China and the World Economy

by Greenaway, David; Milner, Chris; Yao, Shujie

• ISBN13: 9780230521520
• ISBN10: 0230521525
• Format: Hardcover
• Copyright: 2010-10-15
• Publisher: Palgrave Macmillan

Summary

The rising importance of China and its impact on the world economy has attracted massive interest worldwide. This book examines a wide range of issues related to China and its relationship with the world economy, focusing on its succesful development experiences and how its rise may affect the rest of the world in the coming decades.

Author Biography

David Greenaway is Vice-Chancellor of the University of Nottingham, the institution's principal academic and administrative officer. Previously a Pro-Vice-Chancellor for both Research and Infrastructure, he is a Professor of Economics, and founded the Leverhulme Centre for Research on Globalisation and Economic Policy at this University. His research interests lie primarily in the fields of trade and labor market adjustment, cross-border investment, and international trade policy. David has served as a consultant to the World Bank, United Nations, European Commission, General Agreement on Tariffs and Trade, and HM Treasury. Since 1998 he has been a member of the Armed Forces Pay Review Body, and in 2004 he was appointed by the Prime Minister as its Chair. He is also a member of the Senior Salaries Review Body. Chris Milner has been a Professor of International Economics at the University of Nottingham since 1994. Previously he held a Chair in Economics at Loughborough University. He was Head of School from 1995 to 2002 and was reappointed as Head of School again in August 2004 to August 2008. He is a Research Fellow of both the Leverhulme Centre for Research on Globalisation and Economic Policy (GEP) and the Centre for Research on Economic Development and International Trade (CREDIT). Shujie Yao gained his Ph.D. in Economics from the University of Manchester in 1989 and then worked at the Universities of Oxford, Portsmouth and Middlesex as Research Fellow, Lecturer, Professor and Chair of Economics before joining the University of Nottingham as Professor of Economics and Chinese Sustainable Development in August 2006. Subsequently appointed as the first Head of the School of Contemporary Chinese Studies at Nottingham in January 2007, Professor Yao is an expert on economic development in China. He has published six research monographs, and edited books, as well as producing more than 70 refereed journal articles. He was ranked eighth among the world's China scholars specializing in the study of the Chinese economy in a recent article published in the Journal of Asian Economic Literature.

Table of Contents

List of Figures	p. xii
List of Tables	p. xiv
List of Editors and Other Contributing Authors	p. xvi
Introduction	p. xxiv
China, the WTO and the Doha Agenda	p. 1
Introduction	p. 1
China's WTO Accession Commitments	p. 2
Post-accession Liberalization	p. 4
The Full Liberalization Benchmark	p. 5
Doha Scenarios	p. 10
Interpretation of the Results	p. 15
Conclusion	p. 16
China and Regional Integration	p. 19
Introduction	p. 19
Background	p. 20
Reactions to the 1997 Asian Crisis: Money and Politics	p. 22
Regionalism in the Twenty-first Century: Mainly about Trade	p. 23
China's Regional Initiatives with Western Neighbours: Mainly about Security	p. 26
Conclusion	p. 29
Balance or Imbalance of China's Economy versus the World	p. 37
Introduction	p. 37
The Causes of China's High Growth Rate	p. 42
Why High Savings and Low Consumption Rates in China?	p. 43
Other Related Issues: Internal Imbalance and Policy Implications	p. 47
What Can China Try to Do to Reduce Imbalance?	p. 49
Conclusion	p. 53
Has China Displaced Other Asian Countries' Exports?	p. 60
Introduction	p. 60
Previous Research on China's Impact on Asia	p. 61
China's Export Performance	p. 63
The Gravity Model	p. 67
Data Sources and Estimation	p. 69
Estimation	p. 70
Econometric Results	p. 71
Overall Displacement Effect	p. 71
Changing Displacement Effect	p. 72
Variation in Displacement Effect across Markets	p. 72
Variation in Displacement Effect across Asia	p. 73
Sensitivity Analysis	p. 76
Summary of Findings	p. 76
Offsetting Effects	p. 76
Linking Displacement and Offsetting Effects	p. 79
Conclusion	p. 79
China, Commodity Prices and the Terms of Trade	p. 91
Introduction	p. 91
What are the Terms of Trade and Why are They Important?	p. 92
The Evidence	p. 96
Does the Entry of China into Global Markets Impose a Structural Break on Global Price Trends?	p. 98
China and the Price of Manufactures	p. 99
China and the Price of Hard Commodities	p. 101
China and the Price of Agricultural Products	p. 105
With What Consequences for the Terms of Trade?	p. 106
Inward and Outward FDI in China	p. 112
Introduction	p. 112
Trends and Patterns of FDI	p. 113
Inward FDI	p. 113
Outward FDI	p. 117
Factors Affecting FDI	p. 121
Determinants of Inward FDI	p. 121
Determinants of Outward FDI	p. 123
Effects of FDI on China's Economy	p. 125
Direct Impact of FDI	p. 125
Spillover Channels	p. 127
Conclusion	p. 129
Outsourcing to China	p. 135
Introduction	p. 135
Determinants of Outsourcing and their Impact on the Economy	p. 139
International Outsourcing	p. 139
Empirical Studies on Determinants of Outsourcing	p. 140
Measurement of Outsourcing to China	p. 141
Japan's Imports from China and the US	p. 141
Outsourcing to China in the Manufacturing Sector	p. 144
Outsourcing Measured by Parts and Components Trade with China	p. 147
Vertical Intra-industry Trade between China and Japan	p. 150
Outsourcing in the Services Sector	p. 152
Outsourcing and Firm Heterogeneity: Evidence from Japanese Firm-level Survey Data	p. 153
Characteristics of Types of Outsourced Tasks	p. 155
Outsourcing and the Types of Suppliers	p. 156
Outsourcing by MNEs' Affiliates	p. 157
Outsourcing and Firm Heterogeneity	p. 158
Conclusion	p. 160
Multinationals and Trade Linkages	p. 165
Introduction	p. 165
Foreign Firms and the Structure of Chinese Trade	p. 165
The Effects of Foreign Firms on the Exports of Domestic Chinese Enterprises	p. 170
Estimating the Effect of Multinational Proximity on New Private Chinese Trade	p. 176
Conclusion	p. 180
Patenting in China	p. 184
Introduction	p. 184
Establishment of China's Patent Law	p. 185
The Growth of Patenting	p. 186
Explanations of the Patenting Surge	p. 188
Our Statistical Findings	p. 189
Survey of Patenting Behavior	p. 190
Conclusion	p. 191
Economic Growth, Foreign Investment and Regional Inequality in China	p. 194
Abstract	p. 194
Introduction	p. 194
Regional Inequalities in China after Economic Reform	p. 197
Empirical Models and Data	p. 201
¿-convergence	p. 201
ß-convergence	p. 203
Estimation Results	p. 208
Estimation Results of ß-convergence at National Level	p. 208
Conditional Income Convergence	p. 212
Estimation Results of ß-convergence at Regional Level	p. 215
Absolute Income Convergence	p. 216
Conditional Income Convergence	p. 216
Conclusion	p. 220
China's Labour Market: Evolution and Impediments	p. 226
Introduction	p. 226
Origins of Chinese Labour Policy	p. 227
Wage Policy and its Evolution	p. 229
Employment Policy and its Development	p. 234
Retrenchment and Radical Urban Reform	p. 235
Conclusion	p. 238
Index	p. 243
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