The Economics of China, and More

Two extremely useful books on China and the Chinese Currency: The Oxford Companion to the Economics of China and Renminbi Internationalization: Achievements, Prospects, and Challenges.


The The Oxford Companion to the Economics of China is edited by Shenggen Fan, Ravi Kanbur, Shang-Jin Wei, and Xiaobo Zhang. Here are the contents:
Part 1: The China Model
1: Xiaopeng Luo: From a Manipulated Revolution to Manipulated Marketisation: A Logic of the Chinese Model
2: Joseph Stiglitz: Transition to a Market Economy: Explaining the Successes and Failures
3: Chen Zongsheng: Chinese Residents’ Rising Income Growth and Distribution Inequality
4: Edwin Lim: The Influence of Foreign Economists in the Early Stages of China’s Reforms
5: Pranab Bardhan: China and India: The Pattern of Recent Growth and Governance in a Comparative Political Economy Perspective
Part 2: Future Prospects for China
6: Simon Cox: Will China Continue to Prosper?
7: Nathaniel Grotte and Robert Fogel: China: Prospects for Future Growth
8: Dwight Perkins: China’s Future Performance and Development Challenges
9: Ligang Song: Rebalancing China’s Growth
10: Michael Spence: China’s Middle Income Transition and Evolving Inclusive Growth Strategy
11: Yanrui Wu: China’s Consumer Revolution
12: Guoqiang Tian: Future Strategy for Growth and Inclusion
Part 3: China and the Global Economy
13: Peter Robertson: The Global Impact of China’s Growth
14: Gordon Hanson: Effects of China’s Trade on Other Countries
15: Dong He: The Internationalisation of the Renminbi
16: Chad Bown: Antidumping and Other Trade Disputes
17: Stephen Smith and Yao Pan: US-China Economic Relations
18: Arvind Subramanian and Aaditya Mattoo: China and the WTO
19: Deborah Brautigam: China’s Aid Policy
Part 4: Trade and the Chinese Economy
20: Menzie Chinn: The Chinese Exchange Rate and Global Imbalances
21: John Whalley and Jing Wang: Using Tax Based Instruments for Innovative China’s Trade Rebalancing
22: Kym Anderson: China’s Evolving Trade Composition
23: Bin Xu: Trade Policy Reform and Trade Volume
24: Ann Harrison: Trade and Industrial Policy: China in the 1990s to Today
Part 5: Macroeconomics and Finance
25: Ross Garnaut: China: International Macro-economic Impact of Domestic Change
26: Roger Gordon: Chinese Tax Structure
27: Shuanglin Lin: Government Expenditures
28: Dennis Tao Yang and Guonan Ma: China’s High Saving Puzzle
29: Eswar Prasad and Boyang Zhang: Monetary Policy in China
30: Feng Lu: China’s Inflation in the Post-Reform Period
31: Yiping Huang: Local Government Debts
32: Nouriel Roubini and Adam Wolfe: China is Headed for a Financial Crisis and a Sharp Slowdown
33: Jun ‘QJ’ Qian and Franklin Allen: How Can China’s Financial System Help Transform its Economy?
Part 6: Urbanization
34: Vernon Henderson: Urbanization in China
35: Lina Song: Urban Wages in China
36: David Dollar: Local Investment Climates and Competition among Cities
37: Yongheng Deng: The Value of Land and Housing in China’s Residential Market
38: Zheng Song: The Urban Pension System
Part 7: Industry and Markets
39: Justin Yifu Lin: Development Strategy and Industrialization
40: Loren Brandt: Industrial Upgrading and Productivity Growth in China
41: Jici Wang: Making Clusters Innovative? A Chinese Observation
42: Victor Nee and Sonja Opper: Markets and Institutional Change in China
43: Zhigang Tao, Julan Du, and Yi Lu: Economic Institutions and their Impacts on Firm Strategies and Performance
44: Hanming Fang: Insurance Markets in China
45: Weiying Zhang: The Future of Private and State-owned Enterprises in China
46: Yasheng Huang: Political Economy of Privatization in China
Part 8: Agriculture and Rural Development
47: Laixiang Sun: Food Security and Agriculture in China
48: Funing Zhong: Food Security in China: Historic and Future Perspectives: How does China feed its People?
49: Keijiro Kei Otsuka: Farm Size and Long-Term Prospects for Chinese Agriculture
50: Scott Rozelle and Jikan Huang: Agriculture R&D and Extension
51: Calum Turvey: Rural Credit in China
52: Huang Zuhui: Farmer Cooperatives in China: Development and Diversification
53: Nancy Qian: Village Governance in China
54: Loren Brandt: Local Governance and Rural Public Good Provision
Part 9: Land, Infrastructure, and Environment
55: Chengri Ding: Land and Development in China
56: Sylvie Démurger: Infrastructure in China
57: Trevor Houser: Doing Good While Doing Well: China’s Search for Environmentally Sustainable Economic Growth
58: Ximing Cai and Michelle Miro: Sustainable Water Resources Management in China: Critical Issues and Opportunities for Policy Reforms
59: Hua Wang: Benefit-Cost Analysis of Ambient Water Quality Improvement in China
60: Ye Qi: Climate Change
Part 10: Population and Labor
61: Cai Fang: What Challenges is Demographic Transition Bringing to China’s Growth?
62: Xin Meng: Rural-Urban Migration in China
63: Yang Yao: The Lewis Turning Point: Is There a Labor Shortage in China?
64: Yaohui Zhao: Labor and Employment in China
Part 11: Dimensions of Wellbeing and Inequality
65: Richard Easterlin: China’s Well-Being Since 1990
66: Xi Chen: Relative Deprivation in China
67: Albert Park and Wang Sangui: Poverty
68: Carl Riskin: Inequality and the Reform Era in China
69: John Knight: Inequality in China
70: Hongbin Cai: Overcoming the Middle-income Trap in China: From the Perspective of Social Mobility
71: Wan BaoRui: Trends in Food Consumption and Nutrition in China
72: Douglas Almond: The Great Chinese Famine
73: Martin Ravallion: An Emerging New Form of Social Protection in 21st Century China
Part 12: Health and Education
74: Gordon Liu and Samuel Krumholz: Economics of Health Transitions in China
75: Ling Zhu: The Changing Landscape of Rural Health Services in China
76: James Heckman and Junjian Yi: Human Capital, Economic Growth, and Inequality in China
77: Haizheng Li and Qinyi Liu: Human Capital: Schooling
78: Wang Rong: Commanding Heights: The State and Higher Education in China
79: Yingui Qian: Economics and Business Education in China
Part 13: Gender Equity
80: Xiao-yuan Dong: Gender and China’s Development
81: Hongbin Li and Lingsheng Meng: High Sex Ratio in China: Causes and Consequences
82: Yu Xie: Gender and Family
83: Alan de Brauw: Women and Agricultural Labor in China
Part 14: Regional Divergence in China
84: Kai-yuen Tsui: Regional Divergence
85: Chenggang Xu: China’s Political-Economic Institution: Regionally Decentralized Authoritarianism (RDA)
86: Du Ying: China’s Regional Development Strategy
Part 15: China’s Provinces: Selected Perspectives
87: Dai Peikun: Anhui: Economic and Social Development
88: Guo Wanda: Guangdong: Maintaining Leadership in China’s Next Round of Reforms
89: Cui Zhongren: Guangxi: Rapid Development
90: Yang Chenhua: Inner Mongolia Autonomous Region: Strategies and Considerations of Development
91: Futian Qu: Jiangsu: Pattern Change and Structural Adjustment
92: Qu Dongyu: Ningxia: Poverty Alleviation and Development
93: Zhang Chuanting: Shandong: Scientific Development and New Prospects
94: Hi Tang Jie: Shenzhen: From Labor-Intensive to Innovation-driven Economic Growth
95: Changwen Zhao: Sichuan: A West-China Province with Fast Development and Change
96: Chen Zongsheng: Tianjin: The Third Growth Pole of China
97: Xie Qingsheng: Western Regions: Ideas of Cultural Industry Development
98: Jinchuan Shi: Zhejiang: Economic Development

