Index

Page references to Figures or aggregate output air pollution, 179 Tables will be in italics data on, 93 regulation, 189–91 acceleration principle, 125, 143 human capital, 209 Almanac of China’s Economy, economic fluctuations, macroeconomic analysis, 30, 37, 39 112–13, 114, 115, 143, 144 population, 198, 199 117, 118 monetary policy, 121, 126 AMCs see asset management accumulation, 93, 96, 116, multiplier-accelerator companies 143, 161 model, 110, 111 (AMCs) adaptive expectations neoclassical growth model, American International Group hypothesis, 117 91, 92 (AIG), 247 administration planning, 380 Anderson, T. W., 391 county administration, 39, see also output Ando, Albert, 391 67, 84 agricultural areas see rural Andreoni, James, 189 of economic planning, 37–40 areas Anhui Provincial Women’s Administrative Council, Agricultural Bank of China, Association, 200 Financial and 38, 50, 234 Annals of Mr. Liang Yansun Economic Agricultural Development of Sanshui, The Commission, 33 Bank, 69, 242 (1939), 10, 289, aggregate demand, 72, 237, agriculture 367, 375 317, 422 economic reform, 45–6, Asian financial crisis, 104, economic fluctuations, 110, 53–4, 81–2 374, 421 111, 112 incentives, 45, 54 economic reform, 68, education system and in planned economy, 70–1, 85 policy, 401, 402 26, 28 foreign trade and macroeconomic analysis,COPYRIGHTED responsibility system, MATERIALinvestment, 72–4 126, 130, 131, 132, 355–6 macroeconomic analysis, 139, 140 see also farming 131, 139

China’s Economic Transformation, Third Edition. Gregory C. Chow. © 2015 John Wiley & Sons, Ltd. Published 2015 by John Wiley & Sons, Ltd.

0002253572.indd 425 12/3/2014 4:03:27 AM 426 Index

asset management, 347–65 inflation, 237, 238 British Empire, 9–10 assets for own use, 353 insurance companies, 248–9 Brzybyla, Heidi, 76 assets for use by others, 353–5 monetary policy, 236, Buck, John L., 11–12, 101 hypothesis, 349 238, 239 budgets/budget constraints, laws of, 349–51 possible reform, 241–3 137, 189, 205, 206, managing one’s own person, possible weaknesses of 212, 244 352–3 system, 240–1, 360 macroeconomic analysis, nonhuman assets, 347 reform, 49–50, 68–72, 85 145, 146 nonmarket trading of specialized banks, 233–4 and planning, 29, 30, 35 services and stock markets, 245–8 soft budget restraints, goods, 355 training of banking 275, 289 physical assets, 219, 353–5 personnel, 234, bureaucracy/bureaucrats, 55, poor quality of delivery, 235, 242 235, 245, 279, 420 354–5 transparency requirement, 85 asset management and poor quality services, 353–4 trust and investment corruption, 351, 354, rent seeking, 351, 354 corporations, 245 355, 358, 359, 361, 362 responsibility system, under, Banking Regulatory behavior, 240, 295–6, 355–8 Commission, 360 348, 360 supply of services, 350–1 Bankruptcy Law (1986), 372 and economic reform, 69, welfare effects of barefoot doctors, 225, 226 79, 80, 84, 86 restrictions on use, 351 Barsky, Robert, 256 foreign investment, 335, 338 asset management companies Becker, Gary S., 205, 206, government, 47, 282, 289, (AMCs), 71, 243 210, 213, 219, 222 298, 338, 381, 407, asset misuse, 349, 351, 362, behavior 409–10, 418 363, 364, 407, 413 bureaucratic, 240, 295–6, legal system, 380, 381, 382 collectively-owned land, 358–9 348, 360 nonstate sectors, 289, 295, see also corruption consumer, 30 296, 297, 298 astronomy, 8 economic, 15, 29–32 rent seeking by automobile industry, 55, 164, of farmers, 30–1, 419 bureaucrats, 354 179, 293, 348, 373 of state enterprises, 265–85 bureaucratic market economy, and economic reform, 74, stock prices, 254 86, 289, 296, 334, 423 75, 76, 80 see also bureaucracy/ Butterfield, Fox, 348 foreign investment, 340, 341 bureaucrats; corruption foreign trade, 307, 308, 320, Beijing Olympics (2008), 80 Campbell, John, 256, 257 321, 323 Binglin Zhong, 389 capital, data on, 93–4, 95–6, 97 autonomous regions, 39, 61 birth rates, 197, 198, 201–2, capital flows, 328 203, 204 capital goods, in planned bad debts, 71 economic explanation, 205–7 economy, 26, 27 Baldwin, R. E., 321 Book of Changes (Yiching), 5 capital stock, 25, 209, 214, Bank of China, 12, 234, 289 Book of Li (etiquette), 5 277, 279 Bank of Communications, 12 Book of Poems, 5 economic fluctuations, 111, banking and financial sector, brain drain, 221 112, 113, 118 233–52 Brazil, 70, 186 economic growth, 92, 94, commercial banks see bribery, 58, 354, 407 96, 97, 98, 99, 104, commercial banks see also corruption 105, 106 factors affecting functioning brigades, commune system, macroeconomic analysis, of banking system, 30, 31 143, 144, 146, 237–9 Britain, 328, 368, 386, 415 147, 153

0002253572.indd 426 12/3/2014 4:03:27 AM Index 427

capitalism China Report: Social and on macroeconomic policies, banned activities, in Economic 127, 134, 136, 143, Cultural Revolution, 46 Development 144, 146, 149, 150, capitalist economy versus 1949–1989, 97 157 socialist economy, 347 China Statistical Yearbook on Shanghai Stock Market, “crony capitalism,” 70–1 banking and financial 254, 256, 257, and imperialism, 21 sector, 246, 248 260, 263 in Song dynasty, 8, 15 consumption, 162, 163, Chungking (Chongqing), carbon dioxide emission, 178, 164, 175 wartime capital, 11, 179, 181, 184, 191 economic growth, 94, 97 14, 386 central bank see People’s education system and city governments, 203 Bank policy, 399 civil war, 14 Central Committee of Chinese foreign investment, 329, civilization, Chinese, 5 Communist Party, 173, 331, 341 classical works, Chinese, 5, 8 199, 234, 249, 253, 295, foreign trade, 301, 303 Cleaner Production Promotion 296, 356, 368, 369 human capital, 227 Law (2002), 182 and economic reform, 45, macroeconomic climate change, 184 47, 48, 50, 53, 78, 87 analysis, 128 clothing consumption, 49, 77, and planning economy of nonstate sectors, 287 145, 161, 165, 167, China, 24, 34 population, 196 168, 171, 173 centrally planned economy see state-owned enterprises, 283 Coale, Ansley, 202 planned economy/ Chinese Academy of Social Cobb–Douglas production centrally planned Sciences, 266, 392, function, 54, 195, 278, economy 394, 397 291, 304 Chairman Mao see Mao Chinese Association of aggregate, 210, 229 Zedong Science and and economic growth, 92, Chang, Gene Hsin, 23 Technology, 422 94, 99–100, 101, characters, Chinese language, 5 Chinese Communist Party see 106, 108 Che, Jiahua, 408 Communist Party of human capital, 209, 210, chemical oxygen demand China 214, 229 (COD), 187, 188 Chinese Economists macroeconomic analysis, Chen, Guidi, 84 Society, 396 143, 144, 150 Cheng, C. Y., 265, 266 Chinese People’s co-integration relation, 134 Chiang Kai-shek, 11, 14, 15, Congress, 46 collective enterprises, 47, 21, 53 Chinese State Statistics 51, 53, 54, 67, 286, China: 2020 (World Bank), 107 Bureau, 93 287, 291, 316, 357, China: Alive in a Bitter Sea Chow, Gregory C., 24, 54, 56, 372, 419 (Butterfield), 348 83, 165, 167, 175, 188, collective welfare, 413–15 China Banking Regulatory 223, 227, 279, 348, collectively-owned land, Commission, 236 356, 359 misuse, 358–9 China International Trust and on economic fluctuations, collectivism, 45, 414 Investment Corporation 113, 115, 116, 118, colleges see universities and (CITIC), 245 119, 120, 121 colleges China National Offshore Oil on economic growth, 93, command economy see Corporation 94, 96, 97, planned economy (CNOOC), 323 99–100, 101 Commercial Bank Law China Population Statistics on education, 387, 389, 391, (1995), 69, 248, Yearbook, 201 392, 393, 399, 401 370, 372

