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Current issues in the Chinese economy
China Economic Review 13 (2002) 329 – 330
Editorial
Current issues in the Chinese economy 1. Roundtable: current issues in China’s economy In this issue, the China Economic Review continues its practice of publishing a roundtable in its last issue of the year. I invited 11 scholars on the Chinese economy to write short articles on current issues in the Chinese economy. Responses from our readers to the roundtables we have included in the last two volumes have been overwhelmingly supportive, and our last roundtable was also cited several times in the popular business press (see Economist, 2002) because of its arguments that China’s GDP growth rate was overstated. Papers in the roundtable go through an editorial process, but not through the standard referee process, both because of the need for timely writing and the fact that these are invited, not submitted, papers. However, you will find them very accurate, useful, and current. Students and nonspecialists should also find them to be more accessible. Our first three papers in the roundtable consider the problem of China’s worsening income inequality. Dennis Tao Yang provides some history on the sectoral and regional biases that have caused a lack of convergence between China’s provinces. Gene Hsin Chang, a fellow coeditor here at the journal, argues that the primary cause of inequality is the urban – rural gap, and while this gap is not closing, there is no hard evidence that it is widening either. Arguing against a transfer scheme, he argues that the solution to the problem is ultimately the absorption of China’s rural surplus labor into a growing, urbanized economy. Mary-Franc˛oise Renard, however, takes a somewhat more pessimistic view, arguing that regional inequality has widened, and that neither market forces nor government policy is effectively addressing what could become a very serious problem. Next, we have two papers on the rural economy, with its 900 million residents, and, in particular, whether the incomes of China’s 300 million farmers will be adversely affected by China’s accession to the World Trade Organization. Scott Rozelle, along with his coauthors Jikun Huang and Linxiu Zhang, takes a generally optimistic view toward the rural economy. While current rural incomes are low, there exist a number of trends that are consistent with the initial stages of agricultural modernization and transition. Shujie Yao, however, considers a slightly more pessimistic view. While China’s growth performance has been spectacular, the rural sector has shown much slower income growth since 1985, and there are a number of factors, such as surplus labor, environmental damage, and the WTO, which will constrain rural economic growth. In our third group of papers, we have four papers focusing on China’s financial climate. Thomas G. Rawski, who organized our last roundtable, considers whether the system of investment contributes to or detracts from continued economic growth. After reviewing both macroeconomic and microeconomic perspectives, he concludes that there is enormous waste of potential in China’s investment behavior, and that it has become the Achilles heel of the Chinese economy. We are grateful to have Mariko Watanabe contribute with a Japanese scholar’s view of 1043-951X/02/$ – see front matter D 2002 Elsevier Science Inc. All rights reserved. PII: S 1 0 4 3 - 9 5 1 X ( 0 2 ) 0 0 0 8 7 - 1
330
Editorial
China, since there is good scholarship there on China’s economy that Americans rarely see. Dr. Watanabe writes about the recent explosion in holding companies as a form of state-owned corporate structure, and the surprising risks and lack of accountability she finds there. Yiping Huang, who has recently written a book on China’s banking system (see Huang, 2001, and my review of it in Parker, in press), expresses a cautious optimism about China’s recent banking reforms, and the prospects for China’s banking system surviving China’s accession to the WTO without a financial collapse. Wing Thye Woo, a coauthor of one of the papers in this issues symposium, also contributes a piece on China’s potential for a financial crisis. He also argues that a financial collapse is not an imminent result of China’s WTO accession, though he points out several serious and more likely problems that could result from current problems in China’s banking sector. Finally, our last two papers consider broader issues. Gary H. Jefferson considers whether China’s international agreements may effectively constrain the government’s actions towards the property rights of its citizens and its firms, and thus form the basis of an implicit economic constitution. And in a meditation on the evolving political relationship between the United States and China, Bruce L. Reynolds, the former editor of this journal, argues that economic reform can and should continue to improve this most important bilateral relationship.
2. Symposium: urbanization in China This past year, Gene Hsin Chang worked with Aimin Chen, the former president of the Chinese Economists Society (CES), to edit four selected papers originally presented at a CES Conference held in June 2001. This conference was held in Xiamen, China, and entitled, ‘‘Urbanization in China: Challenges and Strategies of Growth and Development.’’ These papers have all gone through a subsequent referee process pursuant to their publication here, and Aimin Chen provides an introduction to the papers later in this issue. We hope you find the scholarship in both the roundtable and the symposium interesting and educational. We appreciate your continued support as we work to make the China Economic Review the best source for economic research on the world’s fastest growing economy.
References Economist (2002, March 16). How cooked are the books? 362 (8264), 45 – 46. Huang, Y. (2001). China’s last steps across the river: enterprise and banking reforms. Canberra, Australia: Asia Pacific Press. Parker, E. (in press). Yiping Huang—China’s last steps across the river: enterprise and banking reforms. China Review International.
