Different patterns of Agriculture development in China. A spatial-dynamic development trajectories in cross-provincial comparison

Recently the question of agriculture development has been emphasised as an important part of balanced sustainable growth in China. My paper accounts for different growth trajectories and development pace between coastal regions and inland provinces. My interest is more convergence-divergence between agriculture development in different regions than convergence-divergence between rural and urban areas. Nowadays a harmonious society is strongly pronounced by the government authorities and is new strategic aim on policy agenda. My attempt is to assess the efficiency of government actions toward harmonious society that is based on equal living standards and well-off society. Moreover through quantified research over last 20 year I will try to depict the agriculture development pattern. My attempt is to determine factors that have the biggest impact on agriculture growth. Moreover I would like to highlight the inequality in agriculture development in crossprovincial comparison and identify various contributing factors to the total inequality. This approach may indicate specific factors that are likely to improve agricultural performance. The purpose of this paper is to identify available solutions for convergence in the agricultural development that is major policy aim in China. Some important conclusions are drawn. First of the provincial development gap is highly pronounced with coastal provinces pulling ahead and lagging inland provinces. Moreover with the lapse of time and advancing growth of coastal provinces the catch-up process and convergence of inland provinces does not occur. Major determinants of agriculture development have been empirically identified: Labour ratio in favour of non-agriculture sector with special role of TVEs and their labour-absorptive capacity, increasing cultivated area per household, infrastructure: length of roads and railways, investment in irrigation, regional industrial structure and geographical locations. Net subsidies turned out to be inefficient tools for agricultural growth

Experimentation in securities market structure and regulation in China: from state to market

A key feature of the socialist market economy in China is the development of securities markets so as to facilitate entrepreneurship. With the national securities market now well established attention has shifted to the development of lower tier markets that may be able to meet the financing needs of smaller scale enterprises. In this article we examine how the concept of experimentation has been applied to the process of developing such markets and the regulatory framework in which they operate. We begin with a survey and critique of the policy and regulatory framework within which lower-tier markets have evolved. We argue that experimentation has been important in China but that it operates in a unique way as a result of the institutional structure in which securities markets are located. We then focus more specifically on the regulatory framework for lower tier markets and present two case studies focused on the establishment and operation of two local equity exchanges in a single province (LiaoNing). While this evidence supports our view on the significance of experimentation it also highlights the problems associated with developing lower-tier securities markets within the current policy framework

China's creative industries : clusters and performances

A working paper submitted to the Annual Conference of the Chinese Economist Association held at Cambridge University from 1st to 2nd April 2008Peer reviewedFinal Accepted Versio

Expanding to outward foreign direct investment or not? A multi-dimensional analysis of entry mode transformation of Chinese private exporting firms

This research examines the factors determining whether or not exporting firms expand to outward foreign direct investment (OFDI) as part of their internationalisation strategy, using a recent survey of Chinese private-owned enterprises. We carry out a multi-dimensional analysis to investigate the impact of firm productivity, internal resources and the external environment on OFDI decisions, including both the decision to undertake OFDI and the volume of OFDI flows. It is found that productivity, technology-based capability, export experience, industry entry barriers, subnational institutions and intermediary institutional support affect firms’ OFDI decisions. The findings have important policy and managerial implications

Joint Liability Lending and the Rise and Fall of China's Township and Village Enterprises

Using data from a recent survey of bank and enterprise managers and government officials in southern China, we present a new explanation for the rise and fall of collectively-owned township and village enterprises (TVEs) based on the willingness of banks to finance collective enterprise development. Until recently bank loans to TVEs exhibited the key features of joint liability lending, supported by the unique sanctioning ability of local leaders. Beginning in the mid 1990s, liquidation costs fell, firm performance deteriorated, real interest rates rose, and financial competition increased. These changes led to a dramatic change in the lending preferences of banks in favor of private firms. Empirical estimates of the determinants of bank lending preferences, the involvement of township leaders in lending, and the ability of firms to obtain loans support our explanation.http://deepblue.lib.umich.edu/bitstream/2027.42/39846/3/wp462.pd

Regional innovation and spillover effects of foreign direct investment in China: a threshold approach

Using a data set on twenty-nine Chinese provinces for the period 1985–2008, this paper establishes a threshold model to analyse the relationship between spillover effects of foreign direct investment (FDI) and regional innovation in China. There is clear evidence of double-threshold effects of regional innovation on productivity spillovers from FDI. Specifically, only when the level of regional innovation reaches the minimum innovation threshold will FDI in the region begin to produce positive productivity spillovers. Furthermore, positive productivity spillovers from FDI will be substantial only when the level of regional innovation attains a higher threshold. The double threshold divides Chinese provinces into three super-regions in terms of innovation, with most provinces positioned within the middle-level innovation super-region. Policy implications are discussed

Yardstick competition in a Federation: Theory and Evidence from China

While some scholars argue that fiscal decentralization gave Chinese local officials strong incentives to promote local economic growth, traditional fiscal federalism theories are not directly relevant to explain such an effect in the particular context of China. In this paper, we explain the existence of interjurisdictional competition among Chinese local officials using a model of yardstick competition "from the top", in which the central government (and not local voters) creates a competition among local officials by rewarding or punishing them on the basis of relative economic performance. Our model predicts that, in this context, local governments are forced to care about what other incumbents are doing and that public spending settings are strategic complements. Then, by estimating a spatial lag dynamic model for a panel data of 29 Chinese provinces from 1980 to 2004, we provide empirical evidence of the existence of such public spending interactions. We propose a rigorous empirical framework which takes into account heterogeneity, simultaneity and endogeneity problems and spatial error dependence. The results are encouraging to the view that there are some strategic interactions among Chinese provinces, resulting from a yardstick competition created by the central government.decentralization;China;public spending interactions;yardstick competition;spatial panel data

Product Market Regulation and Competition in China

The extent of competition in product markets is an important determinant of economic growth in both developed and developing countries. This paper uses the 2008 vintage of the OECD indicators of product market regulation to assess the extent to which China’s regulatory environment is supportive of competition in markets for goods and services. The results indicate that, although competition is increasingly robust across most markets, the overall level of product market regulation is still restrictive in international comparison. These impediments to competition are likely to constrain economic growth as the Chinese economy continues to develop and becomes more sophisticated. The paper goes on to review various aspects of China’s regulatory framework and suggests a number of policy initiatives that would improve the extent to which competitive market forces are able to operate. Breaking the traditional links between state-owned enterprises and government agencies is an ongoing challenge. Reducing administrative burdens, increasing private sector involvement in network sectors and lowering barriers to foreign direct investment in services would also increase competition and enhance productivity growth going forward. Some of the reforms introduced by the Chinese government over the past two years go in this direction and should therefore help foster growth.

Joint Liability Lending and the Rise and Fall of China's Township and Village Enterprises

Using data from a recent survey of bank and enterprise managers and government officials in southern China, we present a new explanation for the rise and fall of collectively-owned township and village enterprises (TVEs) based on the willingness of banks to finance collective enterprise development. Until recently bank loans to TVEs exhibited the key features of joint liability lending, supported by the unique sanctioning ability of local leaders. Beginning in the mid 1990s, liquidation costs fell, firm performance deteriorated, real interest rates rose, and financial competition increased. These changes led to a dramatic change in the lending preferences of banks in favor of private firms. Empirical estimates of the determinants of bank lending preferences, the involvement of township leaders in lending, and the ability of firms to obtain loans support our explanation.joint liability, banking, China, privatization, collective