The Chinese Economy, 2e

by Naughton

| ISBN: 9780262344067 | Copyright 2017

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This comprehensive overview of the modern Chinese economy by a noted expert on China's economic development offers a quality and breadth of coverage not found in any other English-language text. In The Chinese Economy, Barry Naughton provides both a broadly focused introduction to China's economy since 1949 and original insights based on his own extensive research. This second edition has been thoroughly revised to reflect a decade of developments in China's economy, notably the end of the period of "miracle growth" and the multiple transitions it now confronts -- demographic, technological, macroeconomic, and institutional. Coverage of macroeconomic and financial policy has been significantly expanded.

After covering endowments, legacies, economic systems, and general issues of economic structure, labor, and living standards, the book examines specific economic sectors, including agriculture, industry, technology, and foreign trade and investment. It then treats financial, macroeconomic, and environmental issues. The book covers such topics as patterns of growth and development, including population growth and the one-child family policy; the rural and urban economies, including rural industrialization and urban technological development; incoming and outgoing foreign investment; and environmental quality and the sustainability of growth.

The book will be an essential resource for students, teachers, scholars, business practitioners, and policymakers. It is suitable for classroom use for undergraduate or graduate courses.

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Contents (pg. v)
Acknowledgments (pg. vii)
1. Introduction: The Chinese Economy in Context (pg. 1)
1.1 Enabling Conditions (pg. 3)
1.2 Growth and Development Level (pg. 4)
1.3 Growth: Looking Backward and Forward (pg. 6)
1.4 Structural Transformation and the End of the Miracle-Growth Era (pg. 7)
1.5 System Reform: An Increasingly Contested Transformation (pg. 12)
1.6 Growth Acceleration and Slowdown (pg. 14)
1.7 Responding to the “New Normal” (pg. 16)
1.8 Using This Book (pg. 17)
Bibliography (pg. 18)
I. Legacies and Setting (pg. 21)
2. The Geographic Setting (pg. 23)
2.1 Landforms (pg. 24)
2.2 Climate and Water (pg. 26)
2.3 Provinces and Regions (pg. 29)
2.4 Natural Resources (pg. 35)
2.5 The Built Landscape (pg. 35)
2.6 Changing Regional Dynamics (pg. 37)
2.7 Conclusion (pg. 39)
Bibliography (pg. 40)
3. The Chinese Economy Before 1949 (pg. 43)
3.1 The Traditional Economy, 1127–1911 (pg. 44)
3.2 The Failed Response to the West and Japan (pg. 50)
3.3 The Beginnings of Modernization, 1912–1937 (pg. 52)
3.4 War and Civil War, 1937–1949 (pg. 57)
3.5 Legacies of the Pre-1949 Economy (pg. 60)
Bibliography (pg. 63)
4. The Socialist Era, 1949–1978: Big Push Industrialization and Policy Instability (pg. 65)
4.1 The Big Push Development Strategy (pg. 66)
4.2 The Command-Economy System in China (pg. 69)
4.3 Policy Instability (pg. 72)
4.4 Legacies of the Socialist Period (pg. 89)
Bibliography (pg. 92)
5. Market Transition: Strategy and Process (pg. 95)
5.1 The Challenge of Reform (pg. 96)
5.2 Reforms Begin: Political Relaxation and the Rural Breakthrough (pg. 100)
5.3 Accelerated Transition, 1984–1989 (pg. 102)
5.4 Interlude, 1989–1992 (pg. 110)
5.5 Accelerated Transition, 1993–1999 (pg. 111)
5.6 A New Institutional Framework (Political Economy Interlude No. 2) (pg. 118)