0002253572.indd 427 12/3/2014 4:03:27 AM 428 Index

commercial banks, 233–5, 360 consumer demand theory, and legal system, 367, 377, and Chinese history, 12, 13 145, 213 380, 380–1, 381 and economic reform, 71–2, consumer goods, 26, 27, 28, lessons from studying 241–2 29, 35, 39 Chinese economy, macroeconomic analysis, 132 consumer price index, 314 407, 422 weaknesses, 243–4 consumers, needs of, 25, 30 measuring, 339 Commission for Restructuring consumption, 161–77 nonstate sectors, 290, 295, the Economic System, energy, 180 296, 298, 299 46, 49, 56, 130, 312, 378 fuel, 183, 184 Council of Economic consumption, 173, 174 household expenditure Advisers, US, 126 Committee on Energy Futures patterns, 165–71, county administration, 39, 67, 84 and Air Pollution in 169–70 credit, 68, 126, 186 Urban China, 179 housing, in rural and urban banking and financial commune system areas, 173–5 sector, 233, 234, 237, abolition, 356 oil, 180–1 241, 242, 243, 244 collapse, 226 rural areas, 166, 172, 173–5 and economic reform, 50, 55 historical background, 23 rural per capita patterns in expanding/extending, 69, planned economy, 26, 30–1 1998, by province, 130, 131, 132, 133, reform, 45 171, 172, 173 234, 237, 313 weak teams, 355–6 trends in per capita nonstate sectors, 288, 289 Communism, 369 consumption, 161–4 supply, 182, 183 Communist Party of China, 24, consumption function credit quotas, 69, 130, 131, 34, 40, 47, 48, 50, 371 aggregate, 119 132, 237, 239, 242 Deng Xiaoping, assumption economic fluctuations, 112, “crony capitalism,” 70–1 of leadership (1978), 114, 116, 117, 119, 120 cross-section analysis, 165, 167 24, 43 of Friedman, 112 Cultural Revolution (1966–76) and economic reform, 78, 79 Keynesian, 112, 126 and corruption, 362 foreign investment, 326, contract responsibility system, economic fluctuations, 119 328–9 44, 48, 241, 263, 280, economic growth, 94 one-party system under, 357, 358, 361, 363 and economic reform, 43–4, 415–17 Cooperative Medical System 46, 52, 55 rise to power, 20–1, 40 (CMS), 226, 228 effects, 25, 155, 155–7 see also Central Committee cooperatives and “four modernizations,” of Chinese Communist and family farms, 23 23, 43 Party; Mao Zedong joint stock, 66, 290 historical perspective, 24 comparative advantage theory, corporate governance, 280, human capital, 217, 222 303–4, 322–3 360, 395, 406, 408, 409 and legal system, 369, 370 competition, market, 25 corruption, 55, 57, 58, 78, 85, macroeconomic analysis, Computable General 130, 257, 280 125, 142, 143, 146 Equilibrium Model, banking and financial and Mao Zedong, 6 76–7, 122 sector, 235, 240 nonstate sectors, 298 computers, 381 bribery, 58, 354, 407 currency exchange rate see Confucius/Confucianism, 5–6, and economic reform, 359–62 foreign exchange rate 366–7, 375, 385 foreign investment, 326, currency supply see money Constitution (1982), 181–2 336, 337–8 supply construction projects, 31, 34, and laws of asset 133, 314–15, 359, management, 347, 349, Daoism, 5 361–2, 380 358, 363, 364 Dasgupta, Susmita, 186, 187, 188

0002253572.indd 428 12/3/2014 4:03:27 AM Index 429

data, reliability of, 93, 94, 257 development, economic see economic behavior, in a Davies, Ken, 341 economic development planned economy, De Haan, Jacob, 240 dialects, Chinese, 6 29–32 death rates, 197, 198, 199 disease, 225 economic development, 40, decision processes, 382–4 distribution 43, 73, 86, 102, 257, decollectivization, 45 costs, PPP theory, 310 359, 363, 390 defense expenditure, 136 in planned economy, 25, banking and financial deflation, 312 26, 28 sector, 242, 245 deforestation, 180 regional, 331–2 and Chinese history, 5, DeLong, J. Bradford, 256 Dixit, Avinash, 416–17 12–13, 14, 15, 16 demand Donaldson, R. Glen, 256 environmental problems, consumer, 213 Dow Jones Index, 257, 260 179, 182, 186, 188, 191 elasticity of see elasticity of Draft State Budget (1980), 35 foreign investment, 327, demand Duan Qirui, 367 328, 333, 336, 343 in planned economy, 27–8, 30 Dunhuang, Gansu province, 7 foreign trade, 307, 313, and supply see demand and dynamic optimization model, 314, 320 supply 142–5, 149 human capital, 209, 210, see also aggregate demand solution of problem, 145–8 220, 221, 227 demand and supply state variables, 145–6 and legal system, 373, 374, balancing, 33 dynasties, history, 4–10, 11, 375, 379 foreign trade, 311 14, 15, 16, 293, 386 lessons from studying Han dynasty, 7 Chinese economy, 406, housing consumption, eastern region, 271, 331 407, 410, 412, 414, 175–6 econometric analysis/ 417, 418, 419, 423 labor, 210–16 modeling, 254, 266, macroeconomic, 132–3 in planned economy, 25, 275, 277, 299, 326, macroeconomic analysis, 27, 29 338, 418 126, 130 as “the Way,” 7 consumption, 165, 175–6 promoting, 417, 419 democracy, 13, 16, 383 definitions, 165 rapid, 9, 62, 205, 220, 297, demographic factors see economic fluctuations, 110, 298, 401, 406, 410, 414 population 118, 120, 122 regional, 69 Deng Xiaoping, 15, 289, 298 economic growth, 91, 93, role of population and assumption of Communist 105, 108 human capital in, Party leadership education system and 194–6, 198 (1978), 24, 43 policy, 391, 392, 397 successful, 44, 56, 59, 414 and economic reform, 45, environmental problems, and technology, 15 50, 56, 57 178, 186 WTO membership, impact, open-door policy, 50, 59, inflation, 134, 135, 136 75, 78, 79 131, 284, 301, 326, linear stochastic equations, economic education, 390–8 328, 333, 391 estimating, 115–16 current status, 393–4 Southern Expedition (1992), macroeconomic analysis, curriculum choice, 394–5 131, 238, 399 142, 144, 156 introduction of modern Dernberger, Robert, 392 township and village economics, 391–3 deterministic trends, 275 enterprises, subject of economics, economic fluctuations, 114, measurement, 291–2 lessons for 115 Economic and Trade understanding, 405–6 macroeconomic analysis, Commission, teaching of economics, 144, 145, 149, 150 Shandong, 67 improving, 395–6

