Chairman of the Nobel Prize Committee, Dr. Per Krusell, Welcomes Economists From the Chinese Academy of Social Sciences

On October 9, a delegation of Chinese academics led by Professor Jin Bei, Director of the Institute of Industrial Economics at the Chinese Academy of Social Sciences, traveled to Sweden as the guests of Stockholm University for one week, a trip that happened to coincide with the awarding of the Nobel prize in economics. On the afternoons of October 10th and October 12th, the delegation had the privilege to have two conversations with Per Krusell, Chairman of the Nobel Committee and a renowned professor at the Institute for International Economic Studies （lIES） at Stockholm University. Dr. Krusell, originally from Sweden, has taught at several of the world＇s leading universities, including Princeton University.

Chinese Experience in Industrial Development During the Forty Years of reform and opening-up

Over the past forty years of reform and opening-up,China's industry has sustained rapid and sound development and generated impressive achievements.Industrialization has entered the second half of its final stage.This experience of successful industrialization with Chinese characteristics constitutes an important component Chinese wisdom and Chinese approaches,and serves as a reference for other developing countries and countries in transition.The Chinese experience in industrial development during this period includes: progressively promoting industrial and economic system reform adapted to local circumstances; seizing the right moment to firmly integrate into the global system of labor division; pursuing the new path of industrialization featuring coordinated development of the "Five Pillars" in keeping up with the times; and developing an industrialization model with Chinese characteristics with concerted efforts of effective market and enabling government.

AModeling Analysis of Local Governments Competing in Offering Subsidies to Attract Investment：the Cause of Industrial Overcapacity]

Although championed by academia and policy-makers, the theory of ＂wave phenomenon＂ is a questionable explanation for overcapacity. First, enterprises do not necessarily share the same expectation for future demand of a promising industry. Second, in its model, overcapacity is explained as a deviation from equilibrium under the incomplete information hypothesis, which is in fact nothing but normal in a market economy. The prime reason for overcapacity resides in the fact that local governments are engaged in a subsidy competition to attract investment. We endeavor to illustrate the following via modeling： the subsidy effect produced by local government＇s offering of cheaper land and matching loans results in less investment from companies. Under this circumstance, enterprises channel a disproportionate amount of funding to building production capacity, which overloads the entire industry. To address the problem, reforms are needed in land property, environmental protection policies, and financial and fiscal systems.

Estimation of emission reduction potential in China's industrial sector

The industrial sector is usually the largest economy sector for carbon emissions in many countries,which made it the sector with greatest potential for carbon reduction although the process duration might be very long.Studying the potential of industrial emission reduction has great significance in estimating the carbon emission peak of China on the one hand,and adjusting its strategy in international climate change negotiations.By employing the economic accounting method,this article estimates the emission reduction potential of China's Industrial sector for the period of 2010-2050.It reveals that,taking 2030 as the year when the emission reaches the peak,the total reduction can be 8.38 billion tons(bts) for the period of 2010-2030,with 3.12 bts from structural reduction while 5.26 bts from intensity reduction.Afterwards,reduction will continue with a total amount of 6.59 bts for the period of 2030-2050,where the structural reduction accounts for 2.47 bts,and intensity reduction 4.115 bts.If both industrial and energy consumption structures are improved during the above period,the reduction potential can be even greater,e.g.the emission peak can arrive five years earlier(in the year of 2025) and the peak value can decline by about 8%as compared to the original estimation.Reviewing the trajectory of emission changes in developed countries indicates that the industry sector can contribute to the overall reduction targets through the dual wheels of structural reduction and intensity reduction,even beyond the emission peak.This article concludes with the following policy suggestions.(1) Our estimation on the emission peak of the industrial sector suggests that China should avoid any commitment earlier than 2030 on the timeline of the overall emission peak;(2) the great potential of industrial emission reduction can improve the situation of China in climate change negotiation,where the intensity reduction can serve as an important policy option.(3) Reduction potential can be further enhanced through technology advancement,which requires furthering of market oriented reforms and improvement of institutional design.(4) To secure the reduction effects of the industrial structure adjustment,the balanced development among different regions should be encouraged in order to avoid the reverse adjustment caused by industrial transferring.(5) International cooperation promoting the application and development of industrial emission reduction technologies,including carbon capture,utilization and storage,should be encouraged.