5.7 Reform Slowdown After 2003 (pg. 120)
5.8 Renewed Reform Initiative After 2013 (pg. 122)
5.9 Market Transition: Conclusion (pg. 123)
Bibliography (pg. 124)
6. The Urban-Rural Divide and Chinese-style Urbanization (pg. 127)
6.1 A Dualistic System: The Division Between Urban and Rural (pg. 128)
6.2 Urbanization (pg. 135)
6.3 Rural-to-Urban Migration (pg. 139)
6.4 Economic Consequences of the Urban-Rural Divide (pg. 142)
6.5 Policy Efforts to Close the Urban-Rural Divide Since 2003 (pg. 145)
6.6 Conclusion: The Urban-Rural Divide Today (pg. 148)
Bibliography (pg. 151)
II. Patterns of Growth and Development (pg. 153)
7. Growth and Structural Change (pg. 155)
7.1 Long-Run Growth (pg. 156)
7.2 Structural Change (pg. 161)
7.3 Investment (pg. 169)
7.4 Production Functions, Productivity, and Growth Decomposition (pg. 173)
7.5 What Is a Growth Miracle? (pg. 177)
7.6 The End of the Growth Miracle (pg. 179)
7.7 Conclusion (pg. 181)
Bibliography (pg. 182)
8. Population: Demographic Transition, the Demographic Dividend, and the One-Child Policy (pg. 185)
8.1 The Demographic Transition and the Demographic Dividend (pg. 186)
8.2 China’s Demographic Transition (pg. 190)
8.3 The Role of Government Policy (pg. 193)
8.4 The Impact of the One-Child Policy and Declining Fertility (pg. 195)
8.5 Changing Age Composition (pg. 200)
8.6 Long-Run Trends and Population Aging (pg. 202)
8.7 Conclusion (pg. 206)
Bibliography (pg. 207)
9. Labor and Human Capital (pg. 209)
9.1 The Chinese Labor Force Today (pg. 210)
9.2 The Institutional Transformation of Chinese Labor (pg. 213)
9.3 How Well Do Labor Markets Function in China Today? (pg. 219)
9.4 Human Capital and Educational Attainment (pg. 224)
9.5 Returns to Other Attributes (pg. 226)
9.6 Labor-Market Segmentation: A Deeper Look (pg. 228)
9.7 The Migration Decision (pg. 228)
9.8 Labor Supply and the Lewis Turning Point (pg. 230)
9.9 Conclusion (pg. 233)
Bibliography (pg. 233)
10. Living Standards: Incomes, Inequality, and Poverty (pg. 237)
10.1 Income Growth (pg. 238)
10.2 Poverty (pg. 240)
10.3 Inequality (pg. 246)
10.4 Physical Quality of Life Indicators (pg. 251)
10.5 Conclusion (pg. 255)
Bibliography (pg. 255)
III. The Rural Economy (pg. 257)
11. Rural Organization (pg. 259)
11.1 The Chinese Village (pg. 260)
11.2 Agricultural Collectives (pg. 261)
11.3 The Second Revolution in the Countryside: Rural Reforms, 1979–1984 (pg. 267)
11.4 The New Socialist Countryside: Establishing Supportive Government Policy (pg. 272)
11.5 Conclusion (pg. 276)
Bibliography (pg. 277)
12. Agriculture: Technology, Production, and Policy (pg. 279)
12.1 Output Growth in Agriculture (pg. 280)
12.2 The Green Revolution (pg. 282)
12.3 Technology Choice and Innovation in Agriculture (pg. 288)
12.4 Diversification and Structural Change (pg. 293)
12.5 Agricultural Policy (pg. 296)
12.6 Conclusion: Toward Sustainable Agriculture (pg. 302)
Bibliography (pg. 303)
13. Rural Industrialization: From Township and Village Enterprises to Taobao Villages (pg. 307)
13.1 Origins of the TVEs (pg. 308)
13.2 The Golden Age of TVE Development (pg. 310)
13.3 Causes of Rapid Growth (pg. 311)
13.4 Diverse Regional Models of TVE Development (pg. 316)
13.5 The Transformation of TVEs in the New Century (pg. 319)
13.6 Emergence of Rural Industrial Clusters in the Twenty-First Century (pg. 325)
13.7 Epilogue: Taobao Villages (pg. 326)
Bibliography (pg. 328)
IV. The Urban Economy (pg. 331)
14. Industry: Ownership and Corporate Governance (pg. 333)
14.1 Entry of Small-scale, Hybrid, and Private Firms (pg. 335)