0002253572.indd 429 12/3/2014 4:03:27 AM 430 Index

economic fluctuations lessons from studying emperors, Chinese, 4, 6, 9, 14 econometric models, 122 Chinese economy, 405, energy linear stochastic equations, 406, 416, 419, 420, clean and renewable, 115–16 422, 423 development, 184–5 multiplier-accelerator nonstate sectors, 287, conservation, 182–3 model, 110–13 289, 295 consumption, 180 of Chinese economy, and reform, 44, 53, 56, 58, solar energy, 185 estimating, 116–20 61, 65, 69, 75, 78, 80, see also environmental dynamic properties, 85, 86 policies; environmental 113–15 economic planning see problems, China stability, 131, 316, 374, 378 planned economy; Energy Conservation Law, vector autoregression planning China, 186 (VAR), 100, 120–1 Economic Planning Engel’s law, 165, 167 see also neoclassical growth Commission, State Engle, Robert, 100, 134 model Council of China, 25 Entering the 21st Century economic freedom, 12 economic reform see reforms (World Bank), 107 economic growth economic responsibility enterprises accumulation, 93, 96 system, 46 reform, 66–8 and agriculture, 53–4 economic transformation, see also collective data on output, capital and study of, 414, 417 enterprises; foreign- labor, 93–4, 95–6, 97 economic zones, 50, 51, 83, owned enterprises; entrepreneurs, role in 327, 329, 334 state-owned Chinese economic Economics Commission, 37 enterprises; township growth, 297–9 economics profession, 397–8 and village enterprises forecasting, 104–6, 108 Economy, Elizabeth, 187 (TVEs); individual- neoclassical growth model, education owned enterprises 91–2 and Cultural Revolution, 24 entrepreneurship, 296 use to forecast GDP, demand for, 398–403 role of entrepreneurs in 104–6 assumption A, 399–400 Chinese economic production function, assumption B, 400–3 growth, 297–9 estimating, 99–102, economic, 390–8 Environmental Kuznets 103, 104 measuring rates of return to, Curve, 188 regression analysis, 98–9 222–4 environmental policies size of Chinese economy in policy, 387–90 air pollution, regulation, 2020, 107 student enrollment by level 189–91 and Taiwan, 55–6 of school, 218 energy saving, 182–3 economic infrastructure see system prior to 1949, 385–6 environmental protection, infrastructure system after 1949, 387 181–2 economic instability see in United States, 373 implementation and law economic fluctuations Eijffinger, Sylvester C., 240 enforcement, 185–7 economic institutions, 125, elasticity of demand, 166, 319 laws and agencies for 263, 372, 390 expenditure, 168, 171, 173 environmental banking and financial income, 167, 176, 400 protection, 181–2 sector, 250, 251 price, 401 regulation and economic and Chinese history, 4, 12, elections, 78, 79, 80, 369, 382, incentives, 183–4 13, 20 383, 416 environmental problems, economic fluctuations, electricity generation, 185 carbon dioxide 117, 120 emigration see migration emission, 191

0002253572.indd 430 12/3/2014 4:03:28 AM Index 431

environmental problems, statistics, 301, 302, 303 Financial and Economic China see also foreign trade; Commission, air pollution, 179, 189–91 imports Administrative carbon dioxide emission, externalities, 179, 183 Council, 33 178, 179, 181, 184 financial crisis, Asia see Asian energy consumption, 180 factories, in a planned financial crisis industrial pollution, 187–8 economy, 26 financial sector see banking water pollution, 179–80 inefficiencies, 31–2 and financial sector Environmental Protection Law factors of production, 25, 101, First Lathe Factory of Beijing, for Trial 209, 306 265, 266, 267, 268 Implementation family planning, 195, 198, planning and operations, (1979), 181 199, 200, 201, 202 269–72, 273, 274 Environmental Protection Family Planning Office, 38 Second Bureau of the First Ministry (EPM), 190 family policy (one-child), 104, Ministry of Machine Epstein, Joel, 247 106, 199, 201, 203, Building, 269, 270, 271 error-correction equations, 134 204, 205, 207, 372 fiscal policy, 126, 139–40 Essay on the Principle of family size, 14, 168, 171 Five Year Plans, 40, 126, 184 Population, An family values, 6 First Five Year Plan (Malthus), 194 famine, 23 (1953–7), 22, 33, ethics, 5–6, 15 Farmer Professional 36–7, 266 etiquette, 5 Associations, 82 and legal system, 376–8, exchange rate see foreign farming, 11, 23, 26 379, 380 exchange rate behavior of Chinese farm see also planned economy/ Executive Council, People’s workers, 30–1, 419 centrally planned Bank, 236, 240, 242 farm economy, 11, 26 economy; planning expansionism, 15 farmers’ rights, 83–4 fluctuations see economic exploration, 9, 16, 323 incomes of farmers, 45, 82, fluctuations export-processing zones, 317 236, 322, 347, 402 food supply, 49, 194, 204 exports, 72, 76, 77, 81, 93, 94, private, 54 footwear, trade in, 306 204, 293, 422 see also agriculture forecasts economic fluctuations, FDI (foreign direct Chinese economy, 111, 113 investment) 104–6, 108 and economic reform, 50, and Asian financial crisis, lessons, 108, 418–23 53, 54, 60 72–3 reduced-form equations, 119 environmental problems, China’s utilization of foreign exchange rates, 182, 183 foreign capital, 330 determination, 309–14 exchange rates, countries/regions of origin, foreign invested enterprises determination, 331 (FIEs), 332, 333 310, 313 forms, 329–31 foreign investment, 326–44 foreign investment, 327, items to be encouraged in, attractiveness of China for, 329, 334, 338, 341 333–4 338–9 foreign trade policy, 315, in services, 334 corruption, 326, 336, 337–8 316, 317, 318, 319, state of in 2002, 329–33 foreign direct investment 320, 322 see also foreign see FDI (foreign direct free trade, trading patterns, investment investment) 306, 307, 309 female: male ratio, 200, 201, historical developments, macroeconomic analysis, 202, 204 328–9 125, 140 Final State Budget (1979), 35 historical perspective, 7

