Table of Content

16 December 2020, Volume 40 Issue 12

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NEW DEVELOPMENT STAGE AND THE CONSTRUCTION OF MODERN FISCAL AND TAX SYSTEM

DENG Liping

2020, 40(12):  4-12. 

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Under the background that China is entering the new development stage of embarking on a new journey to fully build a modern socialist country, this paper reviews the fiscal and tax reform experiences since the 18th CPC National Congress, verifies the goal of the 14th FiveYear Plan and the LongRange Objectives through the Year 2035, and studies the current requirements of deepening fiscal and tax system reform in the new development stage. It is elaborated mainly from five aspects: deepening the reform of budget system, rationalizing the relationship between central and local governments, optimizing modern tax governance, improving debt management system and promoting the construction of fiscal and tax law. By grasping the development trend and basic direction of China's fiscal and tax reform, this paper strives to provide strong support for the construction of modern fiscal and tax system.

THE IMPACT AND THE MECHANISM OF INFRASTRUCTURE ON CHINA'S ECONOMIC GROWTH——An Extended Barro Growth Model

FANG Fuqian, TIAN Ge, XIAO Han

2020, 40(12):  13-27. 

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The infrastructure can directly promote economic growth as special capital stock, and indirectly promote economic growth by promoting investment and labor (increasing the quantity of production factors) and increasing the marginal productivity of capital and labor (improving the efficiency of production factors). This paper constructs an extended Barro economic growth model, and tests the two mechanisms by using China's provincial panel data from 1992 to 2016 and the intermediary effect model. The results show that the infrastructure can promote economic growth. But there exists heterogeneity in transportation, energy and communication infrastructure and in the time before and after the financial crisis in 2008. The direct effect shows a dynamic upward trend, while the intermediary effect decreases gradually. This paper further uses the nonlinear model to test the reasons of the heterogeneity. The results show that the promotion effect of infrastructure on economic growth in China is mainly scale expansion, quantity or extensionstyle, not quality or connotationstyle. The total effect of energy and communication infrastructure on economic growth has scale effect, while the scale effect of transportation infrastructure is not significant. However, transportation infrastructure also has a continuous promoting effect on economic growth, which shows that there is still a large investment potential for these three types of infrastructure in China, and the key is to improve the efficiency of production factors through infrastructure construction.

FISCAL IMBALANCES AND THE EQUALIZATION OF URBANRURAL PUBLIC SERVICE IN CHINA: A THEORETICAL ANALYSIS AND AN EMPIRICAL TEST

ZHANG Fan, WU Junpei, GONG Min

2020, 40(12):  28-42. 

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This paper analyzes the fiscal relationship between central and local governments based on the centrallocal fiscal imbalance under the taxsharing fiscal system in China. Provincial level panel data is integrated with SYSGMM to analyze the effect of the fiscal gap and the centrallocal governments fiscal imbalance on the equalization of basic public services in urban and rural areas. The results show that the existence of the fiscal gap in the local governments is not conducive to improving the level of equalization of basic public services in urban and rural areas. However, transfer payment, which is the main mechanism to make up the fiscal gap and to balance the centrallocal fiscal imbalance, has a significant incentive effect for local governments to reduce the degree of urbanrural equalization. In addition, although higher level of transfer payment and special transfer payment can improve the supply of basic public services in urban and rural areas, the effectiveness of this supply incentive mechanism will be greatly reduced within the framework of the taxsharing fiscal system in China.

THE IMPACT OF URBAN INVESTMENT BONDS ON REGIONAL OVERCAPACITY: PROMOTION OR SUPPRESSION

LI Fuyou, WANG Yunliang

2020, 40(12):  43-55. 

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Based on the theory of urban investment bonds affecting overcapacity and taking the panel data of prefecturelevel cities in China from 2004 to 2016 as a sample, this paper examines the specific effects and related mechanisms of urban investment bonds on overcapacity. The results show that: there is a “Ushaped” relationship between urban investment bonds and regional overcapacity; and the impact of urban investment bonds on overcapacity is more significant in the central and western regions, the southern regions, large cities and in postfinancial crisis era. Mechanism analysis shows that local governments use urban investment bonds to lower the price of industrial land and to invest in transportation infrastructure to increase excess capacity, and the effect of lowering the price of industrial land is even more serious. Therefore, this paper proposes corresponding suggestions in moderately controlling debt scale, ameliorating system incentive measures and improving factor pricing mechanism.

