www.ebook3000.com ROUTLEDGE HANDBOOK OF THE CHINESE ECONOMY China’s rapid rise to become the world’s second largest economy has resulted in an unprecedented impact on the global system and an urgent need to understand more about the newest economic superpower. The Routledge Handbook of the Chinese Economy is an advanced-level reference guide which surveys the current economic situation in China and its integration into the global economy. An internationally renowned line-up of scholars contribute chapters on the key components of the contemporary economy and its historical foundations. Topics covered include: • the history of the Chinese economy from ancient times onwards; • economic growth and development; • population, the labor market, income distribution, and poverty; • legal, political, and financial institutions; and • foreign trade and investments. Offering a cutting-edge overview of the Chinese economy, the Handbook is an invaluable resource for academics, researchers, economists, graduate, and undergraduate students studying this ever-evolving field. Gregory C. Chow is Professor of Economics and Class of 1913 Professor of Political Economy, emeritus, at Princeton University, USA and has been on the Princeton faculty since 1970. Dwight H. Perkins is the Harold Hitchings Burbank Professor of Political Economy, emeritus, at Harvard University, USA and has been on the Harvard faculty since 1963. www.ebook3000.com In this volume, Gregory Chow and Dwight Perkins assemble a global array of authors to pro- vide a comprehensive account of China’s economic development both before and after the reform initiatives of the late 1970s. While many of the contributors focus on institutions, poli- cies and outcomes at the national level, detailed accounts by reform participants Wu Jinglian and Yi Gang along with an iconoclastic essay by Lynn White provide readers with unusual insight into the operational mechanisms of China’s political economy. Thomas G. Rawski, Professor of Economics and History, University of Pittsburgh, USA The Routledge Handbook of the Chinese Economy excels in the breadth of its contributors and topics. Professors Chow and Perkins have assembled an all-star group of authors ranging from international academic leaders to those with relevant experience within the Chinese govern- ment. Topics range from historical perspectives to current economic issues on the road to reform. Anyone interested in the Chinese economy will find this Handbook must reading. Burton G. Malkiel, Professor of Economics, Princeton University, USA Gregory Chow and Dwight Perkins, two giants in economic science, were major figures in helping to start the process of training Chinese students in modern economics in 1986 through their chairmen-ship of the US–China Committee on Economics Education and Research at the U.S. National Academy of Sciences. We must thank them again now for sharing with us some of the significant fruits of that transformational training program. The many excellent articles in this Handbook on a broad range of topics make it indispensable to the library of a China scholar. Wing Thye Woo, Professor of Economics, University of California, Davis, USA www.ebook3000.com ROUTLEDGE HANDBOOK OF THE CHINESE ECONOMY Edited by Gregory C. Chow and Dwight H. Perkins ROUTLEDGE Routledge Taylor & Francis Group LONDON AND NEW YORK www.ebook3000.com First published 2015 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2015 selection and editorial material, Gregory C. Chow and Dwight H. Perkins; individual chapters, the contributors The right of Gregory C. Chow and Dwight H. Perkins to be identified as authors of the editorial material, and of the individual authors as authors of their contributions, has been asserted by them in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice : Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Routledge handbook of the Chinese economy / edited by Gregory C. Chow and Dwight H. Perkins. pages cm Includes bibliographical references and index. 1. China–Economic conditions. 2. China–Economic policy. 