Rationale and Pathway for New Industrialization in the Context of Chinese Modernization

The concepts of modernization and industrialization have different connotations that are specific to their historical backgrounds,and their theoretical innovation and development may benefit from China’s experiences.Industrialization is the cornerstone of modernization,and holds the key to its success.China’s experiences in blazing a new trail of industrialization are challenging the traditional Western theory of industrialization and deepening the connotations of Chinese modernization.New industrialization is a key entry point for steering China’s modernization drive and theoretical innovations.This paper offers an overview of the theory of Chinese modernization and its evolving trend along China’s socialist industrialization path,as well as the rationale and pathway for new industrialization in the context of Chinese modernization.As our findings suggest,the new industrialization concept has taken hold in every key aspect of Chinese modernization.When combined with the theory of Chinese modernization,the theoretical implications of new industrialization play a crucial role in propelling Chinese modernization forward along a new journey in the new era.

Connected Advantage Interlinked supply chains are good for both China and the rest of the world

As both a beneficiary of global supply chain integration and a contributor to the creation of a new supply chain ecosystem,China is of immense importance to the growth of international supply chains.For example,it’s manufacturing industry is indispensable across every stage of the global supply chain from raw material to intermediate goods production and the assembly of finished products.And with a large consumer base,China has been the place where global goods and services are consumed.

Improving the Equity and Sustainability of the Social Protection System

The segmentation of the social protection system in China renders the system not only inequitable but inefficient.Those employed in the public sector,particularly civil servants,are＂overprotected＂,while workers in the non-public sector,especially farmers and rural migrant workers,are＂under-protected＂.The segmented pension system impedes labor mobility while increasing administrative costs.Policies aimed at developing the new rural cooperative medical system and new rural old-age insurance scheme,as well as policies aimed at encouraging migrant workers to participate in urban social insurance programs,help improve the equity of social protection.Howere,competition between different local governments to win the ＂welfae crown＂ and the heavy brden placed on local finance caused by welface overspending has been hurting the sustainability of social protection programs.The following measures are suggested to address these problems;First,cease using social insurance coverage as an indicator of work performance for government officials;second,enhance the responsibility of the central government in social expenditure while increasing public transfers to less-developed regions in order to improve social assistance and merit goods provision;third,integrate or reorganized various sgements into one entity under each insurance program,with the purpose of eventually eliminating the segmentation problem in China＇s social protection system.

The Centenary of the CPC:Socialist Industrial Development and Historical Experience

Socialist industrialization in a populous agrarian country like China is a complex,arduous,and long-term task.Under the leadership of the Communist Party of China(CPC),the Chinese people have initiated a new way of socialist industrialization suitable to China’s national conditions after assiduous efforts.Brilliant achievements of historic importance have been made in China’s industrial development.In just a few decades,China completed an industrialization process that took centuries in the developed world and established the world’s most complete modern industrial system,becoming the second-largest economy and the largest manufacturing nation in the world.This achievement is of great historic and worldwide significance.Over its centennial history,CPC has completed the historic task of opposing imperialism and feudalism during the New Democratic Revolution,which created political conditions essential for the nation’s socialist industrialization.During this socialist revolution and development,the CPC has led the nation to build complete industrial and economic systems.In the era of reform and opening up and socialist modernization,the CPC has led the nation to industrialize and become the equal of more advanced economies.In the new era of Chinese socialism,the CPC has led the nation to accomplish the goal of building a moderately prosperous society in all respects and pursuing high-quality industrial development.China’s industrial achievements can be attributed to the following factors:First,the CPC’s strong leadership,adherence to its founding aspiration and unwavering commitment to socialist industrialization;second,the application of the Marxist principles taking into account China’s actual conditions;third,proactively exploring and following the laws of industrialization for China as a large country and keeping industrial development in alignment with evolving conditions.

