efficient currency exchange markets to reduce currency exchange transaction costs. This is fundamental, as high currency exchange spreads between local currencies discourage local currency usage for trade and investment. China's policy to internationalize the RMB and set up offshore direct foreign exchange markets between the RMB and other currencies is also highlighted. Other important issues include the Local Currency Settlement Framework, the Asian Bond Market Initiative, and Asian Bond Funds. [ABSTRACT FROM AUTHOR]

B Suresh Narayanan, Universiti Sains Malaysia: b The paper is aptly titled; after reading it I did gain a better understanding of the U.S.-China trade war. The paper begins by giving a stylized version of four lobby groups and argues that the trade war began in 2018 when the U.S. merchandise trade deficit was under 4 percent of GDP, rather than in 2006, when the U.S. merchandise trade deficit was over 6 percent and because the majority coalition on China trade in 2006 was no longer the majority coalition in 2018. The paper also makes it clear that China was not a "victim" in the trade war and may have invited it upon itself by highlighting two instances: non-compliance with WTO regulations and China's technology policy. [Extracted from the article]

The COVID-19 pandemic has swept across China and the world, causing more than 30 million infections and incalculable damage. China was seriously damaged and threatened by the disease in the first quarter of 2020, but finally succeeded in halting its spread in a short period. This was achieved through quick and strong measures in self-protection, mobility control, resource allocation, professional health care, and disinfection, under the organization of the government and the cooperation of all the Chinese people. The measures that were taken to prevent the spread of COVID-19 proved to be efficient in fighting the outbreak in Beijing in June 2020. This paper reviews China's experience with COVID-19, the Chinese economy's performance during the pandemic, and the government's policies to protect lives, maintain markets, and promote the economy. The data show that strong monetary and fiscal policies accelerated the country's economic recovery. These policies, including tax reductions and credit support, targeting small- and medium-size enterprises (SMEs) and industries and regions that were severely damaged, have helped to create jobs and encourage production and investment. [ABSTRACT FROM AUTHOR]

World trade has become increasingly regionalized in the past decade as a result of preferential arrangements. Due to Taiwan's unique international political status, its present government believes that closer economic integration with China would enhance Taiwan's economic prosperity and prevent Taiwan from being marginalized in East Asia. Taiwan hence signed the Economic Cooperation Framework Agreement (ECFA) with China in 2010. This paper summarizes arguments opposed to the ECFA from economic and political perspectives. Despite the fact that Taiwan is expected to reap greater benefits from deeper integration with China, simulation analyses show that the welfare-enhancing effect brought about by the ECFA is quite limited, because the ECFA contains no definite content or timeline other than an early harvest list. [ABSTRACT FROM AUTHOR]

This paper offers a comprehensive review and careful assessment of China's mobile payment business. With broad access, low costs, and reliable transactions, mobile payments are creating a revolution of financial inclusion, changing people's daily lives and commercial business models. This study also confirms that mobile payment improves risk sharing among individuals and increases entrepreneurial opportunities. These mobile payment successes can be traced to three key factors: supply shortages of alternative payment services, a friendly regulatory environment, and recent technological developments. A number of outstanding issues remain, however, including data ownership, data inequality, and regulatory shortcomings. [ABSTRACT FROM AUTHOR]

International collaboration is considered to exert a positive effect on research performance. However, the impact of international collaboration on the performance of research institutions is under-documented. This paper fills the void in the literature by utilizing InCites data of 1,067 Chinese research organizations. The main results show that international collaboration promotes the performance of research organizations in general, but the effect varies according to the types of institutions. The organizations in less-developed regions are more affected by international collaborations than those in developed regions. The empirical results also demonstrate that the United States is the most important scientific collaborator of China. [ABSTRACT FROM AUTHOR]

The article offers author's views on how Chinese government recognizes that national science programs alone are not capable of sustaining the leapfrogging scientific capabilities. It is mentioned that China has launched a comprehensive effort to become an innovative nation and a global scientific power. The article adds that these developed would be based on resources planning, national science programs and investments in research and development (R&D).

The article presents views of expert Quoc Huy Vu on the paper published on R & D performance in High-Tech Firms in China and argues for author's explanation on industrial upgrading and technological innovations and ignorance about public policy and education. He also discusses some issues for reasonable interpretation including performance indicators for research & development (R & D) activities, and estimation of the relationship between foreign firms and R & D.