14.2 A Diverse and Competitive Industrial Economy (pg. 341)
14.3 Ownership and the Public Interest (pg. 342)
14.4 Corporate Governance: Firm-Level Institutions (pg. 344)
14.5 Public Ownership Agencies and Their Missions (pg. 348)
14.6 Profitability and Finance of the State Industrial Sector (pg. 352)
14.7 Sectoral Composition of the State Sector (pg. 354)
14.8 Conclusion (pg. 358)
Bibliography (pg. 360)
15. Technology and Industrial Policy (pg. 363)
15.1 Framework (pg. 364)
15.2 Technology Effort (pg. 365)
15.3 Human Resources (pg. 370)
15.4 Strategies of Technology Development (pg. 373)
15.5 The Turn to Techno-Industrial Policy After 2006 (pg. 379)
15.6 A Multistranded Program of High-Technology Development (pg. 383)
15.7 Outcomes (pg. 388)
15.8 Technology Policy Issues (pg. 390)
15.9 Conclusion (pg. 392)
Bibliography (pg. 393)
V. China and the World Economy (pg. 395)
16. International Trade (pg. 397)
16.1 Background (pg. 398)
16.2 Reforming the Trade System (pg. 402)
16.3 A Dualist Trade Regime: The Strange Career of Export-Processing Trade (pg. 407)
16.4 WTO Membership and Steps to an Open Economy (pg. 410)
16.5 Composition of Trade (pg. 413)
16.6 Technological Sophistication (pg. 417)
16.7 Trade Partners (pg. 418)
16.8 Accommodating Structural and Regional Change (pg. 419)
16.9 Conclusion (pg. 421)
Bibliography (pg. 422)
17. Foreign Investment and the Capital Account (pg. 423)
17.1 FDI in the Chinese Economy (pg. 424)
17.2 “Zones”: Gradual Liberalization of the Investment Regime (pg. 426)
17.3 The Impact of FDI (pg. 431)
17.4 Sources of Investment in China (pg. 433)
17.5 The Sectoral Composition of FDI and WTO (pg. 439)
17.6 Outbound FDI (pg. 439)
17.7 The Balance of Payments and the Capital Account (pg. 442)
17.8 Accommodating Capital Outflows (pg. 444)
17.9 Conclusion (pg. 448)
Bibliography (pg. 449)
VI. Macroeconomics and Finance (pg. 451)
18. Macroeconomic Policy: Instruments and Outcomes (pg. 453)
18.1 The Objectives of Macroeconomic Policy (pg. 453)
18.2 A Snapshot of China’s Macroeconomic Record, 1978–2016 (pg. 456)
18.3 The Demand Side and Macroeconomic Policy Instruments (pg. 458)
18.4 Money and Monetary Policy (pg. 461)
18.5 Special Features of China’s Monetary System (pg. 466)
18.6 Chinese Monetary Policy in Practice: Three Episodes (pg. 467)
18.7 Macroeconomic Policy After the High-Growth Era (pg. 474)
18.8 Conclusion (pg. 477)
Bibliography (pg. 478)
19. The Financial System (pg. 479)
19.1 Building Block Concepts (pg. 479)
19.2 Saving (pg. 483)
19.3 The Chinese Banking System (pg. 487)
19.4 Capital Markets: Equity (pg. 495)
19.5 Capital Markets: Bonds (pg. 499)
19.6 Shadow Banking (pg. 502)
19.7 Liberalization and the Marketization of Interest Rates (pg. 506)
19.8 Conclusion (pg. 507)
Bibliography (pg. 511)
20. The Fiscal System (pg. 513)
20.1 Revenue and Taxation (pg. 515)
20.2 Expenditures (pg. 518)
20.3 Central and Local Budgets (pg. 523)
20.4 Rural Government Budgets (pg. 528)
20.5 Urban Government Budgets (pg. 530)
20.6 Local-Government Debt (pg. 533)
20.7 Fiscal Reform and Overall Economic Reform (pg. 535)
20.8 Conclusion (pg. 538)
Bibliography (pg. 539)
VII. Conclusion: China’s Future (pg. 541)
21. Environmental Quality and the Sustainability of Growth (pg. 543)
21.1 The Energy Baseline and the Coal Problem (pg. 544)
21.2 Energy and Environmental Policy (pg. 550)
21.3 Pollution (pg. 558)
21.4 Conclusion: The Environment, Sustainability, and Global Warming (pg. 565)
Bibliography (pg. 567)
Index (pg. 571)
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