The environmental effect of technical change:A spatial model with city-level data in China

This paper studies the environmental effects of technical change using a spatial model with panel data from 284 prefecture-cities over 2004-2015 in China.We find that the effects of technical change vary across different dimensions of technical change and different pollution indicators.Furthermore,we also provide robust evidence for the existence of the spatial effects of technical change on environmental pollution across cities.First,indigenous technical change displays three patterns of effects on the four pollutants:a positive effect on wastewater,a negative effect on PM_(2.5)concentrations,and an inverted U-shaped relationship with SO_(2)and soot emissions.The spatial effect of indigenous technical change promotes cleaner industrial productions(fewer emissions of SO_(2),soot and wastewater)but higher PM_(2.5)concentrations.Second,technology transfers from foreign direct investment are associated with less pollution except for wastewater,and their spatial effects are unanimously negative on all pollutants.Finally,absorptive capacity can also promote cleaner industrial production,but its spatial effects can do otherwise.Accordingly,the government should take the spatial spillover effects of technical change into account when implementing specific policies,pin down specific pollutants to make full use of the pollution-reducing effects of technical change,and improve the absorptive capacity of domestic firms.

How Should China Handle Trade-offs between Growth and Inflation?

This article first presents an analysis of the two most important macro variables: inflation and growth. In respect to inflation that faces a daunting landscape at the present time, China can still hold the inflation rate at an appropriate level in 2008. In consideration to a world economic slowdown and primary goods price trends as well as domestic price hikes and production overcapacity, inflation should be able to be kept in check in 2008. In regards to growth, this article employs the Phillips curve equation to arrive at a potential growth rate of 9.4% for China in 2008. Over the next couple of decades, however, the potential growth rate is projected to decline. Subsequently, this article discusses the challenges facing the tightening monetary policy: the trade-off between growth and inflation, the quagmire of liquidity control, the different interest rate movement episodes of China and the Unites States at different stages of economic cycles, and the temporary expediency nature of taming inflation through currency appreciation. Nevertheless, monetary policy still has a positive role to play and China should remain steadfast in pursuing monetary austerity policies. Last but not least, the article presents an outlook for the future.

Crossing the Growth Threshold： Service-Based Economy, Knowledge Process and Reshaping of Efficiency Model

The transition from middle-income to high-income stage is fraught with risks of growth divergence. Economic transition is clouded by the following possibilities： （1）falling share of industrial seetor through industrial depression and weakening growth momentum caused by the large urbanization costs; （2） the subordination of service sector as a result of nearly irreversibly industrial professional, which falters the process of service sector transition and upgrading,＂ （3） inefficient knowledge production allocation and human capital upgrade due to the absence of incentivized compensation of knowledge consumption. We suggest that a country should reshape its efficiency model by upgrading knowledge factor and human capital as the pre-requisite. Given the dilemmas of transition, China should take the faetorization trend of service sector and reshape efficiency model through institutional reform, ensuring that service sector will develop in tandem with industrial sector.

Trends on Rural Household Net Income Structure Based on Surveys of Baoding Villages from 1930-1998

Using the rural survey data preserved by the Chinese Academy of Social Sciences＇ （CASS） Institute of Economics, this paper analyzes changes in the level and structure of per capita net income in the eleven villages of Baoding Prefecture, Hebei province, over the 1930-1997periods. According to the surveys, per capita net income level of the villages maintained consistent growth, as indicated by survey data on the years of 1930, 1936, 1957, 1986 and 1997, except for 1946 which saw decline, and enjoyed rapid growth particularly in the years of reform and opening-up after 1986. The changes reflect the national trendsustained decline of the proportion of net income from household operations versus eontinuous growth of the proportion wages income takes of the whole income.

The Evolution of China’s National Innovation System During the 40 Years of Reform and Opening Up

From the perspective of economic system transformations and scientific and technological system reforms, this paper investigates the evolution of China’s national innovation system (NIS) during the 40 years of reform and opening up. It concludes that China’s NIS has evolved from weak to strong, from a follower groping its way onto the track of independent innovation with Chinese characteristics. China’s innovation system has experienced a trajectory from “introduction and imitation of complete sets of technology” to “market for technology and imitative innovation,” to “integrated and secondary innovation” and on to “integrated, secondary, collaborative and original innovation combined.” The path of independent innovation with Chinese characteristics is a natural choice of economic, societal, and technological development in the new era.