Elliott Parker
Editorial
Current issues in the Chinese economy 1. Roundtable: current issues in China’s economy In this issue, the China Economic Review continues its practice of publishing a roundtable in its last issue of the year. I invited 11 scholars on the Chinese economy to write short articles on current issues in the Chinese economy. Responses from our readers to the roundtables we have included in the last two volumes have been overwhelmingly supportive, and our last roundtable was also cited several times in the popular business press (see Economist, 2002) because of its arguments that China’s GDP growth rate was overstated. Papers in the roundtable go through an editorial process, but not through the standard referee process, both because of the need for timely writing and the fact that these are invited, not submitted, papers. However, you will find them very accurate, useful, and current. Students and nonspecialists should also find them to be more accessible. Our first three papers in the roundtable consider the problem of China’s worsening income inequality. Dennis Tao Yang provides some history on the sectoral and regional biases that have caused a lack of convergence between China’s provinces. Gene Hsin Chang, a fellow coeditor here at the journal, argues that the primary cause of inequality is the urban – rural gap, and while this gap is not closing, there is no hard evidence that it is widening either. Arguing against a transfer scheme, he argues that the solution to the problem is ultimately the absorption of China’s rural surplus labor into a growing, urbanized economy. Mary-Franc˛oise Renard, however, takes a somewhat more pessimistic view, arguing that regional inequality has widened, and that neither market forces nor government policy is effectively addressing what could become a very serious problem. Next, we have two papers on the rural economy, with its 900 million residents, and, in particular, whether the incomes of China’s 300 million farmers will be adversely affected by China’s accession to the World Trade Organization. Scott Rozelle, along with his coauthors Jikun Huang and Linxiu Zhang, takes a generally optimistic view toward the rural economy. While current rural incomes are low, there exist a number of trends that are consistent with the initial stages of agricultural modernization and transition. Shujie Yao, however, considers a slightly more pessimistic view. While China’s growth performance has been spectacular, the rural sector has shown much slower income growth since 1985, and there are a number of factors, such as surplus labor, environmental damage, and the WTO, which will constrain rural economic growth. In our third group of papers, we have four papers focusing on China’s financial climate. Thomas G. Rawski, who organized our last roundtable, considers whether the system of investment contributes to or detracts from continued economic growth. After reviewing both macroeconomic and microeconomic perspectives, he concludes that there is enormous waste of potential in China’s investment behavior, and that it has become the Achilles heel of the Chinese economy. We are grateful to have Mariko Watanabe contribute with a Japanese scholar’s view of 1043-951X/02/$ – see front matter D 2002 Elsevier Science Inc. All rights reserved. PII: S 1 0 4 3 - 9 5 1 X ( 0 2 ) 0 0 0 8 7 - 1
330
Editorial
China, since there is good scholarship there on China’s economy that Americans rarely see. Dr. Watanabe writes about the recent explosion in holding companies as a form of state-owned corporate structure, and the surprising risks and lack of accountability she finds there. Yiping Huang, who has recently written a book on China’s banking system (see Huang, 2001, and my review of it in Parker, in press), expresses a cautious optimism about China’s recent banking reforms, and the prospects for China’s banking system surviving China’s accession to the WTO without a financial collapse. Wing Thye Woo, a coauthor of one of the papers in this issues symposium, also contributes a piece on China’s potential for a financial crisis. He also argues that a financial collapse is not an imminent result of China’s WTO accession, though he points out several serious and more likely problems that could result from current problems in China’s banking sector. Finally, our last two papers consider broader issues. Gary H. Jefferson considers whether China’s international agreements may effectively constrain the government’s actions towards the property rights of its citizens and its firms, and thus form the basis of an implicit economic constitution. And in a meditation on the evolving political relationship between the United States and China, Bruce L. Reynolds, the former editor of this journal, argues that economic reform can and should continue to improve this most important bilateral relationship.
2. Symposium: urbanization in China This past year, Gene Hsin Chang worked with Aimin Chen, the former president of the Chinese Economists Society (CES), to edit four selected papers originally presented at a CES Conference held in June 2001. This conference was held in Xiamen, China, and entitled, ‘‘Urbanization in China: Challenges and Strategies of Growth and Development.’’ These papers have all gone through a subsequent referee process pursuant to their publication here, and Aimin Chen provides an introduction to the papers later in this issue. We hope you find the scholarship in both the roundtable and the symposium interesting and educational. We appreciate your continued support as we work to make the China Economic Review the best source for economic research on the world’s fastest growing economy.
References Economist (2002, March 16). How cooked are the books? 362 (8264), 45 – 46. Huang, Y. (2001). China’s last steps across the river: enterprise and banking reforms. Canberra, Australia: Asia Pacific Press. Parker, E. (in press). Yiping Huang—China’s last steps across the river: enterprise and banking reforms. China Review International.
Elliott Parker