On the road to prosperity? The economic geography of China's national expressway network

Over the past two decades, China has embarked on an ambitious program of expressway network expansion. By facilitating market integration, this program aims both to promote efficiency at the national level and to contribute to the catch-up of lagging inland regions with prosperous Eastern ones. This paper evaluates the aggregate and spatial economic impacts of China's newly constructed National Expressway Network, focussing, in particular, on its short-run impacts. To achieve this aim, the authors adopt a counterfactual approach based on the estimation and simulation of a structural "new economic geography" model. Overall, they find that aggregate Chinese real income was approximately 6 percent higher than it would have been in 2007 had the expressway network not been built. Although there is considerable heterogeneity in the results, the authors do not find evidence of a significant reduction in disparities across prefectural level regions or of a reduction in urban-rural disparities. If anything, the expressway network appears to have reinforced existing patterns of spatial inequality, although, over time, these will likely be reduced by enhanced migration

Are workers close to cities paid higher non-agricultural wages in rural China?

In the present study, we investigate whether workers close to cities are paid higher non-agricultural wages than workers in outlying rural areas. We find that workers close to urban areas not only benefit from more opportunities to engage in non-agricultural activities, but also from better paid jobs. In addition, distance exhibits a strongly nonlinear impact. Distance always has a negative impact on wages but the effect is more detrimental, the closer the village is to the urban center. We also find evidence of urban hierarchy effects: workers living close to bigger cities are paid higher wages. Finally, we provide evidence on the transmission channels at work.Remoteness, regional labor market, China Codes, wages

What are the determinants of producer services FDI in China? Aggregate and sub-sectoral data analyses

This PhD thesis joins a vibrant conversation in a vastly under researched area pertaining to the determinants of producer services foreign direct investment (FDI). It begins by extensively revisiting the existing literature and discussing critically gaps from past study to then adopt a quantitative research method assisted by secondary data collected from various databases. The research question that this thesis addresses is: “What are the determinants of producer services FDI in China? Aggregate and sub-sectoral data analyses”. With this aim in mind, this thesis employs aggregate as well as provincial and sub-sectoral data obtained from the CEIC Data’s China Premium Database, National Bureau of Statistics of China, Provincial Statistical Yearbooks, Ministry of Commerce of China, Ministry of Transport of China, Ministry of Industry and Information Technology as well as a range of other relevant data drawn from national and provincial sources.China is exhibiting an enormous amount of economic and urban development accompanied by a transformation from its past manufacturing-focused economy towards one based on producer services. The conceptual framework developed for this research is guided by the identified research gap found in the literature on the determinants of FDI. The methodology employed is the Autoregressive Distributed Lag (ARDL) cointegration approach and panel data regression techniques to quantitatively investigate the determinants of Chinese producer services FDI at the aggregate and sector-disaggregated level.This research has revealed that there is a significant difference between the determinants of aggregate FDI and Producer Services FDI (PSFDI). The empirical evidence demonstrates that in contrast to the general influencing factors determining aggregate FDI (e.g., GDP, trade openness, low wages and environmental quality), high wages and research intensity are strikingly discovered to have a notable influence on determining PSFDI inflows to China. The evidence captured contends that following appropriate strategies and policies to specifically foster the attraction of PSFDI is of paramount importance for Chinese regulators. Collectively, the main novel findings of this research that make a significant contribution to knowledge rest with a broader understanding of the newly identified determinants of PSFDI inflows in China through a rigorous, evidence-based scientific process of inquiry. The thesis’ contribution adds to ongoing literature by accentuating that China’s aggregate FDI attraction differs from PSFDI’s attraction and that stimulating PSFDI inflows requires different policy measures. The pivotal implication for Chinese policymakers is to develop appropriate policies specifically targeted at attracting inward PSFDI and to implement sub-sector specific policies to encourage PSFDI in those sub-sectors most susceptible to attract PSFDI

Urban services growth: Influencing factors and its effect on regional growth in China

Urban economic success depends on the growth of its services and there are various factors influencing urban services growth. However, earlier studies mostly focus on the demand and supply factors. Factors, such as the institutional environment and services spatial agglomeration, although are important in the context of urban services growth in China, are practically less emphasized. Thus, this study analyzed the contributions of demand, supply, institutional environment, and services spatial agglomeration as factors significance for urban services growth, using the hierarchical multiple regression. The Panel Unit Root Test, Panel Co-integration Model and Panel Vector Error Correction Model were used to examine the short-run and long-run effects of urban services growth on regional economic growth in China. The findings of the present study show that the demand, supply and services spatial agglomeration contributed significantly to urban services growth. However, the institutional environment had relatively smaller contributions, compared to other factors. The Error Correction Model indicated a short-run relationship, while the Panel Co-integration Model revealed the existence of a long-run relationship between urban services growth and regional economic growth in China. In conclusion, the government should implement strategies towards a more balanced urban services growth with specific priority on strategies to expand the demand and supply for urban services, improving residents’ income, to promote urbanization, and deepen division of labor as well as to increase the quality and quantity of factor inputs in urban services. Indeed, future strategies should focus more on measures to promote urban services agglomeration, while improving the urban services marketization and their openness leve