Strategic Perspectives on China's New Round of Tax Reform

China's current tax structure is seriously out of balance.It is dominated by indirect tax primarily paid by firms,and the share of direct tax is limited and the share of direct tax paid by households and individuals is still more limited.In order to achieve a more equitable distribution of the tax burden,the tax reform initiated by the Third Plenum of the 18 th CPC Central Committee mandated increasing the direct tax and reducing the indirect tax as key priorities to improve China's tax structure.

Establishment of a New Spatial Agglomeration of an Open Economy:Theoretical Basis,Historical Practice and Feasible Pathways

The new spatial agglomeration of an open economy should conform to the spatial agglomeration theory of the new economic geography and the characteristic conditions of the Chinese population,follow the historical practice and development trend of the spatial agglomeration of China’s open economy for the past 40 years since reform and opening up,fit the transformation of the development status and goals of the Chinese economy,and fulfill the requirements of the new era brought about by the new trends of economic globalization.It is necessary to guide the open economy towards a proper clustering in the central and western regions and accelerate the regional opening up.Meanwhile,in order to promote the proper distribution of production factors and the coordinated development of an open economy,we should facilitate the spatial optimization distribution of production factors by employing the comparative regional advantages and endowments,thereby improving the international competitiveness of China’s open economy.

The rise of emerging powers and the BRICs’ chase to catch up

The rise of great powers is a universal phenomenon in global economic development. However, at different times countries' rises are accompanied by different tendencies and characteristics. With the BRICs as representatives, the rise of emerging super powers has become a new trend in global economic development in recent decades. What is the difference between the rise of these super-economies and those in the past? In what ways can China's revival be inspired? These are both theoretically and pragmatically significant questions.

More children nutrition distribution, less labor incentive: Evidence from Chinese collective agriculture

Distribution system will affect the labor incentive that has been heatedly discussed by recent literatures.Using a unique micro dataset, this paper dem on strates that the equalitaria n distributi on system is one of the reas ons for the in sufficie nt labor incentive during the Chinese Collective Agriculture period. Specifically speaking, in the distribution of basic rations, the proportion for children (aged 1-3 and 4-7 years) was often beyond their nutrition demand, resulting the dissatisfaction of other families with more laborers and less children, thus these households will reduce their labor supply gradually. At the same time, the existence of outstanding accounts makes it a failure to use work points to buy distributions, which is the mechanism of the distribution system and insufficient labor incentive. All the results have been accepted by the robustness tests. The study will help to understand the distribution system and labor incentive, as well as the failure of the Chinese collective agriculture.

Chinese Business Cycles Identified by Coincident Indexes

In reference to the method of the Conference Board,the coincident indexes for China are constructed from a sample period between January 1990 and May 2012 and by51 chosen component indicators.The resulting coincident indexes have higher correlations with gross domestic product(GDP) growth rates than the China Economic Monitoring and Analysis Center(CEMAC) coincident index over the sample period between February2005 and May 2012.The peaks and troughs of the growth rates in several indicators are identified.The total number of peaks and troughs in the resulting coincident index is the same with the CEMAC coincident index.Unfortunately,these troughs don't signify recessions in the Chinese economy because the financial system has not seen a negative growth rate over the specific sample periods.The impacts of the Southeast Asian Financial Crisis and subprime mortgage crisis on the business cycle could be dated via a smoother index from HP filtering to the coincident index.

Vertical Spillover Effects of Multinationals on Chinese Domestic Firms via Supplier-Customer Relationships

Foreign direct investment （FDI） can benefit domestic firms in the host country. Using firm- level data for China, we find statistically positive vertical spillover effects of multinational enterprises on the performance of domestic firms through backward and forward supplier- customer relationships. The spillover effects are mainly from large multinational enterprises and are greater for state-owned firms and in poor regions. Our results are robust for both parametric regression and nonparametric matching techniques. Our findings have strong policy implications： while regulations relating to building business relationships with domestic firms when seeking foreign direct investment should be established, such policies should be aimed at private firms, big multinationals and less developed regions.

