Poverty Reduction in China: Experiences and Measurement of Effects

This study employs the generalized method of moments(GMM)and panel vector autoregression(PVAR)models for a multi-factor quantitative dissection of China’s poverty reduction process across multiple stages,using provincial panel data from 2000 to 2019.According to our research,economic growth and social development are the key drivers of poverty reduction in China,but the trickle-down effect of economic growth is diminishing and marketization is having a lesser pro-poor effect.Public expenditure has failed to provide social protection and income redistribution benefits due to issues such as targeting error and elite capture.Increasing the efficiency of the poverty reduction system calls for adaptive adjustments.Finally,this study highlights China’s poverty reduction experiences and analyzes current challenges,which serve as inspiration for consolidating poverty-reduction achievements,combating relative poverty,and attaining countryside vitalization.

Industrial Organization in the Digital Economy Era:Evolution and Effects

Advances in digital technology and vast data applications have resulted in the emergence of the digital economy paradigm,which is a new techno-economic paradigm for the digital economy age.Under this paradigm,the industrial organization has shifted toward networked,platform-based,boundaryless,and integrated development with new characteristics.Specifically,there has been a fierce“positional arms race”fueled by financial capital,accelerating the growth of platform companies.The“hierarchical monopolistic competition”market structure has taken shape,resulting in a“coexistence without disruption”monopolistic competition.As platform businesses expand into new business sectors,competition among industrial ecosystems intensifies.Data and algorithms have become secret weapons for corporate success,allowing platform companies to expand their monopolistic forces.Industrial organization in the digital era has revolutionized the operating rules and logic of industrial economy,giving rise to new industries,business models,and paradigms,as well as being conducive to international cooperation and intelligent regulation.Meanwhile,it has introduced new challenges to socioeconomic development,making platform companies’anti-competitive and monopolistic behaviors more implicit,privacy and security concerns more conspicuous,and antitrust identification and investigation more difficult.The government should embrace the evolving trends of industrial organization in the digital economy era,accelerate regulatory transition,and strengthen governance and regulation under the digital economy paradigm.

A Review and Outlook of the Centennial of China’s Industrialization:The CPC’s Industrialization Strategy

Industrialization has been a dream for the Chinese nation since modern history and a goal of the Communist Party of China(CPC).Ever since its founding in 1921,the CPC has been exploring a path for China’s industrial development based on socialism as the political and institutional premise.Since the founding of the People’s Republic of China in 1949,the Chinese people have established a socialist system under the CPC’s leadership and carried out industrial development for over seven decades in the world’s most populous country,blazing a new trail of socialist industrialization with Chinese characteristics.Under the CPC’s leadership,China established an independent and complete industrial system in less than three decades from 1949 to 1978,and developed into the world’s largest industrial power with the most complete industrial sectors in over three decades from 1979 to 2016.In its future industrial development,China aims to complete new-type industrialization by 2035,build a modern economic system,reach the level of moderately developed countries in terms of GDP per capita,and develop into a major world industrial power by the centennial of the founding of the People’s Republic of China in 2049.

Systematic Optimization of China's Manufacturing Industrial Structure

Using China's two-digit manufacturing sectors as samples, this paper first analyzes China's output structure optimization objectives and energy conservation and emissions abatement potentials in 2015, then examines various factor inputs' matching, and estimates their capacity utilization status, focusing on capital stock factor. Results of our study suggest that:(1) China's manufacturing output structure has great potentials of optimization to reduce energy intensity and carbon intensity by 18.08% and 17.42% respectively over the original values;(2) to reduce factor mismatch, various supporting input factors need to be introduced after manufacturing output structure optimization. The level of capital stock, in particular, requires a substantial change;(3) China's manufacturing capacity utilization(56.14%) in 2015 was far below its average level(73.27%) in the mid and late stage of the 11 th Five-Year Plan period(2008-2010). The low capacity utilization was attributable to economic slowdown and investment inertia. After input factor matching, capacity utilization may rise to the latter level.

The Integrated Development of China's Industrial and Ecological Civilization:Paths and Policy Options

Judging by the general pattern of human civilization, ecological civilization is not a simple negation of industrial civilization. Given China＇s unique national conditions and uneven process of industrialization, it is inappropriate to separate eeological civilization from industrial civilization. Instead, government should identify the common ground between industrial civilization and ecological civilization, fully utilize material wealth, technology means and organizational system of industrial civilization of the world, leave the freedom of imagination and practices for creating the new-type industrial civilization to businesses and the public, continuously strengthen the material foundation of China＇s ecological civilization, with a view to supporting the development of ecological civilization with high-quality real economy and achieving the integrated development of industrial civilization and ecological civilization while expediting the new-type industrialization and delivering the benefits of industrialization to 1.3 billion Chinese people.