New Industrialization: Characteristics, System Development and Implementation Pathway

New industrialization in China, different from its past economic development pattern or patterns in developed nations, is the country’s theoretical innovation based on the positive and negative experiences of industrialization at home and worldwide. New industrialization has various novel characteristics, including new sources of efficiency, new factors of production, new organizational forms, and new constraints. In addition, it has certain particularities arising from modernization with Chinese characteristics. This article summarizes the characteristics of new industrialization from the perspectives of people-centered approach, quality-first concept, independent innovation, green low-carbon economics, digital-real integration, and open circulation. There are four systems for promoting new industrialization: A self-sustained scientific and technological system, a high-end advanced manufacturing system, a green low-carbon circular system, and a division of labor system with domestic and international circulation. The Chinese new industrialization proposes the pathway and policy measures considering the new global situation and the requirements of new goals of strengthening organization and leadership, reducing factor cost, accelerating independent technological innovation, smoothing domestic and international circulation, and optimizing competition environment.

The environmental costs of China's industrial development

This paper estimates China’s industrial costs under the virtual cost accounting approach.The estimation results show that Chinese industries have disbursed an increasing amount of environmental costs since 1992 while expanding environmental investment;China’s industrial cleanness has been on the rise since 1998;the virtual industrial environmental costs have been in decline since 1998.In 2007,the total industrial environmental costs accounted for merely 0.73%of gross industrial output value and only 2.52%of industrial value added;the virtual environmental costs accounted for merely 0.23%of gross industrial output value and only 0.81%of industrial value added.These figures indicate that the effects of environmental costs on the international competitiveness of Chinese industries are very limited even if China complies with the highest environmental standards.

A regional comparison of China's industrial development efficiency

The Chinese economy has been experiencing extensive growth for decades. Along with this growth, however, there have been industrial-economic, social and environmental inefficiencies. In some regions, problems exist because of overemphasis on GDP growth, or growth at the expense of the environment. Looking at efficiency through the prism of economic, social and environmental factors, this article analyzes the industrial economic development during the 10th Five-Year Plan (2001-2005). The authors conclude that economic development should be achieved while making overall improvements to economic, social and ecoenvironment efficiency.

Simulation Analysis of Macroeconomic Policy Orientations' Effects on the Industrial Economy——Based on Dynamic CGE Model

There are three different orientations of the macroeconomic policies,namely,factor-expansion,prudent-continuation and structural-adjustment.The paper uses the dynamic CGE model to simulate the effects of the three different orientations on the economy,and arrives at the following conclusions:while the factor-expansion policies can lead to growth of economic output,they also result in the further imbalance in the industrial structure and the "crowding-out effect" on the private investment.In addition,such growth is unsustainable in the long run;the growth of the industrial economy will decline rapidly to a lower level after reaching a certain high level.The prudent-continuation policies refer to the continuation of the current policies that sustain the current trends of the industrial economy,and such policies reduce the growth of the industrial economy to a lower level in the long run.The structural-adjustment policies reduce the economic output at the current stage;however,it can bring a gradual improvement of industrial structure and a balance of the supply and demand.In the long run,the optimized structure will improve the total factor productivity(TFP) and the production-possibility frontier,and thereby realize a longterm steady and rapid growth of the industrial economy.Four policy recommendations are proposed based on the simulation of the models,including taking the structural adjustment as the fundamental orientation of macroeconomic policies,lowering the "floor level" of economic growth with macro regulation,giving play to the fundamental role of market mechanism in structural adjustment and increasing the role of TFP in the growth of the industrial economy.