MEDIA SENTIMENT AND HOUSING PRICE VOLATILITY

KUANG Weida, ZHANG Sihan, ZHANG Zhang

2020, 40(12):  56-68. 

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Employing the monthly data of media coverage and housing price indices of 112 large and medium cities in China from 2000 to 2015, this paper studies how heterogeneous media sentiments influence housing price volatility. The results show that the influence of newspaper sentiments on housing price volatility is greater than that of internet media sentiments, the national newspaper sentiments have greater effects than local newspaper sentiments, and the certified blogger sentiments have greater effects than uncertified blogger sentiments. The tone and length of media coverage positively affect housing price volatility. Finally, the media sentiments have greater effects in the firsttier cities than in other cities. Therefore, to prevent irrational housing price volatility, different media coverage should be regulated differentially.

THE INTERNATIONAL CONVERGENCE OF ACCOUNTING STANDARDS AND THE BELT AND ROAD INITIATIVE——From the Perspective of China's OFDI to the Countries

ZHANG Bo, HAN Yadong, XU Jingchang

2020, 40(12):  69-82. 

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This paper first compiles the data of accounting standards adopted in the countries and regions along the Belt and Road. Next, this paper investigates the impact of the similarities in accounting languages on Outward Foreign Direct Investment (OFDI) for countries and regions along the Belt and Road. This paper uses the convergence of international financial reporting standards to measure the similarity of accounting languages and finds that similar accounting languages promote China's OFDI to the countries and regions along the Belt and Road. Besides, this paper documents that the impact of the accounting similarity is more pronounced after the Belt and Road Initiative. Furthermore, the results suggest that reduced information asymmetry is the potential mechanism through which converging accounting standards affect OFDI. This study provides direct evidence on the impact of accounting on advancing the development of the Belt and Road Initiative. The results show that accounting language plays an important role in advancing national and global economic development. The findings of this paper provide new evidence for the research of the convergence of international financial reporting standards and the Belt and Road Initiative.

ENVIRONMENTAL LEGISLATION AND FIRM'S EXPORT DOMESTIC VALUE ADDED

YANG Ye, XIE Jianguo

2020, 40(12):  83-99. 

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This paper uses theoretical modeling and empirical data to study the relationship between environmental legislation control and the domestic valueadded rate of Chinese firm's exports. It turns out that environmental legislation and control can help increase the domestic valueadded rate of Chinese firms' exports. Mechanism analysis proves that, on the one hand, the “cost effect” of strengthening environmental legislation control makes directly constrained companies look for other alternative elements. The magnitude of this substitution effect depends on the degree of dependence of the company on polluting resources. The “innovation effect” affects the cost bonus of firms by changing the production efficiency. Both effects affect the domestic valueadded rate of exports. On the other hand, environmental legislative control increases the lower bound of the productivity of domestic firms exporting to foreign markets, and makes indirectly restricted firms change their prices, which in turn acts on the domestic valueadded rate of exports. Expansion studies show that strict regional law enforcement will help expand the positive impact of environmental legislation and control on the domestic valueadded rate of exports of firms with a low degree of dependence on polluting resources.

TRANSFORMATION AND UPGRADING OF MANUFACTURING AND HIGHQUALITY ECONOMIC DEVELOPMENT——A Research Based on Total Factor Energy Efficiency

XU Guangqing, DENG Xu, CHEN Xiaoyu

2020, 40(12):  100-110. 

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The gradual substitution of sectors with higher Total Factor Energy Efficiency (TFEE) for those with lower one is a manifestation of the shift from the old growth driving force to the new one in the manufacturing, and is also the core of promoting highquality economic development. Taking nondesirable output into consideration, this paper constructs the Slack Based Measure (SBM) to study the TFEE of various sectors from 2009 to 2016, and then calculates the Global MalmquistLuenberger (GML) index and its decomposition. The following conclusions are drawn: (1) Sectors with higher TFEE are new manufacturing, which is the new growth driving force to substitute traditional manufacturing. (2)The calculation based on the GML index shows that the technological progress and technological efficiency of most sectors are rising, while the scalerelated technological scale and scale efficiency are decreasing. (3) The combination of the SBM model and the GML index shows that the TFEE and its cumulative change have a high consistency, and the sectors above the line are mainly the new manufacturing, which have the larger cumulative change value of TFEE and have the potential to increase their TFEE over time. This further verifies that some of the old growth driving forces have been replaced by new ones in China's manufacturing. More replacements will occur in the near future.