The role of capital deepening in China's energy transition

This paper provides a theoretical model to explain the causality between China's energy transition and capital deepening found by the empirical study.We prove that in the equilibrium,China's energy transition is endogenously determined by capital deepening due to the homogeneity of electricity and the monopolistic competition features of China's electricity market.Price effect,which is the effect of change in relative factor price,will affect energy transition only if the policy intervenes electricity price in terms of the primary sources from which it is generated.We propose that investment can promote energy transition by stimulating capital deepening which is biased to clean energy development.In this regard,our paper provides a new way of thinking for other developing countries to design an effective energy transition policy.

Guest Editors'Words

This special issue focuses on the challenges facing the Chinese economy in managing the process of economic recovery from the COVID-19 pandemic while achieving its long-term goals of building a modern economy in the new phase of growth and development.

The COVID-19 Pandemic and Its Impact on the Global Economy: What Does It Take to Turn Crisis into Opportunity?

The COVID-19 pandemic broke out at a time when there were heightened uncertainties in the global economy.Understanding these uncertainties provides an important background for analyzing the impact of the pandemic on the global economy,assessing the effectiveness of policy measures in combating the pandemic and reviving the global economy,and predicting the trajectory of the economic recovery in the post-pandemic era.We analyze how COVID-19 would likely deepen an existing malaises in the global economy,and what could be done to address these problems while managing the economic recovery.We argue that three fundamental factors that could lead to a solid recovery in the post pandemic era are structural reform,new technology and re-integration.They could be managed by instituting a new"global social contract."Supported by strong public policies at all levels,especially at national level,these three factors could bring about the salvation of the global economy as it recovers or re-emerges from the pandemic crisis.

Inequality of Opportunity in China's Labor Earnings: The Gender Dimension

This paper investigates the inequality of opportunity in China's labor earnings,defined as the component of inequality determined by personal circumstances that lie beyond the control of an individual,of which gender is one,as opposed to the component determined by personal efforts.Using the Survey of Women's Social Status in China (2010),we measure the share of inequality of opportunity in the total inequality of individual labor earnings for people aged 26-55 years,and separately for six birth cohorts and for female and male subsamples.Gender is revealed as the single most important circumstance determining nationwide individual labor earnings,with one's region of residence, father's occupation,father's education,birth cohort and holding rural or urban hukou also playing significant roles.A further investigation into the roles of circumstances and personal efforts (including education level,occupation,Communist Party membership, migration and marital status)confirms that circumstances play.an alarmingly high role in shaping labor earnings distribution in China,and reveals notable gender differences that cannot be attributed to personal effort alone.These results provide the basis for recommending ways to improve gender equality of opportunity in the future.

Role of Institutional Quality in Determining the R&D Investment of Chinese Firms

This study adds to the understanding of China ＂s innovation prospects by examining how variations in institutional quality within China impact on the R ＆D efforts of firms located in different provincial regions. In the process of identifying the effect of institutional quality, the roles of other factors such as ownership types and market structures are revealed, which provides interesting insight into firms ＂ R＆D behavior. The key findings suggest that institutional quality positively affects the decision offirms to engage in R＆D activities. Once firms start to engage in R ＆D, the subsequent expansion of firm-level R ＆D intensity depends on factors such as market structure. Therefore, strengthening domestic institutional quality is the first critical step towards the goal of building a knowledge-intensive economy in China. Efforts to nurture market development are also important for achieving this goal.

International Trade and R＆D Investment： Evidence from Chinese Manufacturing Firms

A current concern for China＇s long-term growth prospect is whether China can become an innovative economy and achieve industrial upgrading to compensate for the gradually declining competitiveness resulting from low-cost labor. The present study examines this issue by exploring how trade participation impacts on the R ＆D investment of manufacturing firms through various channels. Merging China ＂s Annual Manufacturing Survey Dataset and the Chinese Customs Dataset allows us to study such a relationship at the individual firm level. The empirical results suggest that channels such as geographical diversification of export markets, share of imports from high-income countries, average unit value of imports, number of intermediate goods and capital goods imports, and the trade regime are significant factors that influence firm-level R＆D investment. The study discusses the policy implications of the empirical findings in relation to industrial and trade policies that may be potentially beneficial for China＇s transition towards an innovative economy.

Determinants of Intangible Investment and Its Impacts on Firms＇ Productivity： Evidence from Chinese Private Manufacturing Firms

Using data from the 2012 China Enterprise Survey conducted by the World Bank, this study examines the determinants of intangible investment by private manufacturing firms and its impacts on firms ＇productivity in China, thus shedding light on the recent development of intangibles in one of the largest emerging economies in the world. Higher human capital, larger firm size and better institutional quality are found to increase the propensity and the amount of intangible investment, yet fiercer market competition generally decreases both the propensity and the amount invested in intangibles. We provide evidence that the disaggregated components of intangibles are positively correlated with firm productivity and there is complementarity between software and organization investment. Implications for policies to enhance investment in intangibles are identified from the empirical results.

Did the Labor Contract Law Affect the Capital Deepening and Efficiency of Chinese Private Firms?

Since the implementation of the Labor Contract Law (LCL) in 2010, a significant increase in the capital/labor ratio, known as capital deepening, has occurred in private firms in China. However, the cause and impact of the capital deepening is still in question, as either technological change or a higher cost of labor might cause it. Using data from the Chinese Private Enterprise Survey in 2008 and 2012, two critical findings are reported in this study. First, pension coverage significantly affected the capital/labor ratio in private firms after 2010. Second, large private firms are able to generate higher total factor productivity after the implementation of the LCL because they can adjust their production function more easily than smaller competitors. These findings have policy implications for reforms in the Chinese labor market.

Photonic generation of switchable multi-format linearly chirped signals

A compact and cost-effective photonic approach for generating switchable multi-format linearly chirped signals is proposed and experimentally demonstrated.The core component is a dual-drive Mach–Zehnder modulator driven by a coding sequence and a linearly chirped waveform.By properly setting the amplitudes of the coding sequence,a linearly chirped signal with different formats,including the frequency shift keying[FSK],phase shift keying[PSK],dual-band PSK,and FSK/PSK modulation formats,can be generated.Experiments are conducted to verify the feasibility of the proposed scheme.Linearly chirped signals with the above four formats are successfully generated.The scheme features multiple formats and high tunability based on a compact structure,which has potential applications in modern multifunctional systems.