Improving Infrastructure: a cost-benefit analysis of the economic performance of the Huli industrial Zone

China established four special economic zones in 1980 to stimulate exports, to assist the transfer of modern technology to China, to attract foreign investment for these purposes, and in general to enable economic experimentation to take place without detrimental effects to the Chinese economy. Protection levels were lowered and special subsidies provided to foreign and domestic investors. The special economic zones absorbed considerable public funds. Following the lead of other East Asian countries, China provided a considerable infrastructure in the zones, in fact going further than most export processing zones in Asia. Thus not only were roads, serviced sites and public utilities provided, but harbours were upgraded with capital­intensive technology and factories and living quarters for foreign investors were built. Financial and economic cost-benefit analysis that analyses the returns on such investment has not, however, been widely applied. This paper applies such analysis to the Huli industrial estate of the Xiamen special economic zone. The cost-benefit methodology required the calculation of the shadow prices of capital and wages. These indicated that the shadow price of capital is considerably higher, and the shadow price of unskilled labour considerably lower, than the prices facing public and private decision makers. The shadow price of capital is about 4 times the official interest rate. Detailed insights into the operation of firms in the Huli estate were also obtained. As the public and private investment already made is a sunk cost, the focus of the study is on how the cost-benefit analysis can be used to improve policies affecting the operation of firms in special economic zones and investment in future special or export processing zones. The case study suggests that, as cunently structured, the Huli estate is costly. Assuming a project horizon of 25 years the rate of return to the investment in the estate is around 4 per cent. Adjustments that would increase the returns to investment seem to be advisable. These should include the reduction of capital intensity in the infrastructure, less capital­intensive inputs into production, reduction of borrowing in China by foreign firms and the elimination of subsidies to public utilities. Raising labour productivity and thus reducing labour costs would also improve the rate of return on public and private investment

The shadow price of capital in China

The shadow price of capital is the present value of the stream of future consumption generated by current marginal investment. This paper derives an estimate of the shadow price of capital for China based on estimations of the marginal productivity of capital, the marginal propensity to save and the consumption rate of interest. Macro-economic data from independent accounting units of state industrial enterprises is compared to micro-economic data from World Bank project reports to produce a more realistic estimate. Using a simple model with no reinstatement, where the shadow price of capital depends only on the marginal productivity of capital and the consumption rate of interest, a lower limit for the shadow price of capital of 2.1 is estimated. Using a more complex aggregate function approach, an upper limit of 4.2 is estimated. The mean value of 3.2 is chosen as the shadow price of capital or the value of public investment in China. This estimate indicates that opportunity cost of capital is two times of its market price. In other words, the use of capital in China is subsidized. To exploit its labour-intensive comparative advantage and to correct capital market distortions, capital should be made more expensive to the user in China

Estimation of the Shadow price of Labour in China

The shadow prices of unskilled and skilled labour are discussed and estimated for the Xiamen special economic zone in China for the period 1986-1989. Unskilled labour is assumed to be drawn from rural areas. The estimated shadow cost of unskilled labour includes the agricultural output forgone, the effect of excess migration from rural areas to urban areas when urban jobs become available and the net social cost of increased consumption by workers at new jobs with higher wages. The estimated shadow cost of skilled labour includes output forgone at the worker's previous job and the net social cost of increased consumption. The estimates for 1986-89 show that unskilled labour is over-priced and skilled labour is under-priced in the Xiamen special economic zone, resulting in capital-intensive production rather labour-intensive production more in line with China's comparative advantage

The Huli Zone: A cost-benefit analysis (In Chinese- translation by Yiqi Wu)

China established four special economic zones in 1980 to stimulate exports, to assist the transfer of modem technology to China, to attract foreign investment for these purposes, and in general to enable economic experimentation to take place without detrimental effects to the Chinese economy. Protection levels were lowered and special subsidies provided to The special economic zones absorbed considerable public funds. Following the lead of other East Asian countries, China provided a considerable infrastructure in the zones, in fact going further than most export processing zones in Asia. Thus not only were roads, serviced sites and public utilities provided, but harbours were upgraded with capital­intensive technology and factories and living quarters for foreign investors were built. Financial and economic cost-benefit analysis that analyses the returns on such investment has not, however, been widely applied. This paper applies such analysis to the Huli industrial estate of the Xiamen special economic zone. The cost-benefit methodology required the calculation of the shadow prices of capital and wages. These indicated that the shadow price of capital is considerably higher, and the shadow price of unskilled labour considerably lower, than the prices facing public and private decision makers. The shadow price of capital is about 4 times the official interest rate. Detailed insights into the operation of firms in the Huli estate were also obtained. As the public and private investment already made is a sunk cost, the focus of the study is on how the cost-benefit analysis can be used to improve policies affecting the operation of firms in special economic zones and investment in future special or export processing zones. The case study suggests that, as currently structured, the Huli estate is costly. Assuming a project horizon of 25 years the rate of return to the investment in the estate is around 4 per cent. Adjustments that would increase the returns to investment seem to be advisable. These should include the reduction of capital intensity in the infrastructure, less capital­intensive inputs into production, reduction of borrowing in China by foreign firms and the elimination of subsidies to public utilities. Raising labour productivity and thus reducing labour costs would also improve the rate of return on public and private investment