Government Role in Fostering Emerging Technological Industries:A New Perspective for Industrial Policy Research

Mainstream industrial policy research cannot fully explain how government interventions have helped China’s mobile communications industry catch up with and overtake those of advanced nations.China’s mobile communications industry made breakthroughs in 3G,caught up with advanced nations in 4G,and gained a leadership position in 5G due to the implementation and improvement of a strategy of industrial competition that accommodates mainstream standards and prioritizes the mid-band spectrum based on the integrated“technology,standard and industry”deployment system and swift decision-making.The introduction of a perspective of a strategy of industrial competition may supplement industrial policy research in the following ways:First,when the concerted actions of numerous innovators are important for industrial competition performance,an effective strategy of industrial competition can be devised and overall coordinated by the government provided that is compatible with the catch-up development of emerging technological industries.Second,an industrial policy becomes effective when it is complementary with the strategic factors for long-term industrial performance such as the strategy of industrial competition and avoids serious disruptions to market-based mechanisms.

Digital Economy and High-Quality Industrial Development

In the 14th Five-Year Plan period(2021-2025),China has vowed to pursue high-quality industrial development.The digital economy drives high-quality industrial development by creating means of production,reducing transaction costs,transforming industrial organization,and improving the efficiency of resource allocation.The digital factor has become a key factor of production for high-quality development.Digital and user-created innovations are the new normal for cross-sectoral integration and innovation.Great progress has been made in China'high-quality industrial development driven by the digital economy.The rapid development of digital industries and industrial digitalization have reshaped the industrial division of labor and helped the ascension of related industries towards the medium-and high-end links of the global value chains.However,China still faces numerous challenges in the development of its digital economy;it lacks indigenous industrial innovation,depends on foreign supply of core technologies,and is ill-prepared for industrial digitalization.Much work remains to be done to further coordinate the development of some industries and foster digital ecosystems for the symbiosis of industrial chains.In furthering the high-quality industrial development driven by the digital economy,China should stay at the forefront of digital innovation,promote digital governance,enhance data factor agglomeration,and foster digital talents.

BUILDING A MODERATELY PROSPEROUS SOCIETY IN ALL RESPECTS——New-Type Industrialization

After announcing the goal of building a moderately prosperous society in all respects by 2020, the Chinese leadership also called for a new path of industrialization, putting a premium on quality and new development concepts. Unlike traditional industrialization in the broad or narrow sense, new-type industrialization features synergy between primary, secondary, and tertiary industries, integration between traditional economy and the new economy, environmental protection, technology progress, and innovation. It represents an inclusive approach to industrial development. At the fundamental level, the success of China’s new-type industrialization can be attributed to China’s inclusive learning and innovations.

Evolution of Technology Content in China's Exports and International Comparison

Under the global value chain, a country extensively employs foreign intermediate inputs in manufacturing its export products, which may not employ entirely local technology. Science-based measurement of technology content in and structure of exports should be conducted using production process data. Using world input-output tables(WIOTs) of 1995-2011, this paper developed a new method for measuring the export technology content of China and other major countries. Our research findings suggest that, since 1995, there has been some technology upgrade of Chinese exports. China's overall and sector-specific technology contents, and domestic technology contents and indexes all increased and demonstrated a weak convergence towards the average level of developed countries. Judging by the relative rankings of sector-specific technology levels, China is almost locked at the lowest level in the world, and cannot challenge the technological superiority of developed countries like the U.S. and Japan.

Evolution of Principal Contradiction Facing Chinese Society and the CPC Leadership over Economic Work

Since the founding of the People’s Republic of China in 1949,the Communist Party of China(CPC)has separated China’s evolving principal social contradictions into four different stages.Based on the assessment of principal social contradictions at different points in time,the CPC enacted different economic policies.During 1949-1956,based on the recognition of class struggle as China’s principal social contradiction,the Party focused its economic policies on socialist transformation and established the foundation for the public sector of the economy.During 1956-1978,amid flip-flops in the Party’s assessment of whether class struggle or backward productive forces were the principal contradiction,China’s economic development suffered some setbacks,but the vision for building an industrial country remained unchanged,and resources were focused on developing major national industrial projects.During 1978-2019,the Party focused on economic development and reform and opening up in pursuit of the realization of grand economic development goals based on the assessment that China’s principal social contradiction was between people’s ever-growing material and cultural needs and China’s relatively backward social productive forces.In 2017,the 19th CPC National Congress made the important political assessment that China’s principal social contradiction had transformed into the contradiction between people’s ever-growing need for a better life and China’s unbalanced and inadequate development,and proposed new development concepts to lead the Chinese people on a new journey towards the second centennial goal.The most important experience of the CPC’s economic work is analyzing and solving problems based on Marxist ideology and methodology.

Digital Innovation:Organizational Foundation and Chinese Heterogeneity

The advancement of digital innovation requires a distinctive organizational structure,different from those for non-digital innovation.The research literature,however,has confused appropriate forms of organization for digital innovation with those for non-digital innovation.Organizational heterogeneity,which is often overlooked in research on digital innovation,determines a country’s core digital competencies.From a holistic perspective of corporate organization,industrial organization and innovation system,this study has identified the unique organizational structure for digital innovation in China by comparing organizational structures for digital and non-digital innovations.In terms of corporate organization,Chinese companies have intensified internal competition and cooperation to incentivize digital innovation in areas with mid-and short-term goals of profitability.In terms of industrial organization,multi-platform enterprises and diverse use cases may enhance economies of range and multi-path exploration of digital innovation.In terms of innovation system,administrative intervention in specific domains of the digital economy may help to shape expectations of innovation entities and coordinate their behaviors.