0002253572.indd 431 12/3/2014 4:03:28 AM 432 Index

foreign investment (cont’d ) foreign-owned enterprises, 77, Fusun, Wang, 391 industrial structure, 332 286, 329, 330, 331, 363 industrial value added, 332–3 fortune-telling, 4 Gang of Four, 24 interim regulations and “four modernizations,” 23, 43 Gang Yi, 397 Industrial “Four Tigers” (Taiwan, Hong Gaussian distribution, 98 Catalogue, 333 Kong, Singapore and GDP see gross domestic investment and economic South Korea), 44 product (GDP) expansion abroad, free trade general equilibrium, 122 341–3 Heckscher–Ohlin theory of General Theory of opportunities and problems trade, 304–9 Employment, Interest for foreign investors, Ricardian theory of and Money (Keynes), 334–8 comparative advantage, 111, 126 cooperation with Chinese 303–4 geography of China, 61–2 state-owned trading patterns, 303–9 Germany, 216 enterprises, 337 freedom, 52, 53, 130, 173, 204, globalization, 284, 327, 342 corruption and related 211, 215, 250, 261, economic, 7, 341, 343 problems, 337–8 386, 393, 412, 413 Goldfeld, Stephen M., 275 finding right partners, 335 basic, 369 Gordon, Myron, 256 imperfect legal system, and Chinese history, 6, 12, Gordon, Roger, 136 dealing with, 335–6 14, 16 governance, 67, 280, 360, 395, technology transfer to of choice, 22, 229, 294, 363 406, 408, 409 China, 336–7 degrees of, 261, 421 government regional distribution, 331–2 of discourse, 403 budget see budgets/budget regulation policies, 333–4 economic, 12, 25, 289, 295, constraints role, 326–8 363, 421 decision processes, 382–4 tax contribution to economy, of expression, 22, 80, 386 economic growth, 105–6 332–3 of farmers, 81 economic role, 372–5 technology, 327, 332, 333, individual, 6, 413 financial system, role in 334, 336–7, 339, of inquiry, 403 reforming, 249–51 342, 343 nonstate sectors, 289, 290, form of, 406 foreign trade, 301–25, 302 293, 294, 295 and human capital, 215–16 economic reform, 50–1, 72–4 political, 342 intervention by, 263 exchange rates, of private enterprise, 86 levels of, 39 determination, 309–14 of speech, 369 monetary policy, 127–8 free trade, trading patterns, of travel, 22, 363, 390, 398 provincial governments, 303–9 free-market economy, 39, 40 policy, 314–22 characteristics, 292–5 and Republic of China problems implementing see also market economy revenue and expenditure, policies in early 1980s, Friedman, Milton, 111, 112, 136, 137, 138 318–22 121, 126, 127, 132 and study of Chinese protectionism in United Frisch, Ragner, 114, 115 economy, 417–18 States, 322–3 fuel consumption, 165, 166, government bureaucracy, statistics, 301, 302, 303 167, 168, 173, 47, 282, 289, 298, technology, 304, 305, 306, 183, 184 338, 381 309, 316, 321, 324 Full Employment Act (1945), lessons from studying Foreign Trade Law (2004), 340 US, 126 Chinese economy, 407, foreign-exchange certificates, fund management joint 409–10, 418 311, 312 ventures, 74, 247 gradualism, 57, 61

0002253572.indd 432 12/3/2014 4:03:28 AM Index 433

grain, production of, 31 growth see economic growth summary of lessons, 15–16 Granger, C. W. J., 100, 134 Guangdong International Trust Hong Kong, 22, 50, 221, Great Depression, 21, 111, and Investment 355, 359 126, 414 Corporation (GITIC), and Asian financial crisis, Great Leap Forward (1958–61), 245, 250 72, 73 23, 35, 199 guanxi (social networking), banking and financial adjustment following 335–6, 355, 371, 372, sector, 242, 246 (1962–5), 23, 25 410, 411 Basic Law, 415 and corruption, 362 British rule, 415 economic fluctuations, 119 Hall, Robert E., 116, 117 and China, 382–3, 384 economic growth, 93, 94 Han, Jun, 84 colonial period, 294, 382 effects, 151–2, 153, Han dynasty (206 bc to 220 and economic reform, 58, 156–7, 157 ad), 5, 6–7, 11, 293 59, 60, 67, 74 human capital, 217 Han people, Chinese economy, 292, 293 macroeconomic analysis, perceived as, 7 foreign investment, 328, 125, 142, 143, 146 Hang Seng Stock Price Index, 329, 331, 342 measuring effects of, 150, 257, 260 foreign trade, 311, 320 151–2 Hart, Oliver, 408 and legal system, 375, 377, nonstate sectors, 298 health services, 224–7 381, 382, 383, 384 state-owned enterprises, Heckscher–Ohlin theory of and lessons from studying 268, 270 trade, 304–9 Chinese economy, 406, Great Wall of China, 6, 8, 27 Hicks, J. R., 212 410, 413, 415, 417, Griffin, Keith, 23 higher education see 418, 422 gross domestic product universities and and nonstate sectors, 292, (GDP) colleges 293, 294, 296, 298 banking and financial highways, 12, 139, 334, “one country, two systems” sector, 235 381, 422 principle, 382 economic fluctuations, historical background as one of “Four Tigers,” 44 111, 118 from 1942 to 1952 (peaceful return to China (1997), 10 economic growth, 91, 92, transition), 22 and Shanghai stock market, 93, 97, 102, 103 from 1953 to 1957 (First 261, 262, 263 economic reform, 54, Five Year Plan), 22, 33, Hong Kong Stock Exchange, 75, 77 36–7, 266 253, 254, 260, foreign investment, 338 from 1958 to 1961 (Great 262, 293 foreign trade, 317 Leap Forward) see Hang Seng Index, 257, 260 and legal system, 380 Great Leap Forward Hong Kong University of macroeconomic analysis, (1958–61) Science and 129, 136 from 1966 to 1976 (Cultural Technology, 375 neoclassical growth model Revolution) see honor, personal, 5–6 used to forecast, 104–6 Cultural Revolution household responsibility real, 91, 92, 97, 105, 118, (1966–76) system, 45, 419 129, 204 from 1976 to 1978, 24 housing gross national product (GNP), economic lessons, 3–19 bureaus, 353 107, 287, 323 foreign investment, 328–9 consumption in rural and Grossman, Gene M., 188 major dynasties, 4–10, 11, urban areas, 173–5 groundwater, pollution, 14, 15, 16 public housing, 374 179–80 planned economy see Houthakker, H. S., 165, 168, Groves, Theodor, 408 planned economy 170, 171, 176

0002253572.indd 433 12/3/2014 4:03:28 AM 434 Index

How the Farmers Changed foreign exchange rates, industrial pollution see air China (Zhou), 45 determination, 312, 313 pollution Hsiao, Cheng, 391 foreign investment, 327, Industrial Revolution, 181, Hsiao, William, 226 334, 339, 341 337, 411 Hu Jintao, 184 foreign trade policy, 315, infectious disease, 225 Hu Yaobang, 57, 58 316, 317, 318, 319, inflation, 14, 54–5 Hua Guofeng, 24 320, 322 banking and financial Huang, Jikun, 81 free trade, trading patterns, sector, 237, 238 Huang Da, 392 306, 307 Great Depression, 21, Huangpo Military Academy, 11 statistics, 301, 302, 303 111, 126 Hubilie (founder of Yuan see also exports; foreign macroeconomic analysis, dynasty), 8 trade 126, 129, 130, 131, human capital, 155 inaction, 5 133, 134, 143 abundance, 418 incentives United States, 312–13 defined, 5 agriculture, 45, 54 infrastructure and economic reform, 59, 60 banking and financial building, 373, 422 health services, 224–7 sector, 235 and Chinese history, 12 importance, 209–10 commune system, 31 foreign investment, 334 investment in, 216–17, 218, environmental protection, institutional, 52, 60 219–22 183–4, 190 large projects, 28 labor supply and demand, management, 280 natural gas and 210–16 market, 406 methane, 184 measurement, 210 in planned economy, 25, 28 see also construction poor investment in, 353 income, national see national projects role in economic income inputs, 102, 195, 196, 270, 291 development, 194–6 income effect, 186, 206, aggregate, 93 see also education; labor 399, 400 balancing, 33 human rights, 327, 413, income tax, 137, 294, 338, 383 capital, 324 414, 415 incomes, 62, 81, 203, 206, 220 economic fluctuations, Hundred Flowers campaign consumption, 171, 174, 175 110, 119 (1957), 6, 22, 369 economic fluctuations, 111, farm, 31 hyperinflation, 14, 54 112, 116, 117 free trade, trading patterns, of farmers, 45, 82, 226, 322, 304, 305, 306, Ianchovichina, Elena, 322 347, 402 307, 308 Ichimura, Schinichi, 122 in planned economy, 26, 27, labor, 91, 92, 290 immigration see migration 29, 30 marginal, 277 imperial rule/imperialism, 9, indifference curve analysis, material, 45, 269, 275, 276, 21, 367 30, 32 277, 278, 279, 354 and economic reform, 77, 78 individualism, 6, 413 measuring, 98, 275 Import and Export Bank, individual-owned enterprises, output planning, 32, 35 69, 242 52, 66 in planned economy, 25, 26, imports, 39, 140, 204, 293, 311 Indonesia, 58, 71 27, 29 economic fluctuations, Industrial and Commercial prices, 48, 49 111, 122 Bank of China, 50, reforms, 45, 48 and economic growth, 93, 94 69, 284 see also output and economic reform, 50, Industrial Catalogue, 333 institutional factors, 53, 55, 72, 74, 75, 77, industrial development, 35, infrastructure, 52 80, 81 242, 243 institutional inertia, 420