Empirical Analysis of Wealth Distribution Disparity of Chinese Residents and Its Changes

This article describes and analyses the disparity in wealth distribution of Chinese residents, on the basis of results of sample surveys from 1995 to 2002. It finds an obvious worsening trend, mainly due to the rapid widening of the urban-rural gap. The process of privatisation of urban housing has led to a narrowing of the wealth gap between urban residents, and has also led to a widening of the wealth gap between urban and rural residents, as well as the national wealth gap. As incomes from land decline, the relative weight of land value in rural residents＇ overall wealth possession has been decreasing and the role of land in narrowing the nation＇s urban-rural gap has been weakened. In addition, this article also holds that the financial assets of residents wiU play a greater role in enlarging the overall wealth distribution disparity.

SPECIAL ISSUE： INCOME INEQUALITY IN CHINA Market Reform and the Widening of the Income Gap

In the course of marketization in China, there has been a trend for the income gap to become ever wider. Some people have mistakenly attributed the gap to market reforms. This article provides a detailed empirical analysis of the changes in income distribution patterns and the reasons for the increasing income gap to clear up such misunderstandings. We believe the most important factors in the widening of the income gap and unequal income distribution are institutions and policies inherited from traditional economic planning; newly emerging systems and policies driven by departmental and local interests that run counter to market laws; lack of government action on gaps or distortions in the market; insufficient capital regulation and labor protection; and excessive government intervention in the economy.

China’s Industrial Upgrading and Value Chain Restructuring Under the New Development Pattern

Global industrial chains(GICs)have become a hallmark of the world economy underpinning the global production cycle.Since the reform and opening up was introduced in 1978,China has taken an active role in global value chains(GVCs)and become the world’s factory floor.Under the external shocks to GICs,such as US trade frictions with China and the COVID-19 pandemic,China’s traditional comparative advantages in manufacturing which include its labor force and costs are waning.This has manifested in a wave of industrial relocations from China to other countries as well as China’s weakening international competitiveness.We took stock of the concepts and journey of GVCs and elaborated the intrinsic relationship between GVCs and the new development pattern of“dual circulations”.We also analyzed the trends of GVCs,the current status and problems of China’s industrial chains,and China’s market heft,complete industrial chains and the digital economy as new strengths for industrial chain upgrade.In our conclusion,this paper put forth some policy recommendations for China’s industrial chain upgrade in the context of dual circulations.

China＇s 40 Years of Fiscal and Tax Reform： A Basic Trajectory

The present paper describes the trajectory of China＇s fscal and tax reform in the past 40 years, which can be summarized in five phases. The reform commenced with ＂＇decentralizing power and transferring benefits. ＇＂ Then, under great fiscal pressure, institutional reform was instigated, which aimed to establish a new fiscal and tax system. To regulate the government revenue and expenditure beyond the fiseal and tax system, reforms were put in place to build an institutional framework for public finance. As the fiscal and tax reform had gradually entered the more sophisticated phases, China took a series of measures to further improve the public finance system. Since 2012, based on the overall plan of comprehensively deepening reform, China has embarked on establishing a modern public finance system. The present paper characterizes China＇s fiscal and tax reform as gradually moving toward a system that aligns with the overall reform and complements the goal of marketization and modernization of state governance.

China＇s Economic Growth and Structural Transition since 1978

Over the past 40 years of reform and opening-up during 1978-2018, China ＇S rapid economic growth has become a miracle in world economic history and reshaped the world economy. In the 40 years, China has successfully transformed from an isolated agricultural country into the world＇s largest industrial manufacturer. In 2018, China＇s urbanization rate is expected to reach 60% with per capita GDP expected to reach 9, 000 USD. After another 5 to 8 years, China will join the rank of high-income countries, successfully cross the middle-income trap and become a moderately prosperous economy in all respects. In its modernization drive, China will follow the new concept of ＂innovation, coordinated, green, open and shared development＂ and strive to achieve its ＂two centennial