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The China Boom and its Discontents

The China Boom and its Discontents OPEN ACCESS

Ross Garnaut
Ligang Song
Copyright Date: 2005
Published by: ANU Press
Stable URL: http://www.jstor.org/stable/j.ctt2jbkcr
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  • Book Info
    The China Boom and its Discontents
    Book Description:

    China is shaping the global economy as never before. An insatiable demand for commodities, energy resources and capital, and deepening integration to the world economy has won China acclaim. Yet 25 years of rapid industrial development, far-reaching economic reforms and increasing international competition have also created an array of challenging domestic policy demands. The China Boom and its Discontents discusses the financial and social challenges that have emerged in the wake of rapid economic growth. Recent research on demographic trends, labour movements, financial development, social security, urbanisation and trade agreements highlight the unfinished progress of reforms in China.

    eISBN: 978-1-920942-41-0
    Subjects: Political Science
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Table of Contents

Export Selected Citations
  1. Ross Garnaut

    Chinese economic growth is less problematic now than at any time since the beginnings of reform more than a quarter of a century ago.

    Economic growth last year and this is proceeding at an annual rate around nine and a half per cent, which is the average rate of the reform period. The deflation of the early twenty-first century has ended, without being replaced by worrying degrees of inflationary pressure. Last year’s concerns about excessive investment in state-owned heavy industry have been eased by restrictions on bank credit and a modest increase in interest rates. Current external payments have moved...

  2. Ross Garnaut and Yiping Huang

    High rates of Chinese economic growth in recent years have been associated with exceptionally high and rising rates of investment. This has led to discussion of whether growth that is so dependent on investment is sustainable.

    Rising levels of investment have been a feature of the Chinese economy since the 1950s. Leaving aside the large surge of investment in the late 1950s, the ratio of investment to national production had reached and has continued at levels that were high by international standards by the early 1970s (Figure 2.1).

    In the era of central planning, before 1978, investment was applied wastefully,...

  3. Jianping Ding and Ying Zheng

    On 21 July 2005, China enlarged the renminbi’s (RMB) band of fluctuation by 2 per cent, signalling a stage of exchange market reform. Rapid development of the Chinese economy, and recent political pressures from industrial economies, has prompted ever-stronger calls for the renminbi to be revalued. Different approaches to currency revaluation have been proposed. Goldstein (2005) argues that China should let its currency appreciate by 25–35 per cent and restore equilibrium to the balance of payments, using estimates about the sensitivity of trade flows to revise the exchange rate. Goldstein focuses on two approaches—the ‘underlying balance’ approach, determining...

  4. Cai Fang and Dewen Wang

    China will need to maintain an annual GDP growth rate of 7.2 per cent to meet official ambitions to raise the general prosperity of Chinese society, with GDP in 2020 predicted to be four times the level in 2000. Achievement of this goal would mean that China had sustained a high rate of annual economic growth for more than 40 years. This would not be unique. Economies in Asia, such as Korea, Malaysia, Singapore, Thailand and Hong Kong all sustained economic growth of more than 7 per cent per annum between 1960 and 2000 (Table 4.1). Growth patterns in the...

  5. Tao Kong

    Why have some economies grown and developed, while others have not? Why have some countries experienced rapid economic growth for extended periods, whereas growth in others halted after a relatively short phase? Explaining the erratic and uneven economic growth across countries and over time has been one of the most important and fascinating quests among economists and other social scientists.

    Economic theory has indicated a series of determinants likely to affect economic growth significantly. Among these factors, some are immediate variables that explain economic growth in a direct growth accounting fashion, such as physical and human capital accumulation, population growth,...

  6. Xiaolu Wang

    Economic growth has varied considerably across China’s regions since economic reforms began. The more developed east coast provinces have always experienced higher growth rates than the central or western regions. According to the National Bureau of Statistics (National Bureau of Statistics 1999, 2001, 2002, 2004, 2005), GDP growth rates in the central and western provinces, including minority autonomous regions and municipalities under the direct administration of the central government, were lower than the eastern provinces by approximately one percentage point during the 1980s and by 2–3 percentage points in the 1990s.¹ As a result, inter-region income disparity has increased,...