0002253572.indd 434 12/3/2014 4:03:28 AM Index 435

insurance, 373–4 fund management, 74, 247 Law on Chinese-Foreign insurance companies, 12, Jorgenson, Dale, 397 Equity Joint Ventures 248–9 Journal of Comparative (1979), 328 interest rates, 47, 87, 122, 130, Economics, 24 Law on the People’s Bank 132, 237, 241, 244, (1995), 50, 234, 235, 288, 360 Kamstra, Mark, 256 240, 241, 248 high, 235 Kaohsiung Export Processing Law on the Prevention and low, 174 Zone, 317 Control of Air nominal, 131, 242 Keynes, John Maynard, 111, Pollution (2002), 182 Intergovernmental Panel on 112, 126, 139, 143 learning see scholarship Climate Change, Klein, Lawrence, 122, 391, leasing system see Bangkok, 181 392, 397 responsibility system Interim Procedures on Koopmans, T. C., 304 least-squares method, 98, 99, Establishing Pilot Korea, 9, 44 149, 167, 256, 261 Sino-Foreign Joint Kornai, Janos, 29, 275 two-stage least squares Venture Wholesale Krueger, Alan B., 188 method (2SLS), Business (1996), 334 Kuo, Shirley W. Y., 54 110, 116 Interim Procedures on the Kuomintang (Nationalist legal system, 366–84 Joint Venture Travel Party), 11, 21, 367, 416 prior to 1949, 366–8 Agent (1998), 334 Kuznets, Simon, 188 since 1949, 368–71 Internet, 79, 322, 378, 389, 422 Kwan, Y. K., 24, 143, 146, government, economic role, investment 149, 157, 254, 372–5 defined, 92 260, 263 imperfect, 335–6 economic reform, 50–1, 72–4 Kyoto Protocol, 181, 184 and moral system, 410–12 foreign investors, 247–8 non-Western, 410 in human capital, 216–17, labor and personal honor, 5 218, 219–22 data on, 93–4, 95–6, 97 role in a market economy, irrigation, 31 economic growth, 97, 104 371–2 farm workers, behavior, legislation and regulation Jackson, Andrew, 415–16 30–1 air pollution, 189–91 Japan, 216, 320, 327 foreign trade, 321–2 environmental protection, and Chinese history, 9, 11, 12 historical dynasties, 8, 15 183–4 Jefferson, Gary H., 240, 291 industrial workers, 31 foreign investment, 333–4 Ji Hua, 217 misuse, 348–9 Leibenstein, Harvey, 275 Jiang Zemin, 24, 48, 57, 66, mobility restriction, 352–3 “Letting One Hundred Flowers 67, 73, 207, 296, 398 productivity of, 287 Bloom” campaign job creation, 216 supply and demand, 210–16 (1957), 6, 22, 369 job outsourcing, 322 welfare, 280 levies, 186, 187, 188 job security (”iron rice bowl”), Labor Bureau, 31, 211 illegal, 84, 361 67, 352, 395 labor participation, 163, 211 Levinson, Arik, 189 Johnson, D. Gale, 201, 392 labor policy, 214, 215 Lewis, W. Arthur, 195 Johnson, Emily, 223 Lagrange expressions, Li, Jie, 188 joint stock cooperatives, 66, 290 189–90 Li, K. T., 54 joint ventures, 54, 68, 72, 241, land reform, 22, 45 Li Jinwen, 397 266, 286, 287, 317, language, written, 5, 6 Li Kaixin, 33, 34 397, 408, 419 Latin America, 331 Li Keqiang, 87 foreign investment, 329, Lau, Lawrence, 391, 392, 397 Li Peng, 182, 283, 370 337, 339 Law of Direct Sale, 340 Li Shantong, 76–7

0002253572.indd 435 12/3/2014 4:03:28 AM 436 Index

Li Yuanhong, 367 total factor productivity, versus centrally planned Liang Shiyi, 289 143, 144, 145, 146, economy, 25, 26–7, 28, Liang Yansun, 10, 251, 375, 407 147, 149, 150, 153 57 liberalization, 53, 59 see also economic Chinese, characteristics, Lieberthal, Kenneth, 187 fluctuations; economic 295–6 likelihood function, 149 growth and Chinese history, 5, 7, 8, Lin, Anloh, 94, 101 macroeconomic policies, 422 11, 12, 15 Lin, Jonathan, 254, 260, 263 fiscal policy, 126, 139–40 and economic reform, 57 Lin, Justin Yifu, 54 government revenue and legal system, role in, Lin, Man-huang, 16 expenditure, 136, 371–2 Lincoln, Abraham, 416 137, 138 planning, role in China’s Gettysburg Address, 14, 367 monetary policy, 126, market economy, linear stochastic equations, 127–33 376–82 econometric method maintenance of assets, 351 shortcomings, 86 for estimating, 115–16 Malaysia, 58, 71 see also free-market Lingnan University, male:female ratio, 200, 201, economy; planned Guangzhou, 386 202, 204 economy liquidity trap, 132 Malthus, Thomas R., 194, 195 market incentives, 406 Litigation Law, 370 managers, 22, 47, 48, 66, 68, markets, rural areas, 46 Liu, T. C., 53 71, 76, 244, 356, 360, marriage age, 202, 206 Liu Shaoqi, 23, 217 361, 418, 420 Martin, Will, 322 loans, non-performing, 69, 70 asset, 354, 355 material balancing, 33, 35, 39 log productivity, 153 bank, 69, 130, 234, 235 maximization problems, 145, Londregan, John, 416–17 bureaucratic, 408 189, 276, 358, 414 Long March (1933), 11, 21 enterprise, 28, 40, 67, 85, maximum likelihood method, 240, 274–5, 284, 359, 149, 153, 156 Ma Hong, 266 363, 364, 410 McMillan, John, 352 Ma Yin–Chu, 195 and legal system, 369, 374 Meiselman, David, 127 Machinery and Electric Manchuria, 9, 11 Menzies, Gavin, 9 Bureau of Beijing, Mankiw, Gregory, 101 mercury, 179 270, 272 Mao Zedong, 15, 22, 45, 146 middlemen, 7 macroeconomic analysis as Chairman of Communist migration, 9, 221–2 acceleration principle, Party, 6, 23 restriction of labor mobility, 112–13, 114, 115, Cultural Revolution, 6, 24 352–3 117, 118 death (1976), 24, 44 Mincer, Jacob/Mincer dynamic optimization Great Leap Forward, equation, 223 model, 142–5 23, 93 Ming dynasty (1415), 9 solution of problem, 145–8 on population, 194–5 Ming Zhu, 397 inflation, 126, 129, 130, unification of China (1949), Ministry of Education, 52, 131, 133, 134, 135, 6, 14 299, 396, 422 136, 143 marginal product of labor, and legal system, 369–70 planning, 240 31, 195 Ministry of Finance, 40 policies see macroeconomic marginal productivity theory Ministry of Foreign Trade, policies of demand, 214, 215 316, 333 political events, effects of, marginal propensity to misuse 150, 153–6 consume, 111 of assets, 349, 351, 362, statistical estimation, market economy 363, 364, 407, 413 149–50 agriculture, 45 of bank funds, 240