On the road to prosperity ? The economic geography of China's national expressway network

Over the past two decades, China has embarked on an ambitious program of expressway network expansion. By facilitating market integration, this program aims both to promote efficiency at the national level and to contribute to the catch-up of lagging inland regions with prosperous Eastern ones. This paper evaluates the aggregate and spatial economic impacts of China's newly constructed National Expressway Network, focussing, in particular, on its short-run impacts. To achieve this aim, the authors adopt a counterfactual approach based on the estimation and simulation of a structural"new economic geography"model. Overall, they find that aggregate Chinese real income was approximately 6 percent higher than it would have been in 2007 had the expressway network not been built. Although there is considerable heterogeneity in the results, the authors do not find evidence of a significant reduction in disparities across prefectural level regions or of a reduction in urban-rural disparities. If anything, the expressway network appears to have reinforced existing patterns of spatial inequality, although, over time, these will likely be reduced by enhanced migration.Transport Economics Policy&Planning,Economic Theory&Research,Labor Policies,Roads&Highways,Regional Economic Development

Stake-holder firms and the reform of local public finance in China

Since 1978 China has developed strongly using a particular form of capitalism which has relied upon close relations between private enterprise and the state and the continuing presence of state-owned enterprise, both centrally and at local levels. This model has been criticised as being responsible for the rapid rise of debt since 2010 and the slow-down of growth more recently. Using examples taken from Guangdong Province in south China I illustrate the workings of this system and highlight the challenges to adapting it to support China's growth ambitions for the coming decades

China's accession to the World Trade Organization - The services dimension

China's General Agreement on Trade in Services (GATS) commitments represent the most radical services reform program negotiated in the World Trade Organization. China has promised to eliminate over the next few years most restrictions on foreign entry and ownership, as well as most forms of discrimination against foreign firms. These changes are in themselves desirable. However, realizing the gains from, and perhaps even the sustainability of, liberalization will require the implementation of complementary regulatory reform and the appropriate sequencing of reforms. Three issues, in particular, merit attention: 1) Initial restrictions on the geographical scope of services liberalization could encourage the further agglomeration of economic activity in certain regions-to an extent that is unlikely to be reversed completely by subsequent countrywide liberalization. 2) Restrictions on foreign ownership (temporary in most sectors but more durable in telecommunications and life insurance) may dampen the incentives of foreign investors to improve firm performance. 2) Improved prudential regulation and measures to deal with the large burden of non-performing loans on state banks are necessary to deliver the benefits of liberalization in financial services. And in basic telecommunications and other network-based services, meaningful liberalization will be difficult to achieve without strengthened pro-competitive regulation.Payment Systems&Infrastructure,Public Sector Economics&Finance,ICT Policy and Strategies,Banks&Banking Reform,Environmental Economics&Policies,Trade and Services,ICT Policy and Strategies,Banks&Banking Reform,Public Sector Economics&Finance,Health Economics&Finance

The Impact of Industrial Zone:Evidence from China's National High-tech Zone Policy

Based on the statistical yearbook data and related patent data of 287 cities in China from 2000 to 2020, this study regards the policy of establishing the national high-tech zones as a quasi-natural experiment. Using this experiment, this study firstly estimated the treatment effect of the policy and checked the robustness of the estimation. Then the study examined the heterogeneity in different geographic demarcation of China and in different city level of China. After that, this study explored the possible influence mechanism of the policy. It shows that the possible mechanism of the policy is financial support, industrial agglomeration of secondary industry and the spillovers. In the end, this study examined the spillovers deeply and showed the distribution of spillover effect

Occupational diversity in Chinese cities: facts, evolution and policy implications

Measuring the occupational diversity and trend of Chinese cities from the perspective of the distribution of urban occupational types, and discussing the impact of urban characteristics on urban occupational diversity can provide reference for guiding urban full and high-quality employment. By using the improved Herfindahl index, panel data fixed effect model and Oaxaca blinder decomposition, it is found that the occupational diversity in Chinese cities showed a trend of first decreasing and then increasing from 2002 to 2016, which was due to the adjustment of urban industrial structure and the emergence of new economy after the financial crisis; at the same time, the larger the city, the higher the administrative level and the more developed the economy, the higher the degree of occupational diversity. The conclusion of the study is helpful to intuitively understand the occupational distribution, industrial structure and division of labor in different cities, evaluate the human resource structure and economic development potential of cities, and then provide policy suggestions for different cities to formulate industrial development and human resource planning