  7. Ligang Song and Sheng Yu

    Since the mid 1980s, China has experienced unprecedented urbanisation, generating rapid growth in the urban labour force. The reallocation of resources prompted by this labour migration has become an important source of growth and rising incomes. At the same time, however, ‘history’s largest flow of rural–urban migration’ also brings about enormous economic, social, environmental, as well as political challenges that China will have to confront to avoid major disruptions to growth.

    This chapter discusses why urbanisation poses a particular challenge for China, highlighting the size, scope and speed of urbanisation, as well as the institutional constraints on rural-to-urban migration....

  8. Mei Wen

    Industrial competition and ownership diversification have contributed significantly to China’s industrial growth since economic reforms began (Wen 2002a).¹ Although no large-scale transformation of ownership took place in the state industrial sector before 1995 and growth occurred mainly outside the state-planned sector (Naughton 1994), the development of non-state owned industrial firms and market-based competition have raised the prominence of China’s industry in the world economy. The majority of state-owned enterprises (SOEs) made either apparent or genuine losses in the 1990s, and, according to the third national industrial census, held in 1995, many manufacturing industries had excess production capacity. Further fundamental reforms...

  9. Xin Meng

    State-owned enterprises (SOEs) have undergone reform over the past few decades, with the objective to increase the economic efficiency of enterprises. It was not until the mid 1990s that privatisation began, and even then it was a piecemeal rather than a ‘big bang’ approach. By the end of 1990s, most SOEs had experienced some form of restructuring. At the extreme end of the spectrum firms were fully privatised. Most firms, however, were leased out, becoming shareholding companies or joint venture partners with other enterprises. These dramatic changes to the structure of SOEs had significant effects on the employment, wages and...

  10. Zhenya Liu, Hanene Hamdoun and David Dickinson

    China finally joined the World Trade Organization in December 2001, after 14 years of negotiation. Accession makes Chinese enterprises subject to the authority of international rules and competition, including banks. At the same time, China will be open to the risks and uncertainties of international financial markets. The domestic financial structure and banking sector will change dramatically and become stronger and more stable in the long term.

    China has committed to a four-step process of reform for the banking sector on accession to the WTO. Foreign-funded banks will be permitted to provide international financial services to foreign companies in China....

  11. Ted Rule

    Stockmarkets were first established in China in the late nineteenth century to trade the shares of companies involved in foreign trade. All treaty ports had premises where share transactions were carried out. In the early 1920s, it is estimated that China had 150 stockmarkets with the key markets in Shanghai. The 1928 China Yearbook reported that the operations of the Shanghai Gold Exchange were so vast that it was ‘at times capable of influencing the destiny of other countries’ currencies’ (Woodhead 1929:229). Speculation was fierce and the practices ethically questionable. In 1925, the Peking Government telegraphed the Shanghai Municipal Council...

  12. Tim Murton

    Many of the far-reaching economic and social reforms since 1978 have resulted in structural changes to the economy, particularly in the transition from a centrally-planned to a socialist-market economy.

    A significant focus of China’s economic reform agenda has been the reform of state-owned enterprises (SOEs). In a bid to improve efficiency, SOEs are now no longer required to provide the same level of services once expected. The change for social security provisions has been direct and significant. SOEs are no longer required to provide cradle-to-grave welfare in pensions, childcare and other social services. Consequently, since the mid to late 1990s,...

  13. Prema-Chandra Athukorala

    International fragmentation of production—cross-border dispersion of component production/assembly within vertically integrated manufacturing industries—has been an important feature of the deepening structural interdependence of the world economy in recent decades.¹ With a modest start in electronics and clothing industries in the late 1960s, international production networks have gradually evolved and spread into many industries such as sport footwear, automobiles, televisions and radio receivers, sewing machines, office equipment, electrical machinery, power and machine tools, cameras and watches. At the formative stage of product fragmentation, outsourcing predominantly involved locating small fragments of the production process in a low-cost country and reimporting...

  14. Kunwang Li and Ligang Song

    Chinese foreign trade expanded at an average annual rate of 17 per cent from 1979 to 2000, which was twice the average annual growth rate of China’s GDP during the same period. Both growth rates have been considerably higher than the respective world averages over the same period. Accession to the WTO in 2001 has given new impetus to expansion of China’s external trade. In 2003, China’s total external trade reached US$851 billion, an increase of 37 per cent from 2002—China’s first year as a member of the WTO. In that year, with total imports reaching US$413 billion, China...