This paper investigates the combined role of innovation support policies and firm's own innovative activities on the performance of Chinese small- and medium-sized enterprises (SMEs) in high-tech sectors. By distinguishing two components of innovative activities-research and development (R&D) investments and embedded innovative capacity-the paper develops and tests an integrative moderated moderation model. The results suggest that in Chinese high-tech SMEs innovation-support policies positively moderate the relationship between R&D investments and performance, but this positive effect diminishes when there are higher levels of embedded innovative capacity. These results highlight that the relationship between government innovation policies and a firm's own R&D investments is not only reciprocal but also more complex than the one so far analyzed in the literature. The results show in particular that the effects of innovation-support policies on R&D investments is not as neat as it seems, because of the internal balance within the firm between investment in R&D and other sources of innovation. Therefore, although innovation support policies have been found to help Chinese SMEs in high-tech sectors benefit from their R&D investments, these policies are particularly effective only when R&D investments are significantly driving firms' innovative activities. This highlights the relevance of both government support and a firm's own efforts in the competitive modernization of Chinese SMEs. [ABSTRACT FROM AUTHOR]

Structural monetary policy (SMP)—differentiated policy action targeting specific economic activity— has become more frequently applied by major central banks lately, although the practice of developmental central banking has been in existence for quite some time. The effectiveness of such structural monetary policy, however, has not been adequately evaluated. In this paper, we attempt to provide a comprehensive analysis of SMP introduced by the People's Bank of China and also to offer a broad framework for thinking about SMP.  We first document the brief history and main components of China's SMP and estimate the narrow- and broad-measures of SMP accounting for 17.9 percent and 27.9 percent of base money, respectively, at the end of 2022. We then discuss two key factors determining success of SMP: bank credit flows to the targeted area and risk implications for banks. By applying the difference-in-difference and panel data analysis approaches using a monthly data set of city commercial bank loans, we evaluate the impacts of targeted required reserve ratio (RRR) cuts in 2019 and 2020 on small- and medium-sized enterprise lending. No statistically significant impact is found, whether in the short run or in the long run, and whether for medium-sized enterprises or for micro and small businesses). We conclude that, as no statistically significant impact of targeted RRRs are found, SMP's effectiveness, if exists at all, might be temporary; when facing impaired monetary policy transmission, it is important to conduct careful analysis of its effectiveness and sustainability. [ABSTRACT FROM AUTHOR]

This paper evaluates the minimum living standard guarantee program (Dibao) in rural China using several methods including the income approach, the multidimensional poverty approach, and a proxy means test approach. We find that the targeting accuracy of the program appears greater the more comprehensive the evaluation method used—but all these methods find low levels of targeting accuracy. Because Dibao fund allocation is largely decided by the villagers, who take a more holistic view in selecting "poor" households than the various evaluation methods, we argue that the low targeting efficacy may be due to the lack of comprehensive evaluation method, as opposed to the low targeting of the program itself. This paper argues that the community-based targeting used by the Dibao program may be a better way to combat poverty in many developing countries, as it requires less administrative capacity and overcomes the difficulties of identifying poor households that qualify for assistance. [ABSTRACT FROM AUTHOR]

This paper examines the effects of exports on employment in China, Indonesia, Japan, and Korea, using the World Input-Output Database for the period from 1995 to 2009. One of the major findings is that, although more than 80 percent of exports in the four study countries are from manufacturing industries, a significant number of workers in non-manufacturing industries depend upon manufacturing exports through vertical inter-industry linkages. An implication is that even in cases where an industry is not particularly export-oriented through its reliance on the export of final goods, the industry may still be subject to potential effects-positive or negative-linked to changes in export demand. [ABSTRACT FROM AUTHOR]

Large-country development faces the challenge of meeting the dual goals of economic growth and regional development, while resolving the tension between these two objectives. Over the past decade, the Chinese government has attempted to use the allocation of construction land and fiscal transfer payments to encourage the industrial development of its underdeveloped areas. This paper shows that this attempt was accompanied by an overall economic slowdown and a decline in resource allocation efficiency, which not only undermines the international competitiveness of China's economy, but also creates an elevated risk of debt. The paper points out that the realization of China's dual goals of efficiency and regional balance will require increased labor mobility rather than a simple increase in the scale of policy driven resource relocation. [ABSTRACT FROM AUTHOR]