renminbi internationalization_2x3

The Renminbi Internationalization: Achievements, Prospects, and Challenges (Brookings for ADB) was edited by Barry Eichengreen and Masahiro Kawai; an overview by the editors is available here, while Eichengreen discusses the issue in this video. Contributors include Yu Yongding, Prince Christian Cruz, Lei Lei Song and Yuning Gao, Eswar Prasad, Benjamin Cohen, Yiping Huang, Wang Daili, Fan Gan, Yin-Wong Cheung, Changyong Rhee, Lea Sumalong, Hiro Ito, Menzie Chinn and Liqing Zhang. My paper with Hiro Ito is discussed in this post (paper here).

11 thoughts on “The Economics of China, and More

  1. PeakTrader

    Basically, the China model is a totalitarian state exploiting the masses and the environment.

    The communist elites give the masses enough to keep them working and prevent a rebellion.

    Sorry, China, There Is No Short Cut To Economic Greatness
    Jan. 26, 2010

    “This is a government that will go to great length to maintain appearances to keep its ideology going. After all, it censors what its citizens may or may not read and imprisons the ones that write anti-government articles.

    China will do anything to grow its economy, as the alternatives will lead to political unrest…Since China lacks the social safety net of the developed world, unemployed people are not just inconvenienced by the loss of their jobs, they starve (this explains the high savings rate in China) and hungry people don’t complain, they riot.

    The Chinese government controls the banks, thus it can make them lend, and it can force state-owned enterprises (a third of the economy) to borrow and to spend. Also, since the rule of law and human and property rights are nascent in its economic and political system, China can spend infrastructure project money very fast – if a school is in the way of a road the government wants to build, it becomes a casualty for the greater good.

    China has spent a tremendous amount of money on infrastructure over last decade and there are definitely long-term benefits to having better highways, fast railroads, more hospitals, etc. But government is horrible at allocating large amounts of capital, especially at the speed it was done in China. Political decisions (driven by the goal of full employment) are often uneconomical, and corruption and cronyism result in projects that destroy value.