The Mission and Value of Industry——Theoretical Logic of Industrial Transformation and Upgrading in China

China is currently in a critical stage of industrial transformation, the key to which is the transformation of the manufacturing industry. Research on industrial transformation is essentially an exploration of the origin of industry and the values of industrial development. Industry offers the impetus for human development and contributes to social welfare. Industrial transformation is a simultaneous representation of the innovative and revolutionary nature of industry. Currently, industrialization is far from being complete in China and most regions of China have yet to develop a strong social foundation of modern industrial civilization. China still has large gaps with the standards of developed industrial powers. In addition to the lack of a solid industrial, technological foundation, China＇s industrial transformation and upgrade are confronted by the negative inclination towards excessive ＂instrumental rationalism＂. An obsession with speed, quantity, capital appreciation, and the single-minded pursuit of profitability have constrained the real values of industry. China＇ s current industrial transformation essentially requires a readjustment of the relationship between instrumental utility and real values and calls for a release of the innovative capabilities of industry. Currently, one of the most imperative, strategic tasks for China is to continue strengthening its industry. In-depth integration between industrialization and IT application will bring China＇ s industrial civilization to a new level.

Chinese Corporate Organizations Since 1978: A Journey of Explorations

The market economic system is an economic system of corporate organizations. China＇s sustained and rapid economic development over the past four decades of reform and opening-up was supported by the emergence of its business community. During this period, China＇s corporate organizations increased, expanded and developed from strength to strength, serving as a solid micro-level basis for the prosperity of the socialist market economic system. Having achieved significant progress, China＇s corporate ownership restructuring led to the common development of enterprises with various forms of ownership. An institutional factor that undergirded corporate prosperity was China＇s choice of a corporate system characterized by the interplay between market competition and government administration. How China＇s corporate organizational system will evolve in the future is determined by（1） how efficiency varies among firms with different ownership systems, and（2） external institutional pressures facing firms in their rapid internationalization process.

Empirical Analysis of Chinese Industries＇ International Competitiveness after China＇s WTO Entry

Based on recent statistical data, this paper presents an empirical analysis on the current status and evolution of international competitiveness of Chinese industries after China＇s accession a decade ago into the World Trade Organization （WTO）. Our findings conclude that international competiveness of Chinese industries has increased during the decade. Although comparative advantage of traditional labor-intensive industries is on the decline and that of technology- and capital-intensive industries is on the rise, labor-intensive industries remain the most advantageous. Competitive advantages of labor-, technology- and capital-intensive industries have all improved. Growing competitive advantage of Chinese manufacturing is a major force behind the international competiveness of Chinese industries, and traditional labor-intensive industries maintain strong international eompetiveness. Meanwhile, rapid developments of some technology- and capital-intensive industries have strengthened the international eompetiveness of Chinese industries. China is now on the eve of a second round of rapid improvement in its industrial international competitiveness. In the short- and medium-term, acquiring ＂market economy status＂ in 2016 will further release advantages of Chinese industries. Further over the next two decades, China will usher in a new era of strategic opportunities which will serve as an additional source of sustainable improvement in its industrial international competiveness.

Recalculating the Significance of Secondary and Tertiary Industries for Industrial Restructuring： Truth and Myth

By analyzing the efficiency, supply and demand of the three industries, and the foreign trade of developed countries, this paper argues： the ever-increasing proportion of the tertiary industry in developed countries has not yetproved that tertiary industry is the direction of industrial advance nor the tertiary industry is superior over the secondary industry. By estimating China＇s industrial structure with PPP-based industrial data, this paper argues that the proportion of China＇s secondary industry in its GDP is not as high as expected. China will still rely on its secondary industry for further growth because China＇s labor-intensive industries still possess the most comparative advantage and global competitiveness.

