A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Song, Ligang (Ed.); Zhou, Yixiao (Ed.); Hurst, Luke (Ed.) Book — Published Version The Chinese economic transformation: Views from young economists China Update Series Provided in Cooperation with: ANU Press, The Australian National University Suggested Citation: Song, Ligang (Ed.); Zhou, Yixiao (Ed.); Hurst, Luke (Ed.) (2019) : The Chinese economic transformation: Views from young economists, China Update Series, ISBN 978-1-76046-312-0, ANU Press, Acton, http://dx.doi.org/10.22459/CET.2019 This Version is available at: http://hdl.handle.net/10419/206782 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. 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Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc-nd/4.0/legalcode www.econstor.eu THE CHINESE ECONOMIC TRANSFORMATION VIEWS FROM YOUNG ECONOMISTS Other titles in the China Update Book Series include: 1999 China: Twenty Years of Economic Reform 2002 China: WTO Entry and World Recession 2003 China: New Engine of World Growth 2004 China: Is Rapid Growth Sustainable? 2005 The China Boom and its Discontents 2006 China: The Turning Point in China’s Economic Development 2007 China: Linking Markets for Growth 2008 China’s Dilemma: Economic Growth, the Environment and Climate Change 2009 China’s New Place in a World of Crisis 2010 China: The Next Twenty Years of Reform and Development 2011 Rising China: Global Challenges and Opportunities 2012 Rebalancing and Sustaining Growth in China 2013 China: A New Model for Growth and Development 2014 Deepening Reform for China’s Long-Term Growth and Development 2015 China’s Domestic Transformation in a Global Context 2016 China’s New Sources of Economic Growth: Vol. 1 2017 China’s New Sources of Economic Growth: Vol. 2 2018 China’s 40 Years of Reform and Development: 1978–2018 The titles are available online at press.anu.edu.au/publications/series/china-update THE CHINESE ECONOMIC TRANSFORMATION VIEWS FROM YOUNG ECONOMISTS EDITED BY LIGANG SONG, YIXIAO ZHOU AND LUKE HURST SOCIAL SCIENCES ACADEMIC PRESS (CHINA) Published by ANU Press The Australian National University Acton ACT 2601, Australia Email: [email protected] Available to download for free at press.anu.edu.au ISBN (print): 9781760463120 ISBN (online): 9781760463137 WorldCat (print): 1103671212 WorldCat (online): 1103671205 DOI: 10.22459/CET.2019 This title is published under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0). The full licence terms are available at creativecommons.org/licenses/by-nc-nd/4.0/legalcode Cover design and layout by ANU Press This edition © 2019 ANU Press Contents Figures ........................................................vii Tables .........................................................xi Contributors ....................................................xv Acknowledgements .............................................xvii Abbreviations ..................................................xix 1. Deepening reform and opening-up for China to grow into a high-income country ........................................1 Ligang Song, Yixiao Zhou and Luke Hurst 2. China’s economic development: A perspective on capital misallocation ..19 Guiying Laura Wu 3. Chinese corporate debt and credit misallocation ...................33 Ninghua Zhong, Mi Xie and Zhikuo Liu 4. A structural investigation of the Chinese economy with a hybrid monetary policy rule .........................................69 Jiao Wang and Ran Li 5. Off-farm employment in rural China and the hukou system ............89 Yuhan Zhao, Moyu Chen and Yu Sheng 6. Nonstandard employment: Global vision and evidence from China’s urban labour market ........................................113 Yongjie Wang 7. E-commerce development in rural China ........................129 Sherry Tao Kong 8. Innovation of Chinese listed enterprises: Evaluation and policies .......143 Zhongyu Ma, Huiqing Gao, Weihua Yin and Zhichao Wen 9. The effects of financial sector opening on financial constraints in China . 