Application of cost-benefit analysis in China : a case study of the Xiamen special economic zone

Special economic zones were introduced as an important component of China's open-door policy. Although the impact of the growth of special economic zones is not large in the context of overall development, or even in the growth of exports, their performance has attracted considerable attention. It is also of interest to policy makers in China, who are seeking to evaluate existing and possible economic policies for industrialization in a reformed economic system. This study develops a cost-benefit analysis framework within which shadow prices can be consistently estimated, to undertake evaluations of public investment in China. A shadow price of capital is calculated for China as a whole. Because of the large size of the geographical economy, market segmentation and restricted geographic labour mobility, the estimation of the shadow price of skilled and unskilled labour is only applicable to the Xiamen zone. These shadow prices. are employed in a case study, to facilitate analysis of the economy of a region in the Xiamen special economic zone, the Huli export processing zone. Some recommendations are made on improvements in resource allocation which could enhance welfare gains from the special economic zone. The study of shadow prices suggests that the nature of the centrally planned economy and the pursuit of self reliance at all costs distorted the Chinese economy. The limits placed on the operation of market mechanisms have resulted in a great divergence of market prices from economic prices. The shadow prices of capital and labour indicate that the actual prices facing producers are highly distorted. The market price of capital is well below its true opportunity cost to the economy, while that of unskilled labour is well above its opportunity cost. Hence, the Huli zone has been the recipient of very large capital subsidies which have represented high costs to the Chinese economy. Real labour costs faced by zone producers and construction firms, on the other hand, are relatively high in relation to the opportunity cost of this labour. Given China's factor endowment, it needs to use labour intensive techniques for export. But in reality, there is a strong tendency to favour most recently developed technology. The Huli zone is therefore dominated by excessively capital and technology intensive techniques in the provision of infrastructural services and production. The case study shows that the Huli zone project is not viable economically unless the positive externalities, such as technology and managerial skill transfer have significant effects on the Chinese economy. To raise the welfare effects of the Huli zone, the design of the zone should be improved. Sensitivity analysis confirmed that the Huli zone should adopt more appropriate technology, reduce capital intensive inputs, markedly reduce domestic borrowing, eliminate government subsidies in the usage of public utilities and encourage the use of more local raw materials and capital goods inputs. This would lead to an appreciably higher economic rate of return to the Chinese economy

Economic development and regional integration of the ASEAN member countries

The ASEAN member countries are among the fastest growing developing countries in the world. Their high rate of growth during the past two decades and their collective efforts in world affairs have received growing international notice. The objective of this study is to examinate the extent to which economic growth resulted from regional integration among the ASEAN member countries. The study of the characteristics of the ASEAN economies, their growth performance and their experience of economic cooperation, suggests that their economic achievements mainly resulted from the effectiveness of each country's own policies. Outward orientation toward world markets was key, but it was supported by relatively efficient macroeconomic and sectoral policies. The region had relatively high intra-regional trade before the formation of ASEAN, and such trade has persisted. However, apart from Singapore's entrepot trade, it principally consists of complementary trade in primary products which have never become heavily protected. Intra-ASEAN trade In manufactures has not increased appreciably, because ASEAN has not reduced protection substantially either among the member countries alone, or among the member countries and against the rest of the world. Econometric experiments confirmed that little would be gained by a preferential arrangement, and suggested that complete intra-ASEAN trade liberalization would also not lead to a marked increase in the ratio of intra-ASEAN to total ASEAN trade. Much of such an increase would, moreover, consist of trade diversion rather than trade creation. A reduction of trade barriers within ASEAN simultaneously with world wide trade liberalization would in contrast, lead to appreciable output and trade growth for the ASEAN member countries

Positional differences in the wound transcriptome of skin and oral mucosa

<p>Abstract</p> <p>Background</p> <p>When compared to skin, oral mucosal wounds heal rapidly and with reduced scar formation. Recent studies suggest that intrinsic differences in inflammation, growth factor production, levels of stem cells, and cellular proliferation capacity may underlie the exceptional healing that occurs in oral mucosa. The current study was designed to compare the transcriptomes of oral mucosal and skin wounds in order to identify critical differences in the healing response at these two sites using an unbiased approach.</p> <p>Results</p> <p>Using microarray analysis, we explored the differences in gene expression in skin and oral mucosal wound healing in a murine model of paired equivalent sized wounds. Samples were examined from days 0 to 10 and spanned all stages of the wound healing process. Using unwounded matched tissue as a control, filtering identified 1,479 probe sets in skin wounds yet only 502 probe sets in mucosal wounds that were significantly differentially expressed over time. Clusters of genes that showed similar patterns of expression were also identified in each wound type. Analysis of functionally related gene expression demonstrated dramatically different reactions to injury between skin and mucosal wounds. To explore whether site-specific differences might be derived from intrinsic differences in cellular responses at each site, we compared the response of isolated epithelial cells from skin and oral mucosa to a defined in vitro stimulus. When cytokine levels were measured, epithelial cells from skin produced significantly higher amounts of proinflammatory cytokines than cells from oral mucosa.</p> <p>Conclusions</p> <p>The results provide the first detailed molecular profile of the site-specific differences in the genetic response to injury in mucosa and skin, and suggest the divergent reactions to injury may derive from intrinsic differences in the cellular responses at each site.</p