3. Economic development. I. Chow, Gregory C. II. Perkins, Dwight H. (Dwight Heald) HC427.R667 2014 330.951–dc23 2014000039 ISBN: 978-0-415-64344-3 (hbk) ISBN: 978-1-315-76747-5 (ebk) Typeset in Bembo by Cenveo Publisher Services www.ebook3000.com CONTENTS List of fi gures vii List of tables x Notes on contributors xii Preface xvi List of abbreviations xviii 1 The characteristics of China’s traditional economy 1 Man-houng Lin 2 The late Qing dynasty to the early Republic of China: a period of great institutional transformation 21 Kenneth S. Chan 3 The centrally planned command economy (1949–84) 41 Dwight H. Perkins 4 China’s economic reform: processes, issues, and prospects (1978–2012) 55 Wu Jinglian and Fan Shitao 5 Economic growth and development 76 Justin Yifu Lin 6 Population in China: changes and future perspectives 90 Peng Xizhe 7 A labor market with Chinese characteristics 103 Richard B. Freeman v www.ebook3000.com Contents 8 The Chinese savings puzzles 121 Jean-Pierre Laffargue and Eden S. H. Yu 9 Macroeconomic management of the Chinese economy since the 1990s 138 Yu Yongding 10 Trends in income inequality in China since the 1950s 157 Carl Riskin 11 China’s agriculture: past failures, present successes and enabling policies 168 Jikun Huang and Scott Rozelle 12 State and non-state enterprises in China’s economic transition 182 Ligang Song 13 Foreign trade of China 208 K. C. Fung and Sarah Y. Tong 14 China’s inbound and outbound foreign direct investment 222 Yasheng Huang 15 Banking and financial institutions 235 Gang Yi and Kai Guo 16 Law and the economy in China 255 Jacques deLisle 17 Political mechanisms and corruption 280 Lynn T. White 18 Energy and environmental issues and policy in China 303 ZhongXiang Zhang 19 The future of the Chinese economy 324 David Daokui Li Index 343 vi www.ebook3000.com FIGURES 2.1 The centralization of authority 23 2.2 The tax-to-GDP ratio: China and Britain (%) 31 4.1 China’s export and import trade (1978–2010) (US$m.) 65 4.2 China’s economic growth (1990–2010) 67 4.3 Changes in the rate of China’s fixed-asset investments (2000–2011) 70 4.4 Falling consumption as a proportion of GDP (1978–2010) 71 4.5 Changes in China’s M2/GDP (2000–2012) 71 5.1 China’s share in global GDP 77 5.2 Contributions of household consumption, fixed asset formation, and net exports to GDP 82 5.3 China’s corporate, household, and government savings as percentage of GDP 83 6.1 Population dynamics in China (1949–2011) 91 6.2 Population projections 92 6.3 Changes of age structure in China (1970–2030) 93 6.4 Population age pyramid in China 94 6.5 Geographic distribution of policy fertility at the prefecture level, China (late 1990s) 95 6.6 Percentage of working age (15–59) in total population 98 6.7 China’s urbanization process (1980–2011) 99 6.8 Main flows of inter-provincial migration of China 100 7.1 Measures of inequality 105 7.2 Gini coefficients for total income 107 8.1 Ratios of sectoral savings to Chinese national disposable income 123 8.2 National and disaggregated savings rates 125 8.3 Shares of the three domestic agents in national disposable income 125 8.4 Business sector shares in national disposable income 127 8.5 Business sector shares in national disposable income 127 8.6 Business sector shares in national disposable income 128 8.7 Household savings rate (household surveys data) 130 vii www.ebook3000.com Figures 8.8 Household savings rate (Japan) 131 8.9 Household savings rate (Korea) 131 10.1 Official Gini coefficient estimates for China (2003–2012) 158 12.1 Share of gross industrial output value by ownership (1978–1993) 185 12.2 Profits and losses of SOEs (1985–1993) 185 12.3 Share of gross industrial output value by type of ownership (1993–2003) 190 12.4 Annual profit rates of SOEs (1993–2002) 191 12.5 Share of gross industrial output value by types of ownership above designated size (1998–2011) 194 12.6 Annual average employment ratio by types of ownership above designated size (1998–2011) 194 12.7 Annual ratio of value-added tax payable by types of ownership above designated size (1998–2011) 195 12.8 Annual ratio of total profit by types of ownership above designated size (1998–2011) 195 12.9 Profit rates of SOEs (2002–2011) 196 13.1 Share of FIEs in China’s total exports (1995–2011) 209 13.2 Ratio of China’s trade surplus to total trade (1994–2011) 210 13.3 China’s trade imbalance (2000–2011) 211 13.4 China’s trade balances with selected economies (2007–2011) 212 14.1 Stock of Chinese inbound FDI (US$ billion) 223 14.2 Flow measure of Chinese inbound FDI (US$ billion) 223 14.3 FDI flows:GDP ratios (1985–2011) 225 14.4 FDI stock:GDP ratios (1985–2011) 226 14.5 Increasing IFDI flows from overseas Chinese