This paper examines the impact of the current U.S.–China trade war on Malaysia. Malaysia's neutral stance leaves possibilities open for trade and investments from both sides. Our survey shows that the negative impacts have been minimal so far. The country seeks to capitalize on the trade war by promoting local industries that are substitutable to those from the United States and China. Efforts to improve competitiveness by improving physical and digital infrastructure, facilitating small- and medium-sized enterprises to export, and promoting potential domestic suppliers are being made to ensure favorable conditions to receive foreign direct investment relocating from China or the United States. Malaysia is also cooperating with its regional partners to further mitigate the effects of the trade war. Malaysia may, however, be its own greatest enemy in capitalizing from the trade war because the decline in human capital is making it difficult to harness the benefits from upcoming deglobalization headwinds. [ABSTRACT FROM AUTHOR]

Congestion and long commutes would lower the livability of cities. To curb such externalities, various policies have been adopted to limit urban sprawl. However, the empirical relationship between urban sprawl and traffic externalities is ambiguous. This paper investigates this issue by examining state-built new towns (a particular feature of China's urbanization processes) and congestion delay indices (measured from the data for urban trips). The results show that the number of new towns was positively correlated with intra-urban congestion and negatively correlated with traveling speed. Further, the congestion effects were severe during rush hours. Cities with more new-town projects have more residents choosing long-distance commuting modes, and greater average commuting time and distance. This finding shows a worse job–housing balance in the city. Moreover, these traffic externalities were primarily caused by new towns built since 2008, which have a larger scale and longer distances to the urban center. [ABSTRACT FROM AUTHOR]

This paper summarizes stylized facts of three dimensions of population agglomeration and the radiation effects of central cities relating to the evolutionary laws of China's population distribution. We test with decennial census data from 2000 to 2020 to identify determinants of population agglomeration and radiation effects. The results show that the distance to the major ports, central cities, and city centers of central cities determines China's population concentration. Moreover, central cities have apparent radiation effects. The closer to the central cities or the larger the population and economic scale of the central cities, the more the population is concentrated in peripheral cities or counties. [ABSTRACT FROM AUTHOR]

This paper investigates the most essential issues behind the ongoing U.S.–China trade war. In addition to the apparent bilateral trade imbalance, China's status as a non-market economy (as labelled by the Trump administration) is one of the most fundamental reasons that the United States triggered the U.S.–China trade war. Accordingly, the United States' most pressing request is to urge China to implement further structural reform. This paper argues that the current Chinese economy is quickly becoming a modern market economy with a unique Chinese character. This is evident from ongoing structural reform to create a competitive environment between state-owned enterprises and private enterprises, and through a further opening-up of the market by guaranteeing a wider and deeper market access for inbound foreign direct investment. [ABSTRACT FROM AUTHOR]

Trade statistics portray China as the largest exporter of high-tech products. This paper demonstrates that China's leading position in high-tech exports is a myth created by outdated trade statistics, which are inconsistent with trade based on global supply chains. Current trade statistics mistakenly credit entire values of assembled high-tech products to China, thus greatly inflating its exports. This paper adopted a value-added approach to more accurately measure high-tech exports, revealing that, in 2009, China's value-added accounted for only about 3 percent of the total value attributed for its exports of iPhones and laptop PCs. Furthermore, if assembly is the only source of value-added by Chinese workers, in terms of technological contribution, these assembled high-tech exports are indifferent from labor-intensive products, and so they should be excluded from the high-tech classification. [ABSTRACT FROM AUTHOR]

The author comments on the study "The Effect of an Introduction of Retail Sales Tax in China." He discusses the contribution of the study, questions that need to be answered in the study, and his suggestion for the study to emphasize different effects of value-added tax (VAT) and retail sales tax (RST) on saving and capital demand.

The article offers author's views on how Chinese government has assigned a central role to science, technology and innovation for the country's economic development. It is mentioned that China has launched a comprehensive effort to become an innovative nation and a global scientific power. The article adds that these developed would be based on resources planning, national science programs and investments in research and development (R&D).