    The inefficiencies are also evident in industrial overcapacity. According to Pivot Capital, Chinese excess capacity in cement is greater than the combined consumption by the US, Japan, and India combined. Also, Chinese idle production of steel is greater than the production capacity of Japan and South Korea combined. Similarly disturbing statistics are true for many other industrial commodities.

    …late-stage-growth obesity, inefficiencies that are a byproduct of high growth rates sustained for a long period of time. Though Chinese growth in the past was high, in its late stages the quality of growth has been low.”

  2. BC

    China’s actual real GDP growth per capita is probably closer to 2-3% heading for a 10-year trend rate of 1% or less by the early to mid-2020s.

    Overpopulation, water shortages, desertification, loss of arable land, deforestation, erosion, and water and air pollution worse in scale than in the US and UK during the First and Second Industrial Revolutions will have prohibitive long-term costs to the further growth of industrialization.

    As occurred in Japan after 1998 and the US since 2007-08, China’s peak demographic drag effects are now taking hold and will increase in intensity into the mid-2020s.

    China has created the largest credit and fixed investment bubble as a share of GDP in all of world history, with the possible exceptions of the Egyptian pyramids and China’s Great Wall. 🙂 All bubbles burst. The largest bubbles burst spectacularly.

    Historically, every 60 years or so (during Long Wave Troughs, as we are experiencing today) since the late 18th century (White Lotus Rebellion, Opium Wars, Boxer Rebellion, and Mao’s revolution), China has opened up to the West and then experienced economic crises leading to social unrest and eventual gov’t reaction and turning inward from the rest of the world. China is due another mass-social crisis, gov’t reaction, and turning inward to deal with the domestic instability. I expect the emerging generation of PLA generals to exert more economic and political power in Beijing as economic conditions weaken and turn to crisis in China.

    The rest of Asia, including the Asian city-states of Singapore, Hong Kong, and Taiwan, will experience the negative effects of the fallout from China in crisis in the years ahead.

    China is a four-letter word (and has been for years now): SELL.

  3. PeakTrader

    China’s masses will retire very poorly, in part, because of its immigration and one-child policies.

    The masses work very hard for very little.

    “Infrastructure and real estate projects are where you get your biggest bang for the buck if your goal is to maintain employment, since they require a lot of unskilled labor; and this is where in the past a lot of Chinese money was spent…in 2009, new floor space constructed was up 100% and residential real estate prices surged 25%….they keep building skyscrapers even though the adjacent ones are still vacant…built the largest shopping mall in the world, the South China Mall, that is 99% vacant, years after construction….built a whole city, Ordos, in Inner Mongolia, on spec for million residents who never appeared.”

    Myth of China’s Manufacturing Prowess
    March 10, 2010

    “People often compare China’s urbanization to Western industrialization in the 19th century. In both cases, a large population moved from the country to the city. Society advanced from agricultural to industrial via manufacturing on a massive scale.

    In the United States and Europe, the manufacturing industry was created due to technology innovation. For example, railways came into existence because of the invention of the steam engine, and automobiles were created because of technology breakthroughs in automobile engines.

    In China, the manufacturing industry is being created in response to global demand. Chinese manufacturers take orders from Western companies that have designed products for their home markets. They have no involvement with product development, innovation, market research, and even packaging.

    James Fallows (an economist) visited many factories in China. He saw people working on the assembly lines and was convinced those tasks would only be performed by machines in the United States.

    In 2008, U.S. manufacturing output was $1.8 trillion, compared to $1.4 trillion in China….the United States is producing goods with higher value, such as airplanes and medical equipment.

    In addition, most jobs the United States lost to China are low-skilled jobs. By outsourcing those low-skilled jobs to China, Americans have actually become more competitive in high-skilled jobs such as management, innovation, and marketing.”

  4. BC

    Ricardo, the RMB is still de facto pegged to the US$ via FDI, intra-Asian trade and capital flows, and offshore hot money flows via the back door in Singapore and Hong Kong. China’s share of total int’l flows and transactions as a share of total trade and GDP outside US and Japanese FDI is trivial to insignificant. In fact, once the hot money and back door money completes escaping the Middle Kingdom, the RMB will likely revert to its historical position as a strictly Chinese medium of exchange.

    Apart from the Alberta tar sands toxic waste dump and resulting lunar-like landscape and the Godzilla-like Fukushima tragedy, a growing share of China has become an unlivable, ecological dystopia.

  5. Ricardo


    I realize that use of the RMB is small compared to the dollar and I also know that, contrary to the desires of the US monetary manipulators, the Chinese dropped the peg but have managed to dollar parity to prevent the US from gaining any monetary windfall. But I also know that China just passed the Canadian and, more important, the Australian dollar.

    The Chinese are still working through diplomatic channels for currency unity in Asia. If the FED returns to the Bernnake policy mix Asia will very likely abandon the use of the dollar.

    While the RMB is only about 3% of the transactions remember that US foreign trade is about 7%. But just consider what an impact that 7% has on the US economy. The RMB is moving toward more acceptance while the dollar is sliding (though not as fast since EQ ended).

    1. BC

      China’s financial system cannot withstand the hot money flows that would come with broader use or convertibility of RMB.

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