How China＇s Fiscal Policy Contributes to Investment and Economic Growth： Experience and Lessons

This paper （1） discusses how the two indicators used in official statistics of China, namely total investment in fixed assets and the gross fixed capital formation, reflect changes infixed asset investment and their relationship, （2） analyzes the growth of fixed asset investment and its contribution to changes of economic growth rate since the reform and opening-up, and （3） explains how fiscal policy impacts the growth of fixed asset investment and analyzes in detail the impacts of the two rounds of contractionary fiscal policy, two rounds of expansionary fiscal policy and one round of neutral fiscal policy on China＇ s fixed asset investment growth since reform and opening-up using full and accurate data. Practice shows that the impact of fiscal policy on China＇ s fixed asset investment is direct and obvious, yet sometimes too drastic. In the future, fiscal policy should be used in alignment with other economic policies with appropriate intensity and timing so that it will help stabilize the growth of fixed asset investment.

Validity of the Africa-wide Lang factor of 2.63 for estimating small biogas plant installation costs in Uganda

There is an increasing interest in popularizing small biogas plants to meet the bulk of domestic energy needs in Africa for cooking,lighting,and other activities such as cooling or refrigeration.As stakeholders(policy makers,donors,credit providers,sector experts,and product development professionals)contemplate programs,one of the key questions to which a reliable answer is needed is biogas plant installation cost that may vary from region to region.An Africa-wide materials’cost multiplier factor(Lang factor of 2.63)estimation approach has been proposed,based on data from only two locations.The factor’s validity throughout Africa has been questioned.This study shows that the Africa-wide Lang factor of 2.63 is applicable in Uganda.However,differences in accuracy have been observed based on whether the installation is located in a rural or urban setting.Location-specific factors of 2.984 and 2.404 for rural and urban locations were established and validated,respectively,which produced more accurate estimates in comparison with a single composite non-location specific factor.

Effects of China’s VAT system transition on firms’investment and employment——Empirical evidence from the national tax surveys of 2008-2009

Based on a theoretical analysis,this paper empirically studies the effects of China’s VAT system transition in 2009 on the Chinese firms’fixed capital investment and employee recruitment by using the data of National Tax Survey from 2008 to 2009 for the first time.The main findings are as follows.(1)The transition stimulates investment in some industries like Petrochemical,Electricity,and Equipment Manufacturing,but Automotive Industry and Extractive Industry are exceptional.(2)The transition impedes the growth of employment in the Processing Industry for Agricultural Products and the Petrochemical Industry,but has improved the employment situation in Electricity and Automotive industries.The prosperity and marketization degree of industries are key factors that determine the effects.Our findings show that the effects of China’s VAT system transition vary amongst different industries,which imply that when implementing the VAT-related reforms like the reform program to replace business tax with VAT,the Chinese government should design relevant institutions with regard to the macroeconomic environment and differences in industries,and gradually put reform measures into practice.