Chinese investment abroad has grown significantly in connection with the Belt and Road Initiative (BRI). This paper tries to answer two questions: First, what considerations gave birth to the BRI? And second, what are the project's economic effects in terms of capital flows and international trade? It is found that the project is above all a way to deal with large surplus capacity in China's capital-intensive industries, to increase growth in relatively poor regions of the country, and to secure a supply of energy and raw materials. For other countries involved in the project, BRI investments are a means to increase production and international trade. International trade and foreign direct investment have been positively affected, although to a limited extent. Finally, there are concerns that lack of transparency in Chinese lending may lead to increased corruption, and that some countries will face financial difficulties. [ABSTRACT FROM AUTHOR]

Market efficiency can be enhanced by market liquidity if it promotes value creation, leading to increasing stock returns. A positive relation between liquidity and stock returns implies capital movement towards more efficient investment at a low cost for value creation. Existing studies are controversial for the relation being positive, negative, or inconclusive. With such inconsistency, this paper uses data from more than 3,200 company stocks from the UK, the United States, Germany, and China securities markets over a 10-year period to estimate the relation across these four markets, respectively. The framework of estimation is robust to outliers and macro shocks, while eliminating the issues of multicollinearity, autocorrelation, and endogeneity. The study finds some interesting results. We report strong evidence for Germany and the UK of a positive relationship between returns and liquidity. In contrast, China exhibits the opposite result, and the United States provides inconclusive evidence, possibly caused by significant diversification of value perception on liquidity. Our results imply that the German and the UK markets are more efficient than the emerging market of China because liquidity assists capital movement more efficiently. The policy implication of this research is that, for emerging stock markets, the costs of capital movement should be reduced in order to increase the efficiency of funding allocation. [ABSTRACT FROM AUTHOR]

This paper examines the impact of political connections on corporate mergers and acquisitions (M&As) behavior using data from companies listed in Chinese equity markets during the period 1998 to 2010. Our empirical results indicate that firms with political connections have a greater probability of engaging in M&As and tend to engage in larger-scale M&As. The impact of political connections on corporate M&As is mainly realized via government intervention in state-owned enterprises (SOEs). The paper also investigates the impact of political connections on M&A performance, demonstrating a significantly negative impact when SOEs are involved but a significantly positive impact when non-SOEs are involved. The findings of this paper suggest that the political connections of Chinese listed firms have a strong influence on M&A activities and performance. [ABSTRACT FROM AUTHOR]

This paper studies the determinants of China's inflation and finds that demand-pull factors have been more important than costpush factors in driving the inflation in the past decade. Because China's economic growth will gradually moderate and because the adjustment of the prices of the factors of production is also underway, the cost-push factors may soon play a more significant role in driving future inflation. Thus the Keynesian-style demand-side policy will not be enough to control inflation. More attention must now be given to supply-side management--such as dismantling monopolies, boosting private investment, encouraging innovation, and improving productivity--to mitigate the medium- to long-term inflation pressure. [ABSTRACT FROM AUTHOR]

Developing Asia has traditionally relied on exports to the United States and other industrialized countries for demand and growth. As a result, the collapse of exports to the United States and other industrialized countries during the 2008-09 global financial crisis has sharply curtailed GDP growth across the region. The emergence of the People's Republic of China (PRC) as a globally influential economic force is fueling hopes that it can supplement the United States as an additional source of demand and growth. The central objective of this paper is to investigate whether exports to the PRC has a significant and positive effect on the GDP of eight developing Asian countries. Although the study's results indicate that exports to the PRC contributed to developing Asian countries' recovery from the global crisis, it is far too early to make well-informed judgments about the PRC's ability to support Asia's growth in the medium and long term. [ABSTRACT FROM AUTHOR]

The substitution among the exports of countries is a major phenomenon and foundation of the fast-changing global economy. However, the econometric method using aggregate data can usually estimate the extent of substitution only several years after the substitution has happened. This paper designed a detailed market share (DMS) analysis method that uses detailed trade data to document the actual replacement among the exports of different countries. The DMS indicators can measure the replacement that happened in every product or product group for every year. Therefore, DMS indicators can also be used as variables in further econometric research. This paper employed indicators to analyze the exports of Taiwan and China to the United States during 1990 and 2006. We found that the proportion of Taiwan's exports to the United States that was replaced by China during this period was about 71 percent to 85 percent. Taiwan, Japan, and other developed countries were the major sources of China's export growth. China also replaced a great part of developing countries' exports. China has also started to replace the high-end products of advanced countries. We found that 63 percent, 60 percent, and 33 percent of the highly human capital-intensive exports from Taiwan, Korea, and Japan, respectively, have been replaced by China. Most of these replacements happened in high-end products after 2000. Therefore, more products from advanced countries will be replaced by China in the near future. [ABSTRACT FROM AUTHOR]