163 Liqing Zhang, Yan Zhang and Zhixiao Dong 10. Financing support schemes for SMEs in China: Benefits, costs and selected policy issues ...................................193 Qin Gou and Yiping Huang 11. Modelling the economic impact of the Sino–US trade dispute: A global perspective ........................................215 Deborah H.Y. Tan and Chen Chen 12. Inequality of opportunity and gender discrimination in China’s labour income ............................................237 Jane Golley, Yixiao Zhou and Meiyan Wang 13. What types of Chinese ODI activities are most prone to political intervention? ..............................................263 Bijun Wang and Xiao He 14. The impact of Chinese state capital during the iron ore boom .........287 Luke Hurst Index .......................................................309 Figures Figure 1.1 Official real GDP growth in China, annual percentage change, 1980–2018 .................................................1 Figure 1.2 China’s share of global GDP and of emerging and developing Asia GDP, 1980–2024 (per cent). 2 Figure 1.3 Contributions to global growth (yearly average) ..................2 Figure 1.4 Value-added shares by sector in China, 1994–2016 ...............3 Figure 1.5 Research and development as a share of GDP (per cent) ...........4 Figure 1.6 Share of population aged 15–64 (percentage of total) .............5 Figure 1.7 Savings, investment and external balance in the Chinese economy, 1987–2017 .................................................5 Figure 1.8 Contributors to GDP growth in China, 2015Q3– 2019Q1 ........7 Figure 1.9 Ease of doing business rankings for China, 2019 .................8 Figure 1.10 FDI inflows and its share of total domestic investment in China (per cent). 10 Figure 3.1 Credit intensity (new credit/additional GDP) rising further .......34 Figure 3.2 Funding supply surges: increasing M2 and M2/GDP ............34 Figure 3.3 Average debt ratio of China’s unlisted industrial enterprises ........36 Figure 3.4 Short-term debt ratio of China’s unlisted industrial enterprises .....36 Figure 3.5 Long-term debt ratio of China’s unlisted industrial enterprises .....37 Figure 3.6 Debt ratio: Classified by years of existence .....................43 Figure 3.7 Debt ratio: Classified by enterprise scale ......................44 Figure 3.8 Debt ratio: Three typical industries ..........................45 Figure 3.9 Debt ratio: Classified by enterprise region .....................46 Figure 3.10 Debt ratio: Several special provinces ........................47 Figure 3.11 Debt ratio: Classified by ownership .........................48 Figure 3.12 Debt ratio: Stable and persistent enterprises grouped according to ownership ...............................................49 Figure 3.13 The opposing tendencies of debt ratios in listed and unlisted firms. 50 Figure 3.14 Operational risk: Classified by years of consecutive existence ......52 vii The Chinese Economic Transformation Figure 3.15 The proportion of tangible assets in Chinese enterprises .........53 Figure 3.16 Sales profit margin: Enterprises grouped according to ownership ...54 Figure 3.17 Size: Enterprises grouped according to ownership ..............55 Figure 3.18 Income tax rate of Chinese enterprises .......................56 Figure 3.19 Nondebt tax shields of Chinese enterprises ...................57 Figure 3.20 SOEs with heavy interest burdens ..........................61 Figure 3.21 The average debt ratio: State-owned versus private enterprises .....62 Figure 3.22 The contrast in total profit: State-owned versus private enterprises. .62 Figure A4.1 Historical decompositions of output ........................87 Figure A4.2 Historical decompositions of investment .....................88 Figure 5.1 Geographical distribution of our sample farms, 2000, 2008 and 2015 ..................................................98 Figure 5.2 Change in relative proportion of off-farm employment in China, 1981–2013 ................................................99 Figure 5.3 Part-time versus full-time off-farm employment, 1981–2013 ......99 Figure 5.4 The apparent relationship between household registration restrictions and average off-farm employment .....................100 Figure 5.5 The apparent relationship between the urban–rural income gap and average off-farm employment ..............................101 Figure 8.1 Distribution of top 500 listed enterprises for innovation