Decomposition of China＇s Industrial Environmental Total Factor Productivity Sources： Analysis Based on Factor Input and Pollution Treatment

Following slack-based inefficiency measurement method and Luenberger productivity index, this paper decomposes industrial environmental TFP index by input factors and output to estimate the sources of China＇s industrial environmental TFP. Results indicate that （1） China＇s industrial environmental TFP increased between 2001 and 2007 but declined in 2008 under the effect of global financial crisis; （2） input utilization productivity contributes 1/3 to industrial environmental TFP and pollution treatment productivity contributes about 2/3, which means that pollution treatment will effectively increase industrial environmental TFP; （3） capital utilization productivity contributes I/6 to input productivity and labor utilization productivity contributes about 5/6, which means that progress of labor production technologies is an effective means to increase industrial environmental TFP; （4） COD treatment productivity contributes roughly 2/3 to pollution treatment productivity, and S02 treatment productivity contributes about 1/3, which shows that priority on COD treatment will more effectively increase industrial environmental TFP.

Shift of Driving Force for China's Industrial Growth during 1979-2012——A Trend toward Worsening Efficiency

The driving force for China's industrial growth has shifted from the synergy of efficiency and factor input to the dominance of capital input alone.With the boundary of 2003,the contribution of capital to the growth of China's industrial economy increased from the annual average of 34.07%to 89.28%while the contribution of TFP dived from the annual average of 47.34%to-4.08%.Meanwhile,TFP growth rates dropped from the annual average of 4.6%to-0.05%and marginal capital output ratio went down from0.61 in 2002 to 0.28 in 2012.This indicates that the investment-driven pattern of China's industrial growth has been confronted with severe inefficiency.Further research suggests that the tendency of worsening industrial growth efficiency already became significant prior to the global financial crisis of 2008 and the eruption of the global financial crisis is not the fundamental reason for the worsening of efficiency and only exacerbated its tendency.The current government-led and investment-driven pattern of industrial growth is the root cause of such efficiency deterioration.Therefore,in order to achieve the transition towards innovation- and efficiency-driven growth pattern,the key is to make an appropriate distinction in the relationship between market and government,i.e.,the government must create a perfect institutional system where the market plays a decisive role and take proactive initiative to promote technology innovation and transfer on the basis of respecting market mechanism and the intent of market entities.

Path toward Environment-Friendly Industrialization： A Survey on the Practice of Xixia County

Whether industrialization and environmental protection can coexist has always been controversial theoretical question. On this topic, the protected watershed area of Xixia County provides an interesting case study. 91% of Xixia County＇s 3,15 7 square kilometers, which belongs to Nanyang City of Henan Province and is located in the protected water source area of the country＇s South-to-North Water Diversion Project, is designated water source protection zones. Driven by the need to protect these resources, Xixia County has made remarkable achievements in the field of environmental protection. Simultaneously, the county s economy has also made significant progress. In addition to its favorable geography and natural resources, Xixia County derives its successful environmental protection practices from the following factors： first, a series of environmental protection policies issued by the central government; second, Xixia County＇s emphasis on environmental protection; and third, local businesses＇ efforts to protect the environment. Xixia＇s experience has demonstrated that environmental protection can be successfully balanced with economic development when local industrial development generates resources that contribute to favorable environmental programs.

Confucianism and the Building of Chinese-Style Management

Confucianism constitutes an integral part of the excellent traditional culture of the Chinese nation and plays a crucial role in the process of Chinese modernization.The theoretical framework of Chinese-style management is built upon the active absorption of Confucianism,beyond the Western management theories in terms of assumptions about human nature and organizational foundations.