Developing countries are facing new competitive challenges to attract sufficient external financing to sustain their growth. This paper attempts to answer the question: How can a country attract more long-term, stable foreign investment? Our study shows the increasing role of a political risk factor as a driver of foreign direct investment (FDI) inflows, and suggests that reduced financial risk after the East Asian crisis might have led to a substitution of FDI with capital market flows. Our study also shows the importance of fostering sound regulatory systems and good institutions for attracting FDI, for example, establishing a stable government that implements economic policy effectively and reduces uncertainty associated with internal disorder and a lack of democratic regime. The simulation exercise suggests that an improved investment climate would increase FDI by 7 percent and would benefit China most. [ABSTRACT FROM AUTHOR]

The author comments on the paper "The Role of Domestic Institutions and FDI on Innovation--Evidence From Chinese Firms" by Yi Qu and Yingqi Wei. He discusses the impact of foreign direct investments (FDI) on innovation in domestic firms. He also addresses the importance of the institutional context to firm innovation and the effect of domestic institutions on firm innovation.

Despite its significance in policymaking and theory, empirical work on external returns to education has not been fruitful, and most studies focus on developed countries. This paper discusses external returns to education in China, an important developing economy. Using longitudinal data from the China Health and Nutrition Survey, we estimate a fixed-effects instrumental variables model and find positive returns of about 10 to 14 percent. Negligible returns are found for urban, female, and highly educated workers, and returns are positive and statistically significant for rural, male, and poorly educated workers. This suggests that China should increase public investment in education and target rural areas and poorly educated workers. Gender differences in the external returns to education may also imply that China should make more efforts to enhance the capacity of "networking" and competitiveness for women. [ABSTRACT FROM AUTHOR]

The author talks about the decline in income inequality in China. Topics discussed include Systematic increase in income gap with economic growth since 1990; impact of wage income on the decline in income inequality; and discussion on policies related to China's income inequality and academic studies.

Although Chinese exports to the United States hit an all-time high in 2022, it would be incorrect to conclude that the U.S.–China trade war had no effects on trade. By exploiting fine product-level information on trade war tariffs, this paper demonstrates how the trade war diminished China's exports to the United States in tariff-impeded products, while expanding opportunities for exports from other countries in a fashion that had some systematic characteristics. First, the impact of the trade war tariffs was not immediate, as trade responses took place with a lag. Second, the responses to trade-war tariffs were heterogenous across countries and regions, with finer distinctions by product categories. Finally, trade that could be viewed as highly tied to global value chains (GVCs), such as trade in information and communication technology products, exhibited stronger reactions to the imposition of trade-war tariffs. These responses, and their implications for the organization of global supply chains, are discussed considering current trade concerns. [ABSTRACT FROM AUTHOR]

Despite the dramatic reduction of poverty in China over the past 35 years, poverty has not been fully eradicated in rural areas and, in the context of growing inequalities, it remains a national concern. This paper examines a local cash-for-work program launched in mountainous areas of the Beijing municipality in December 2004, with a view to understanding both the challenges and achievements of pro-poor programs in China. Using original household survey data, we first highlight the fairly good targeting performance of the program towards the local poor . Second, participation equations provide evidence of increasing local income without crowding out local agricultural activities. Finally, a decomposition of household income inequality by source highlights the strongly equalizing effect of the program on peasants' income. [ABSTRACT FROM AUTHOR]

This paper investigates the enabling factors of domestic institutions and foreign direct investment (FDI) on firm innovation in China. China has made significant institutional changes and has attracted substantial FDI, aiming to facilitate domestic innovation. Drawing on the institution-based view, we investigate how domestic institutions and FDI affect firm innovation. The results from a comparative case study of five Chinese firms and a large-sample econometric analysis based on Chinese firms reveal the positive impact of domestic institutions on innovation, but FDI is shown to have negligible effects.We argue that, given China's institutional setting, FDI may be a channel for technology transfer but this does not necessarily lead to innovation. [ABSTRACT FROM AUTHOR]

The author comments on the paper "The Role of Domestic Institutions and FDI on Innovation--Evidence From Chinese Firms" by Yi Qu and Yingqi Wei. She recognizes the paper for examining the effects of foreign direct investments (FDI) on innovation in domestic firms and the role of domestic institutions on innovation in domestic firms. She raises a number of questions regarding the importance of the institutional context to firm innovation and the attitude toward FDI.