0002253572.indd 436 12/3/2014 4:03:28 AM Index 437

of labor, 348–9 national income, 50, 54, 56, relative growth, 286–7 of land, 31, 349, 358–9 126, 144, 194, 195, state-owned enterprises, of power, 84, 348, 358 216, 221, 235, 279, 400 econometric of resources, 33, 243 economic fluctuations, 110, measurement of misuse of assets see asset 111, 112, 113, 114, 116 relative efficiency, misuse and economic growth, 93, 291–2 monetarism, 127 94, 96, 100, 101 see also state-owned monetary policy, 126, foreign trade, 314, 315 enterprises; township 127–33 National Natural Science and village enterprises banking and financial Foundation, 389 (TVEs) sector, 236, 238, 239 National People’s Congress, North Korea, 44 monetary shocks, 120 35, 37, 186, 200, 315, money, quantity theory, 126, 415, 416 Ohlin, B., 304 127, 133 and banking sector, oil consumption, 180–1 money supply, 58, 121, 380, 234, 236 old-age insurance 410, 422 and economic reform, 46, system, 228 banking and financial 50, 52, 69, 77, 78 one-child family policy, sector, 236, 237, 238, and legal system, 368, 369, 104, 106, 199, 201, 239, 241, 242, 243 370, 372, 376, 382 203, 204, 205, foreign trade, 313, 317 nationalism, 10, 13, 14, 16, 86, 207, 372 macroeconomic analysis, 367, 413 one-party system, 298, 406, 127, 128, 129, 130, Nationalist Party 415–17, 423 131, 132, 133, 134 (Kuomintang), 11, 21, Open Market Committee, Mongolian Empire, 8–9, 15 367, 416 Federal Reserve, 146 monopolies, 372 natural gas, 184 open-door policy, 50, 59, 131, moral system, 410–12 NDRC see National 284, 301, 391 see also Confucius/ Development and foreign investment, 326, Confucianism Reform Commission 328, 333 multiplier-accelerator model, (NDRC) Opium War (1840), 10, 15, 16, 110–13, 143 Neary, J. P., 30 328 of Chinese economy, neoclassical growth model, optimization model, 142–5 estimating, 116–20 91–2, 111 outflow of direct investment dynamic properties, use to forecast GDP, 104–6 (ODI), 341, 342 113–15 New Deal, 126, 414 output endogenous variables, New Taiwan (NT) dollar, 55 aggregate see aggregate 113, 114 New York Stock Exchange, output explanatory variables, 119 253, 254, 262 agricultural, 45, 46 predetermined variables, Dow Jones Index, 257, 260 data on, 93–4, 95–6, 97 113, 116 New York Times, 77, 87, 342 national, 3 municipalities, 39, 62, 266 Niu, L., 175 quotas, 25–6, 45 nonlinear regression, 258, targets, 23, 31, 32 Nash equilibrium, 417 260, 261 see also inputs National Conference on nonstate sectors, 286–300 output planning, 31 Financial Work, 249 economic reform, 51, 52 theory and practice, National Development and free-market economy, 32–7 Reform Commission characteristics, 292–5 overseas-funded enterprises (NDRC), 379, 382 private enterprises prior to see foreign-owned National Economic Plans, 35 1949, 287–8 enterprises

0002253572.indd 437 12/3/2014 4:03:28 AM 438 Index

paper money, 14–15 People’s Republic of China organization under parameter estimation, 136, (PRC), 127, 236, 253, central planning, 173, 189, 278, 279 359, 376, 407 265–6, 267, 268–9 economic fluctuations, 110, abuse of power, 84 simple model, under 114, 115, 118 and economic reform, 54, central planning, 274–7 economic growth, 91, 92, 56, 86 planning 98, 99, 105, 106, 108 and foreign investment, 328 central planning, state- macroeconomic analysis, historical perspective, 4, 9, owned enterprises, 143, 145, 147, 149, 10, 15, 16, 22, 24 265–6, 267, 268–9, 150, 155, 156 human capital, 220, 221 274–7 Shanghai stock market, 254, state-owned enterprises, 265 economic, administration 255, 256, 258, 260, township and village of, 37–40 261, 262 enterprises, 288 execution of plan, 380–1 Pareto optimality, 174, Perkins, Dwight, 392 of large-scale enterprise, 175, 203 permanent income hypothesis, 269–72, 273, 274 patents, 336, 337, 412 111, 116, 117 macroeconomic analysis, 240 patriotism, 28 Phillips, Almarin, 412 methods, 380–1 Peng Shige, 397 pirating, 77, 336, 337 output planning, 31, 32–7 People’s Bank, 40, 235–7, planned economy/centrally process, 36 248, 250, 281, 360 planned economy role in China’s market as central bank, 233, 236 army analogy, central economy, 376–82 directions for, 242–3 command, 27 administration of plan education system and behavior of economic units, formulation and policy, 387, 394, 29–32 implementation, 397, 398 capital goods, 26, 27 378–80 Executive Council, 236, central direction, 34–5 co-ordination with market 240, 242 central planning authority forces, 381–2 factors affecting functioning in, 25, 26, 27, 35 scope, 376–8 of banking system, Chinese model, 25–9 targets, 35–6 238, 239 commune system, 26, 30–1 see also Five Year Plans; foreign trade, 313, 315, 316 consumer goods, 26, 27, 28, planned economy/ leadership, 234–5 29, 35 centrally planned objectives, 235 demand and supply in, 25, economy possible weaknesses, 240–1 27, 29 political events, effects of, reforms, 68–9, 71, 242–3 distribution in, 25, 26, 28 150, 153–6 see also Law on the economic information, 28 political power, 23, 24, 37, 79, People’s Bank (1995) incentives in, 25, 28 80, 217, 288, 362, 367 People’s Bank Law, 248, 250 incomes in, 26, 27, 29, 30 political pressures, 69, 237 People’s Congress see versus market economy, 25, political system, 10, 77, 342 National People’s 26–7, 28, 57 and economic reform, 59, 61 Congress organization and and legal system, 368, People’s Construction Bank of administration of 369, 382 China, 38, 50, 69, 234 economic planning, multiparty, 415 People’s Daily, 180, 200, 37–40 and nonstate sectors, 288, 201, 203, 216, 228, output planning, 32–7 295, 296, 298, 299 282, 340 prices, 27, 28, 29, 35 one-party, 298, 406, People’s Insurance Company rationing, 26, 30 415–17, 423 of China, 248 state-owned enterprises of United States, 367

