Table of Content

16 November 2018, Volume 38 Issue 11

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40 YEARS REFORM AND OPENING: THE DEVELOPMENT AND TRANSFORMATION OF CHINAS FINANCIAL SECTOR

WU Xiaoqiu

2018, 38(11):  5-30. 

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After 40 years of the Reform and Opening，Chinas financial sector has undergone significant and profound changes not only in the aspects of the scale, structure, business profile, but also in terms of function, competitiveness and international influence. An accurate, comprehensive and objective analysis of Chinas finance and a summary for the experience of the Chinas past 40 years financial development are important for promoting further Chinas reform and opening in financial area. This paper analyzes the achievement of Chinas financial reform and from which the conclusion can be drawn: the future direction of Chinas financial reform is to construct a modern financial system and a powerful finance for a great nation that can match Chinas economy.

THE CYCLICAL CHANGE LAW OF CHINAS REFORM AND ITS VALUE IN THE NEW ERA

2018, 38(11):  31-38. 

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By reviewing the 40year history of Chinas reform, this paper finds that the reform shows an obvious cyclical change law, and there is a medium cycle and three short cycles. The fundamental reason for the reform of the cyclical change law is that as the adjustment of the production relationship, the reform must follow the law of change in the production relations to adapt to the changes in the development of productive forces. In addition, Chinas reform adopts a gradual reform approach, which makes the changes of production relationship have phased features, and it causes the phased change of productivity development, which forms a high degree of consistency between the reform cycle and the economic cycle. The cyclical change law of reform is of great significance for comprehensively deepening reform in the new era: the downward pressure on the economy is precisely the best window for reform; the reform enters the new cycle, which can breed a new cycle of economic operation; and stimulate the peoples reform passion and vitality. In order to promote the reform of the cyclical movement; strengthen the toplevel design, in order to promote the comprehensive deepening of reform.

AN ECONOMIC ANALYSIS OF THE CHINAS MARKETIZATION PROCESS OVER THE PAST FORTY YEARS——Based on the China Model and the Construction of Chinese Economics#br#

FANG Fuqian

2018, 38(11):  38-45. 

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Over the past 40 years, China has worked hard to make the market mechanism play a decisive role in resource allocation under the conditions of adhering to the basic socialist economic system. The unique connotation of the China model determines that we cannot find the answer in the traditional political economic logic or in the western mainstream institutional change theory. Only by adhering to the realistic analysis method, testing and developing existing theories through the deepening of the phenomenon analyze, can we actively promote the innovation of Chinas economic research paradigm. This paper puts forward the threestage conversion hypothesis of Chinas institutional change mode. That is, the realistic path that a centralized plan economy country can successfully transition to a market economy is the supplyled system at the beginning of reform. The change mode gradually changed to the middle diffusion type system, and with the gradual establishment of exclusive property rights, it finally transitioned to the demandinduced system change mode, thus completing the transition to the socialist market economy system. This proves that Chinas great practice of reform and opening up has presented unprecedented opportunities and challenges for the development of economic theory. The China model is the source of innovation for Chinese economics.

THREE REFORMS OF CHINESE ECONOMIC SYSTEM OVER THE PAST FORTY YEARS

FANG Fuqian

2018, 38(11):  46-54. 

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The Chinese economic system has undergone three revolutions in the past 40 years since the reform and opening up, namely, the rural household contract responsibility system, the reform of stateowned enterprises and the structural reform of the supply side. The household contract responsibility system has realized the separation of the collective ownership of rural land and the management right, and has“evolutionized” the collective production and management system of the peoples commune (the “big pot rice” system). The reform of stateowned enterprises has successively carried out three stages of revolution: the transformation of enterprise identity (the transformation of the relationship between enterprises and the government), the transformation of enterprise management rights and the reform of property rights system, which has transformed the stateowned enterprises from the appendages of the government into one of the microentities of the socialist market economic system. Supplyside structural reform is not only to adjust, optimize and upgrade the economic structure, but also to reconstruct the relationship between the government and the market through further marketoriented reform and government reform. At present, these three revolutions are far from being completed, and we need to step up our efforts to deepen reform and opening up.

DOES ENTREPRENEUR IDENTITY CAUSE EXCESS CAPACITY——Empirical Evidence from China Employeremployee Survey

CHENG Hong,BAI Yun

2018, 38(11):  55-69. 