The article looks at the comments of Economics Professor in Japan, Kozo Kiyota on the article related to the common and country-specific factors of the global total factor productivity (TFP) slowdown, analyzed on the basis of a large sample of countries and years, from the mid-1950s to 2011. The article discusses findings focussing on factors like energy prices, educational attainment, and high investment rates, including concerns about China and developing Asia.

China is now the world's second largest economy, and it is expected to overtake the United States to become the largest by 2020. What are the implications for the global environment and climate change if China surpasses the United States? There are major concerns with China's rapid rise because its economic and industrial structure is increasingly dependent on the consumption of energy, raw materials, and electricity. In 2010, China's GDP was approximately 40 percent of the United States' GDP, yet it was the world's largest polluter and the biggest consumer of energy and electricity. This implies that the energy efficiency of the Chinese economy measured by energy consumption per unit of GDP is about one-third of that of the United States and one-fourth that of the EU and Japan. If the Chinese economy continues to grow as fast as it has in the past, without changing its structure and improving energy efficiency, China's growth will cause severe damage to the global environment. This paper analyzes the evolution of energy efficiency in the Chinese economy and stresses the importance of transforming China's economic structure. [ABSTRACT FROM AUTHOR]

This paper argues that renminbi (RMB) internationalization and China's strategic interests in ASEAN will combine to deepen economic integration and pave the way for creating a de facto RMB bloc consisting of the 10 ASEAN countries, China, Hong Kong, and Taiwan--a grouping we call ASEANNew3. Such a currency bloc is likely to weaken the initiatives of the existing ASEAN3 (China, Japan, and Korea) for regional monetary-financial cooperation because neither Japan nor can Korea join the new currency bloc for economic and political reasons. This paper also argues that RMB internationalization would delay the resolution of the trade imbalance between East Asia and the United States because China would be pressured by the other members of ASEAN New3 to maintain stability of the RMB vis-à-vis the U.S. dollar . [ABSTRACT FROM AUTHOR]

China has had a remarkably high ratio of investment to output ever since economic reform began in 1978, surpassing almost all other economies. This is an important proximate determinant of China's high growth rate. This paper gathers together the available evidence to explain why investment is so high: factors both on the demand and on the supply side, and in the latter case the availability of both resources and funds. It analyzes the rate of return on capital and its evolution, and the factors that have kept it up. It draws on the literature to explain the high saving rate, and considers why the imperfect capital market and institutional deficiencies have not constrained investment. The state-owned and private sectors are treated separately because of their different objectives, behavior, and funding. [ABSTRACT FROM AUTHOR]

This article shares the perspectives of experts on the paper "Re-balancing China: Linking Internal and External Reforms." Maria Socorro Gochoco-Bautista comments that the paper did not consider the special position of the U.S. in the global economy which arises from the reserve-current status of the U.S. dollar in explaining imbalances globally. Prema-chandra Athukorala questions why the particular model employed in the paper was labeled as the Swan-Salter model. Naoyuki Yoshino gives his opinion on increasing domestic money supply and foreign reserves.

Technological spillovers from foreign direct investment (FDI) have been regarded as a major source of technical progress and productivity growth. This paper explores the role of international and intranational technological spillovers from FDI in technical change, efficiency improvement, and total factor productivity growth in Chinese manufacturing firms using a recent Chinese manufacturing firm-level panel data set over the 2001-05 period. International industry-specific research and development (R&D) stock is linked to the Chinese firm-level data, international R&D spillovers from FDI and intranational technological spillovers of R&D activities by foreign invested firms in China are examined as well. Policy implications are discussed. [ABSTRACT FROM AUTHOR]