0002253572.indd 438 12/3/2014 4:03:28 AM Index 439

pollution productive efficiency see total rate of exchange see foreign air, 179, 187–91 factor productivity exchange rate polluter pays principle, 183 (TFP) rational expectation water, 179–80, 187 profit incentives, 28, 279 hypothesis, 117, 257 population in China, 3, Project LINK, 397 rationing/ration coupons, 194–208 Projected State Budget 26, 30 policies, 199–203 (1981), 35 Rawski, T., 240, 291 evaluation, 203–5 prospects for the Chinese Records of the Historian (Sima why population control economy, economic Qian), 6 policy should be reform, 85–7 Red Army, Chinese, 58 terminated, 207 protectionism, in United Red Book (Mao), 24 rate of growth, 196, 197, States, 322–3 Red Guard, 24 198–9 provinces/provincial Red Star over China role in economic governments, 39, 40, (Snow), 21 development, 194–6 61, 62 reduced-form equations, 110, poverty, rural areas, 82–4 psychic incomes, 220 114, 115, 116, 118, presidency of China, 10 public ownership, extensive, 119, 140, 143, 147, prices 408–10 150, 175 in planned economy, 27, 28, purchasing power, 73, 164, Rees, Albert, 213 29, 35 204, 310, 313, 318, 319 reforms reform, 45, 48–9 purchasing power parity in 1978, 43–64 setting of, 28, 29 (PPP), 107, 204, 309, from 1990s to 2010s, 65–88 two-tier system, 45, 48, 49 310, 312, 314 agriculture, 45–6, 81–2 principles of the people, 13, 367 Putterman, Louis, 352 banking, 68–72 private ownership, 406 commencement, in 1978, private sector, 51, 66, 72, 82, 174, Qin dynasty (200 bc), 6 43–5 286, 362, 375, 381, 410 Qing dynasty (1760–1911), and corruption, 359–62 privatization, 46, 47, 248, 360, 9–10, 14, 16, 289, Cultural Revolution 362, 390 386, 407 (1966–76), 43–4, 46 agricultural, 53, 83, 85, 227 Qingming (Sweeping of the enterprises, 66–8 enterprises, 61, 68, 85 Graves) Festival, 8 foreign trade and investment partial, 290 Qualified Foreign Institutional Asian financial crisis, procurement agencies, 30 Investors (QFII), 72–4 producer goods, 28, 39, 355 247, 248 reforms to mid-1990s, output planning, 33, 34, 35 Quandt, Richard E., 275 50–1 see also consumer goods quantity theory of money, 126, industrial, 46 production 127, 133 inevitability, in 1978, 44, 57 factors of, 25, 101, 209, 306 quotas land, 22, 45 in planned economy, 25, 26, credit, 69, 130, 131, 132, prices, 45, 48–9 27, 28, 31, 32 237, 239, 242 reasons for success in targets, 31, 32, 35 delivery, 45 China, 56–9 production functions, output, 25–6, 45 and rural poverty, 82–4 economic growth, production, 27 state-owned enterprises, 44, 99–102, 103, 104 46–8, 277–80 production-transformation random residuals, 114, 115 Taiwan, compared to China, curve (possibility random shock, 147 53–6 frontier), 32, 36 random-walk process, WTO membership, impact, foreign trade, 304, 305, 307 143, 144 74–81

0002253572.indd 439 12/3/2014 4:03:28 AM 440 Index

regression analysis, 149, 167 small nonagricultural and economic reform, 68, economic growth, 98–9 enterprises, 356 74, 75 human capital, 222–3 state-owned enterprises, foreign investment, 334, 341 nonlinear regression, 258, 44–5, 357–8 health services, 224–7 260, 261 retail price index, 133, 258 in planned economy, 27 see also least-squares retail sector, 334 poor quality of services, method Ricardian theory of 353–4 regulation see legislation and comparative advantage, Shang dynasty (1900 bc), regulation 303–4, 322–3 4–5, 15 Remer, C. F., 328 river pollution, 180 Shanghai stock market, 12, remuneration see incentives; road construction, 31 245, 246, 253, 421 wage rates Roberts, K. W., 30 comparison with findings renminbi (RMB), 341 Romer, David, 101 for Hong Kong and and economic reform, 55, Roosevelt, Franklin, 126 New York, 262 69, 73 Roselle, Scott, 81 logarithm of stock prices, foreign trade, 310, 311, rural areas 254–5 312, 313, 314, 316, consumption, 166, 172, model of stock price 317–18, 319 173–5 determination, 254–7 macroeconomic analysis, housing consumption, price determination, 253–64 127, 133 173–5 Stock Exchange, empirical rent seeking, 351, 354 markets, 46 findings, 257–8, 259, Republic of China (1911 poverty, 82–4 260–2 onwards) see also agriculture share trading, 67 historical perspective, 4, Russia, 70, 203 see also stock markets; 10–15, 16 see also Soviet Union, stock price and legal system, 367, 368 former determination on Taiwan, 9 Shen, Yan, 120, 121, 126, 387, research, 117, 165, 219, 266, Samuelson, Paul A., 114, 115, 389, 399, 401 299, 360, 375, 405, 143, 323 Shenzhen economic zone, 409, 411, 416 savings, 25 50–1, 57 education system and scholarship, 9, 15, 338, 385, Shenzhen stock market, 245, policy, 389, 390, 391, 386, 403 246, 248, 358, 421 392, 393, 395, 397, schooling see education Shi Jinping, 364 398, 403 Schultz, T. W., 210 Shiller, Robert, 256, 257 Shanghai stock market, science, 8, 10, 15, 23, 43, 165, shipping, 9, 10, 407 253, 254 414, 418, 422 shock therapy, 125 responsibility system, 355–8, education system and Silk Route, 7 361 policy, 386, 389, 391, Sima Qian, 7, 27, 293 agriculture, 355–6 392, 395, 397, 403 Simon, Herbert, 392 asset management, 355–8 and legal system, 375, 376 Sims, C. A., 121 contract, 44, 48, 241, 263, Second World War, 11, simultaneous equation model, 280, 357, 358, 14, 386 143, 147, 397 361, 363 self-interest, 6, 7 simultaneous equations, 110, economic, 46 Serbia, bombing of Chinese 114, 115, 118, 120, 122 and economic reform, 45, embassy (1999), 10 Singapore, 414 46, 56 service sector/services Sino-Japanese War, 9, 11, household, 45, 419 asset services, supply of, 368, 386 larger enterprises, part, 356–7 350–1 Smith, Adam, 7, 211, 293, 413

0002253572.indd 440 12/3/2014 4:03:28 AM Index 441

Snow, Edgar, 21 State Commission for output planning, 33–4 social infrastructure, 297, Restructuring the planning and operations of a 373, 378 Economic System see large-scale enterprise social networking (guanxi), Commission for see First Lathe Factory 335–6, 355, 371, 372, Restructuring the of Beijing, 273, 274 410, 411 Economic System reform, 44, 46–8, 277–80 social order, 5, 6 State Council of China, 26, 34, responsibility system, 44–5, social welfare, 228–9 35, 37 357–8 socialist market economy, 28, Center for Social and restructuring, in late 1990s, 50, 59, 86, 234, 253, Economic 280–3 295, 395, 414, 416 Development, 397 simple models, 274–80 and asset management, Economic Planning types, 66 347, 363 Commission, 25 see also under managers soft budget restraints, 275, 289 ministries, 38, 40 Statistical Yearbook of China solar energy, 185 Price Commission, 27 consumption, 162, 163, 167, Solow, Robert, 91, 146 State Development Bank, 69, 242 171, 173 Solow residual, 155, 210 State Development Planning economic growth, 93 Song dynasty (960–1126), Commission, 40, 333 economic reform, 51, 54, 8, 371 State Economic and Trade 55, 56, 59 Song Jian, 202 Commission, 40, 67, education policy, 387, 388 soot, 179 281, 333 foreign trade, 315 South Korea, 44, 186, 415 State Education Commission, human capital, 225 Soviet Union, former, 33, 222, 392 macroeconomic analysis, 144 60, 195, 353, 372, State Environmental population, 196, 198, 202 387, 393 Protection state-owned enterprises, 266 and Chinese Communist Administration stochastic equations/trends, Party, 20–1 (SEPA), 182 115–16, 144, 149 “Spring and Autumn” period, State Planning Commission, Stock Exchange Regulation Zhou dynasty, 5, 6 33, 37, 378, 379 Commission, 263 stability/instability organization and stock markets, 245–8 economic see economic administration of foreign investors, 247–8 fluctuations economic planning, Su, Vincent, 391 financial, 244, 249 39–40 sulfur dioxide, 179, 183 political, 6, 11, 12, 16, 57, State Scientific and Sun Yat-sen, 10, 11, 13, 14, 58, 59, 60, 78, 79, 80, Technological 21, 367, 416 282, 287, 288, 322, Commission, 38 supply 368, 403, 406, 413, state-owned enterprises, 265–85 asset services, 350–1 421 behavior, 265–85 and demand see demand prices, 55, 60, 127, 132, central planning, 265–6, and supply 237, 374, 380 267, 268–9, 274–7 housing consumption, 175–6 social, 76, 80, 281, 421 cooperation of foreign Survey of the First Lathe standard error of estimate, investors with, 337 Factory of Beijing, 266 119, 134, 149, 167, current state of in China, 223, 224, 258, 283–4 Taiwan, 9 261, 292 efficiency, factors affecting, compared to China, 53–6, and economic growth, 98, 66–7 101 99, 100 organization under central economic reform, 53–4 state banks, 68, 69, 71, 288 planning, 268–9 government, 417