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Over the years, excess capacity has always been an important obstacle which restricts the economy of China developing towards high quality. Different from the existing literature which explains excess capacity from structural perspective, this paper selects the microscopic perspective which is about CEO coming from the public sector. Using the theory of political relevance, this paper empirically explains the influence of CEO coming from the public sector on excess capacity.Under the control of other factors, the basic regression, with the data from China Employeremployee Survey (CEES), empirically considers that the enterprises whose CEO coming from the public sector have higher degree and marginal probability of excess capacity, which are about 139% and 53% respectively. That is because the enterprises themselves are willing to obtain nonmarket returns through political connections. In addition, endogenous test and the mediating effect model find that compared with the macroscopic structural factors, the influence of CEO coming from the public sector on excess capacity has higher economic significance and overinvestment is one of the important ways of influence during this process. Finally, using the micropanel data of listed companies, the common variance tests further support the main empirical findings of this paper. Therefore, the policy recommendations are as follows: The government should shift the focus of policy from industrial policy to competitive policy and clarify the boundary between the government and

the market by constructing a fair competition market environment, which can prevent CEO to “capture” government resources relying on political connections. Only in this way, can the innovative potential of CEO be fully released and the problem of excess capacity in China be solved from microscopic mechanism.

REGIONAL DIFFERENCES, CONVERGENCE AND INFLUENCING FACTORS OF INCLUSIVE FINANCIAL DEVELOPMENT——Based on Interprovincial Panel Data of China#br#

SUN Yingjie,LIN Chun

2018, 38(11):  70-80. 

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This paper constructs inclusive financial development index based on panel data from 2005 to 2016 in our country, and the convergence and influencing factors are discussed. The conclusion is as follows: First, in the period of the investigation period from 2005 to 2016, the development level of inclusive finance in China is generally low, and there are obvious differences in the development level of inclusive finance in different regions. Second, there is absolute Beta convergence in the national, central and western regions, and there is no absolute Beta convergence in the eastern region. There is a conditional Beta convergence in the national, Eastern and western regions, and there is no conditional Beta convergence in the central region. Third, the degree of government intervention, marketization, human capital quality, informal finance and FDI have an important impact on the development of inclusive finance.

A STUDY ON THE INFLUENCE OF AGRICULTURAL MECHANIZATION FROM THE PERSPECTIVE OF NONAGRICULTURAL EMPLOYMENT

FANG Shile1,WEI Longbao2,WU Junqian3

2018, 38(11):  81-83. 

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This paper used data of 420 prefecturelevel cities in China from 2001 to 2013 and applied urbancountry dual economy theory to study the short run influence and dynamic effect of urbanization on agricultural mechanization. The main conclusions were as follows: (1) In the short run, the relation between urbanization and agricultural mechanization was competitive because of the scarcity of resource. This phenomenon was most obvious in the Chinas Middle Area, where resource is scarce. (2) But in a dynamic perspective, the decrease of rural labor, which was led by Chinas rapid urbanization, promoted agricultural mechanization. (3) As the economy grew, the competitive relation between urbanization and agricultural mechanization in the short run eased, so did the promotion effect in the dynamic view. This paper provided an industrial interaction point of view to study the relation between current rural vitalization strategy and urbanization strategy.

BILATERAL POLITICAL RELATIONSHIP, INSTITUTIONAL QUALITY AND CHINAS OFDI

DAI Liyan1,LI Zhen2

2018, 38(11):  94-105. 

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Using the United Nations general assembly voting data of China and other countries as the proxy variable of bilateral political relationship, this paper investigates the influence of bilateral political relations on Chinas foreign direct investment with the flow data of Chinas OFDI to 89 countries from 2003 to 2015. The empirical results show that Chinas foreign direct investment will be significantly affected by bilateral political relationship. The closeness of political relationship is conducive to the increase of Chinas OFDI. The quality of host country institution can reduce the sensitivity of Chinas OFDI to bilateral political relationship, and the regulation of institution quality can play a role only when Chinas OFDI tend to invest in those countries with higher institutional quality than China. Furthermore, the influence of bilateral political relationship on investment is even more pronounced in the post crisis era and the economic effects of bilateral political relations will also be significantly regulated by the host countries institutional quality during this period. In addition, improving political relations with countries along the “One Belt and One Road” can promote Chinas OFDI.