The Factor Decomposition on Carbon Emission of China——Based on LMDI Decomposition Technology

Carbon emission is the current hot issue of global concern. How to assess various contributing factors for carbon emission is of great importance to find out the key factors and promote carbon emission reduction. In this paper, the author constructs an identical equation for carbon emission, based on the economic aggregate, the economic structure, the efficiency of energy utilization, the structure of energy consumption, and the coefficient of carbon emission; by applying to LMDI decomposition technology, the author analyzes the carbon emission of China from 1995 to 2007 at industrial level and regional level. The results show that the expansion of economic aggregate is the main reason for China' s rapidly increasing carbon emission and the increase of energy utilization efficiency is the key factor that can hold back the increase of carbon emission. In addition, the change of industrial structure or regional structure and the change of traditional energy structure have limited influence on the carbon emission, and their potentials have not yet been exploited. At the end of this paper, the author proposes the efforts that China should make to reduce carbon emission.

Seven Decades of China's Energy Industry Development:Retrospect and Outlook

China’s coal,petroleum,natural gas and electric power industries are in different stages.Coal has a falling share in China’s energy mix,and clean coal is on the rise.While China’s petroleum production stagnates,the natural gas and electric power industries are developing rapidly.Amid the changing energy industries,China’s energy regulatory system has evolved from vertical to integrated management,and energy administrative and supervisory functions have become integrated over time.These changes have played different roles during specific periods,either enhancing or hampering a highefficient development of China’s energy industry.Over the past seven decades,China’s energy industry has acquired important capabilities to support the nation’s social and economic development.With industrial prowess in clean energy and energy efficiency,China has become a leader in global low-carbon and clean energy transition.In the future,China'should attach great importance to the adverse short-term effects of energy transition on its energy security.By deepening energy institutional reform,China'should enhance its energy security through energy transition.

Tencent WeChat’s Micro-Innovation of Integration and Iteration under Technical Paradigm Transformation

This paper attempts to broaden the theory of dynamic competences, defining them as the abilities of firms to integrate and reconstruct in a chaotic and complex environment of technical paradigm transformation （TP transformation）. We have created a semi-interactive theoretical framework based on dynamic competences, technical paradigms and innovation strategies to investigate how corporate dynamic competences support innovation during TP transformation. Under this theoretical framework, this paper attempts to open the popular question of mobile Internet industry - the black box of ＂micro innovation＂ - to conduct an in-depth case study of WeChat＇s micro-innovation featuring ＂integration＂ and ＂iteration ＂. The authors have discovered that the success of WeChat can be attributed to the following factors： seizure of strategic opportunities during TP transformation, effective organizational learning and knowledge management, and powerful virtual integration competences across regions, sectors and firms. These factors have led to the rapid, repetitive and precise iteration of innovation based on technical knowledge and user information. Open and coordinated innovation was carried out ahead of competitors, partners and lead customers, and effective quality control of micro-innovation was conducted to mitigate the uncertainties and risks of innovation failures. These factors have enabled WeChat to become a third-party service platform of disruptive innovation and value creation in the mobile lnternet era. The theoretical contributions of this paper are as follows：it has enriche＇d the theory of dynamic competences, conducted a groundbreaking analysis on the intrinsic mechanism of micro-innovation strategy for Internet firms from the height of technical paradigms, and elaborated how dynamic competences support innovation strategies during TP transformation. This paper offers theoretical support and practical guidance for Internet firms to innovate in the context of TP transformation.

How ＂New SOEs＂ Come of Age： Four Decades of China＇s SOE Reform

China＇s complex and twisted journey of SOE reform over the past four decades is an unprecedented transformation in its history and is at the center stage of its economic reforms. Over the past four decades, SOEs transitioned from being affiliates of a planned economy to ＂new SOEs＂ as modern enterprises under the market economic system. This journey can be roughly divided into the following four stages： the reform to expand SOE autonomy during 1978-1993, the reform to create a modern enterprise system during 1993- 2003, the reform to create a new system for the administration of state assets during 2003- 2013, and the new era of classified SOE reform since 2013. After the four stages, China＇s SOE reform has made tremendous achievements, particularly since the 18th CPC National Congress. V~th policy readiness for SOE reform in the new era, reform should be carried out in a comprehensive and systematic manner for different types of SOEs in the future.