0002253572.indd 441 12/3/2014 4:03:28 AM 442 Index

Tang dynasty (618–907 ad), Three Gorges Project, 28, 185, transportation, 59, 83, 101, 7, 15 380, 381 287, 316, 341, 356, Tang people, Chinese “three principles of the 376 perceived as, 7 people,” 13 costs, 307, 310, 319 targets Tiananmen Square, 15, 58, 59, environmental problems, output/production, 23, 31, 86, 131, 413 179, 188 32, 35 Tibet, 165 Treaty of Nanking (1842), 10 planning, 35–6 time-series analysis, 165, 167 trust and investment tariffs, 293, 334 tortoise shells (Shang corporations, 245 agricultural, 327 dynasty), 4–5 Tsiang, S. C., 53 foreign trade, 310, 317, 320, total education fund two-stage least squares method 321, 322 (TEF), 399 (2SLS), 110, 116 low, 74, 75, 76, 77, 81, 339, total factor productivity (TFP), 341 77, 111, 210 unemployment, 215, 228, 229, teachers, 213, 348, 386, 391, economic growth, 92, 97, 281, 282, 289, 322, 392, 396, 400 98, 99, 100, 105, 106, 323, 339 qualified, 219, 393, 394, 395 108 and economic reform, 66, technology, 23, 27, 32, 43, 67, macroeconomic analysis, 68, 78, 80, 86 68, 139, 196, 203, 205, 143, 144, 145, 146, and legal system, 373, 380 214, 375, 381, 386 147, 149, 150, 153 unification of China (1949), advanced, 8, 15, 308, 323, 333 tourism, 334 6, 14 agricultural, 422 township and village United Nations Framework and economic enterprises (TVEs), 85, Commission on development, 15 215, 224, 250, 280, Climate Change, environmental problems, 281, 337, 358 181, 184 178, 184, 187 econometric measurement, United States foreign investment, 327, 291–2 banking and financial 332, 333, 334, 336–7, economic conditions for sector, 237 339, 342, 343 growth, 288–90 comparative advantage, 323 foreign trade, 304, 305, 306, and economic reform, 51, education, 373 309, 316, 321, 324 60, 61 energy consumption, 180 high-technology, 75, 307, and lessons from studying foreign trade, 304, 323 339, 381, 407 Chinese economy, 406, Great Depression, 21, 111, historical perspective, 7, 8, 407, 408, 410, 419 126, 414 10, 15 nonstate sectors, 286, 287, health services, 225–6 modern, 6, 8, 334, 389 288–90, 291–2, 296, human capital, 211, 216, new, 181, 308, 320, 327, 332 297, 299 225–6 production, 27, 308 see also village inflation, 312–13 transfer to China, 322, 323, governments national output, 3 336–7 training, 66, 68, 69, 196, 222, New Deal, 126, 414 telecommunications, 327, 341 225, 308, 327, 335 Open Market Committee, and economic reform, 74, additional, 47, 220, 349, 353 Federal Reserve, 146 75, 76, 87 banking personnel, 234, and People’s Republic of tertiary industry, 75 235, 242 China (PRC), 24 TFP see total factor centers, 392 political system of, 367 productivity (TFP) economics, 370, 392 protectionism in, 322–3 Thailand, 58 general and specific, 222 social security, 294 financial crisis, 70, 71 of mind, 5 Vietnam War, 240

0002253572.indd 442 12/3/2014 4:03:28 AM Index 443

units of measurement, 6 welfare/welfare economics, Yi Zhenqiu, 174 universities and colleges, 12 13, 280 Yin, K. Y., 53 and Cultural Revolution, 24 collective welfare, 413–15 Yiren, Rong, 245 urban areas Wen, Guanzhong James, 23 Young, Leslie, 7 housing consumption, Wen Jiabao (Premier), 182, youth, Chinese, 24 173–5 183, 185, 191 Yu, Dahai, 396 demand and supply, western China, 361 yuan, 73, 74, 86, 107, 164, 175–6 Western Development 303, 304, 312, 318, utility functions, 189, 205, 349 Strategy, 361 332 Wheeler, David, 186, 187, 188 Yuan dynasty (1279), vector autoregression (VAR), work teams, commune system, 8–9, 15 100, 120–1 30, 31, 355–6 Yuan Shih-kai, 10, 367 vessels, bronze (Shang World Bank, 107, 226, 310, dynasty), 4, 5 342, 392, 418 Zenong, Wang, 391 Vietnam, 9, 58 World Economic Forum, 339 Zhang, Peiji, 314, 315 village governments, 78, 288, world economy, China as a Zhang, Xiabo, 84 289, 358 leader, 3 Zhang Peiji, 316 see also township and World Trade Organization Zhao Renwei, 223 village enterprises (WTO), impact of Zhao Ziyang, 53, 57, 134, 174, (TVEs) Chinese membership, 312, 392, 397 74–81, 282 Zheng, J., 222 wage rates corruption, 409 Zheng, Y. X., 291 and economic reform, economic fluctuations, Zheng He, 9 67, 68 105, 122 Zhengrong, Shi, 297 human capital, 212 on foreign investment, 327, Zhenqiu, Yi, 174 in planned economy, 25, 28 334, 339–41 Zhou, Kate Xiao, 45 Wang, Hua, 186, 187, 188 written language, 5, 6 Zhou dyasty (1100 bc ), Wang, Ping, 134 Wu, Chuntao, 84, 87 5–6, 15 Wang Donglin, 216 Zhou Enlai, 11, 23, 43 Wang Fusun, 391 Xiamen University, 396 Zhu, Lijing, 352 Wang Tongsan, 397 Xian, city of, 6 Zhu Rongji (Premier), 40, 131, Warring States, period of, 6 Xu, Chenggang, 408 139, 283, 299, 384, waste, 180 Xu Dixin, 122, 391 398, 421, 422 water pollution, 179–80, 187 and banking sector, 238, Wealth of Nations (Smith), 7, Yanan, Communist rule in, 21 239, 241, 245, 249, 211, 293 Yang, Xiaokai, 396 250 Wei, Zhi, 224–5 Yao Yilin, 46 and economic reform, 57, Weil, David N., 101 Yeh, K. C., 13 68, 73, 75 Weitzman, Martin L., 408 Yen, Tzung-Ta, 316 Zhu Xi, 371

0002253572.indd 443 12/3/2014 4:03:28 AM