This paper examines U.S. goods trade with China, focusing on the performance of exports. Throughout the analysis, we explore whether U.S. trade is unusual by contrasting it with trade from Japan and the EU-15.1 The issue is examined from three perspectives: the commodity composition of exports, the role of multinational corporations (MNCs), and the determinants of trade as specified in a formal "gravity model." As an initial point of departure, we show that the commodity composition of U.S. exports to China is similar to the pattern of exports to the world as a whole, and that the operations of U.S. MNCs have only minor implications for trade with China. Consequently, we emphasize the estimation of a set of "gravity equations" that explore the role of market size and distance from the United States. Distance exerts a surprisingly large effect on trade. Finally, although exports to China may be a small share of U.S. GDP, they are relatively substantial compared to U.S. exports to other countries. In other words, the measure of U.S. trade performance in China is distorted by the low level of its exports to all countries. We present evidence that the United States underperforms as an exporter relative to a peer group of high-income European countries and Japan. [ABSTRACT FROM AUTHOR]

The People's Republic of China (PRC) has now decided to shift its value-added tax (VAT) from production-based to consumption-based. This transition is currently piloted in the three provinces of the northeast PRC, and is expected to be extended to the whole country in the coming 2 or 3 years. Using a two-region dynamic general equilibrium model with overlapping generations, this paper investigates the macroeconomic and welfare effects of the VAT transition in PRC. The distribution effects between generations are also analyzed to get a sense of public opinion toward the reform. We put special emphasis on the pace of reform by analyzing the pre-announcement effects and the inter-regional impacts of tax reform that began in one pilot region. The simulation results suggest large welfare gains from the VAT transition. However, the pilot reform in the northeast provinces, which delays the national implementation of consumption-based VAT, would involve substantial transitional costs for the rest of the PRC. [ABSTRACT FROM AUTHOR]

This paper addresses questions related to the cost of China's bank restructuring and financing. We first propose a framework for recognizing losses. Then, we examine the recent major moves by the Chinese government to repair the country's bank balance sheets. Finally, we explore the implications of the Chinese ways of funding the bank restructuring. We find that the Chinese government has been decisive in confronting the costly task of bank restructuring. Looking through the elaborate funding arrangements adopted so far, the Chinese taxpayers have paid most of the bill. [ABSTRACT FROM AUTHOR]

Given the domination of bank financing, nonperforming debts (NPDs) in large Chinese enterprises are a proxy for nonperforming loans (NPLs) in China's major banks. Using a firm-level survey of more than 20,000 large and medium-sized industrial enterprises conducted by the National Bureau of Statistics of China, this paper estimates both the level and ratio of NPDs across ownership type, industry, and region for the period 1995-2002. The results show that NPD ratios have been falling since 2000 as a result of the rapid expansion of better-performing non-state enterprises (NSEs), the improved performance of state-owned enterprises (SOEs), and the exit of poor-performing enterprises (which has been facilitated by asset management companies and other merger and acquisition activities). SOEs, however, are still much more likely than NSEs to generate NPDs. This paper provides useful tools and sector information for assessing enterprise debt risks and draws lessons for banking reform in China. [ABSTRACT FROM AUTHOR]

In China, political control is centralized and economic management is decentralized. This gives rise to a serious principal-agent problem, in which the agents are often better informed than the principal. China also has a semi-marketized economy involving much state intervention. This intervention serves both a political and an economic function. It enables the Communist Party to remain in political command and generates formidable patronage resources. It also provides the policy instruments, including incentive structures for officialdom, to maintain a "developmental state." The combination of economic decentralization and a semi-marketized economy creates a problem of weak accountability and a breeding ground for rent-seeking and corruption. For a quarter of a century China's leadership gave overwhelming priority to the objective of achieving rapid economic growth. This policy was viewed as providing political legitimacy and securing the best protection against social instability. It is argued that the leadership was able to solve the principal-agent problem in its pursuit of economic growth. By contrast, the solution to the principal-agent problem failed in other respects, giving rise to societal costs. Little attention was paid to the dramatic socioeconomic changes--including rising inequality and economic insecurity, environmental degradation, mass migration, rent seeking, and corruption-- which accompanied economic growth and posed new challenges. It is argued that these changes help to explain the failure of life satisfaction scores to rise over the two decades from 1990-2010. They can also help to explain the rise in indicators of social instability over that period. It is to be hoped that the new leadership's current anti-corruption campaign, together with its declared policy intention to reduce state economic intervention and increase reliance on competitive markets, will strengthen deterrence and weaken opportunities for rent seeking and corruption. The paper carries the implication that China's economy cannot be well understood except through the lens of political economy. [ABSTRACT FROM AUTHOR]