Impact of Precipitants on the Structure and Properties of Fe-Co-Ce Composite Catalysts

Fe-Co-Ce composite catalysts were prepared by coprecipitation method using CO(NH2)2, NaOH, NH4HCO3, and NH3·H2O as precipitant agents. The effects of the precipitant agents on the physicochemical properties of the Fe-Co-Ce based catalysts were investigated by SEM, TEM, BET, TG-DTA, and XRD. It was found that the precipitant agents remarkably influenced the morphology and particle size of the catalysts and affected the COD removal efficiency, decolorization rate, and pH of methyl orange for catalytic wet air oxidation (CWAO). The specific surface area of the Fe-Co-Ce composite catalysts successively decreased in the order of NH3·H2O, NH4HCO3, NaOH, and CO(NH2)2, which correlated to an increasing particle size that increased for each catalyst. For the CWAO of a methyl orange aqueous solutions, the effects of precipitant agents NH3·H2O and NaOH were superior to those of CO(NH2)2 and NH4HCO3. The catalyst prepared using NH3·H2O as the precipitant agent was mostly composed of Fe2O3, CoO, and CeO2. The COD removal efficiency of methyl orange aqueous solution for NH3·H2O reached 92.9% in the catalytic wet air oxidation. Such a catalytic property was maintained for six runs

The Application of CCS Technology in China: Lesson from the Sino-Italy Collaboration on Coal Fired Power Plants

Abstract Carbon Capture and Storage (CCS) technology is one of the most promising technological solutions to realize low-carbon utilization of fossil fuels in a large scale. Under the leadership of the Ministry of Science and Technology (MOST), China and Italy initiated the "Sino-Italy Cooperation on Application of CCS to Coal Fired Power Plants" (SICCS) project which not only promoted CCS technology exchanges and scientific research collaboration between both countries, but also conducted a pre- feasibility study on a full chain demonstration project, including capture of CO2 from coal fired power plant, CO2 transport and storage. This paper will introduce the overall R&D collaboration progress on this project. It first reports activities designed to raise CCS capacity in China and to facilitate the knowledge sharing between Chinese and Italian academe, key outcomes of the SICCS project including the first and second Sino-Italian Scientific Meetings on technology exchange, information sharing, and preliminary feasibility study for CCS demonstration project in China. Then, this paper investigates the preliminary feasibility study of a 1.0 Mt/y carbon dioxide (CO2) capture unit for an existing coal fired power station in China carried out by experts from both China and Italy. The study results obtained with reference to Chinese 600 MWe thermoelectric power plant were compared with those of Italian CCS demonstration project. Finally, this paper concludes main results of the collaboration and preliminary study, raises a new cross-boarder science and technology collaboration mechanism based on industrialization of scientific research cooperation and technology exchange by co-conducting demonstration projects. It also extracts main features of the processes and technologies that may be applied to the demonstrative application of CCS to the 600 MWe unit of Chinese coal power plant

Identification of p38 MAPK as a novel therapeutic target for Friedreich\u27s ataxia.

Friedreich ataxia (FRDA) is an autosomal recessive neuro- and cardio-degenerative disorder caused by decreased expression of frataxin, a protein that localizes to mitochondria and is critical for iron-sulfur-cluster (ISC) assembly. There are no proven effective treatments for FRDA. We previously screened a random shRNA library and identified a synthetic shRNA (gFA11) that reverses the growth defect of FRDA cells in culture. We now report that gFA11 decreases cytokine secretion in primary FRDA fibroblasts and reverts other changes associated with cell senescence. The gene-expression profile induced by gFA11 is remarkably similar to the gene-expression profile induced by the p38 MAPK inhibitor SB203580. We found that p38 phosphorylation, indicating activation of the p38 pathway, is higher in FRDA cells than in normal control cells, and that siRNA knockdown of frataxin in normal fibroblasts also increases p38 phosphorylation. Treatment of FRDA cells with p38 inhibitors recapitulates the reversal of the slow-growth phenotype induced by clone gFA11. These data highlight the involvement of the p38 MAPK pathway in the pathogenesis of FRDA and the potential use of p38 inhibitors as a treatment for FRDA