Manufacturing Localization,Technology Backfire,and Economic De-globalization

Since the global financial crisis,global value chain(GVC)have been contracting amid the trend toward economic de-globalization.With GVC participation rate in mind as the core indicator of economic de-globalization,in this paper we create a multi-country general equilibrium model to characterize the mechanism by which manufacturing localization affects GVC participation rate.Our theoretical derivation shows that changes in the local manufacturing status of final products in various countries directly influence the GVC participation rate of those countries.When the local proportion of a country’s final products reaches a certain level,rising local proportion of intermediate inputs,economic growth below the world average level,and technology progress all cause the country’s GVC participation rate to decline,giving rise to de-globalization at the manufacturing and trade levels.We further provide a comprehensive interpretation based on an empirical test of the deep-seated causes of economic de-globalization in relation to such economic phenomena as increasing trade concentration,the“technology backlash”effect of the new industrial revolution,and economic growth driven by the combined forces of trade protectionism and quantitative easing.

Pathways for Elevating China’s Opening-up under the New Development Paradigm

Due to the superimposed impacts of new industrial revolution,the changing trade policy and the COVID-19 pandemic,the world has seen setbacks in globalization,contractions in the global value chain(GVC),and the risk of a fragmented global system.The once-in-a-century changes in our world today highlight the need for China to explore a new development paradigm based on new concepts.In the new era,China must not only come to terms with a backlash against globalization and challenges from the reshaping of international rules,but also breathe life into the“dual circulations,”i.e.domestic and international economic circulations.China must open up wider to the outside world to keep abreast with changes in today’s global governance system.In the complex and volatile international environment,we should explore new areas of development spearheaded by institutional opening up,create new gateways and platforms for opening up and cooperation for mutual benefit,contribute to new global governance and security systems,and promote synergy between domestic and international circulations.In building a great modern socialist country,China must open up wider and be more inclusive to the outside world.

Coordinating Regional Development as a Solid Foundation for Common Prosperity

Coordinating regional development is a key step for China to achieve the goal of common prosperity for all. From the era of the planned economy to the development,consolidation and improvement of the socialist market economic system after reform and opening up since 1978, as a key target of economic development, China has been committed to balancing regional development, and after decades-long explorations and relentless efforts made great progress. Coordinated regional development-as manifested in narrowed regional development gaps, more equal access to basic public services and eradication of regional absolute poverty-has paved the way for more substantive progress to be made in delivering common prosperity for all. Despite the progress, China still needs to further improve institutional systems for regional coordination and undergird the regional foundation for common prosperity according to the requirements of its new development stage. Specifically, China should focus on the following priorities:(i) Strengthen institutional infrastructure, smooth regional internal and external circulations, and develop a unified domestic market at a higher level;(ii) give full play to the role of the government in equalizing access to basic public services, promoting infrastructure connectivity and protecting basic living standards;(iii) optimize integrated urban-rural development mechanisms, take solid steps to revitalize the countryside, and further coordinate urban and rural development;(iv) improve the layout of the industrial chain and advance interregional industrial chain upgrade and social progress.

Relationship and Boundary Between Market and Government in Corporate Innovation

It is the view of this paper that both market and non-market mechanisms can stimulate corporate innovation and have their respective areas of application. As a major developing country, China should create a national innovation policy system to coordinate these incentives in order to promote economic transition and upgrade through corporate innovation. Innovation policies are determined by a country's technology level. The premise for most advanced economies to follow market-based incentives is a foundation of early-stage non-market policies, as their governments frequently resorted to non-market means such as state-owned enterprises in the early stage of development. This paper also concludes that technological uncertainty can well describe the technological characteristics of industries. For industries with less technological uncertainty, non-market means are more likely to succeed. Lastly, this paper employs the dimensions of both technology level and industrial technology characteristics for a quantitative analysis on the scope of industries to which the two incentive mechanisms are applicable, divides them into quadrants in order to discuss the boundary between market-based and non-market incentives, and explore ways to achieve effective interplay between government and market.

Overreliance on Net Export and Investment Impedes China's Structural Transformation: Estimation and Analysis Based on a Multi-Sector Growth Model

Since reform and opening-up in 1978, changes in China's industrial structure have generally followed the pattern of "Kuznets facts" but still exhibits some unique characteristics, which led us to raise the following three questions regarding China's structural transformation:(1) Why did the share of China's agricultural and manufacturing employment reduce/increase intermittently rather than continuously?(2) Why did the share of China's agricultural employment increase during certain periods? When the share of manufacturing employment reduced, why did the workforce reversely flow into agriculture rather than move to the service sector?(3) Why did growth in the share of China's service sector employment decelerate before reaching its peak? Why did the share of employment in the industrial sector suddenly increase after an abrupt decline? This paper creates a multisector economic growth model that contains non-homothetic preferences and differentiated productivity, and incorporates the "two drivers" therein for a demand-side estimation and analysis. The result shows that China's economic growth model driven by net export and investment is a critical factor for explaining the three questions regarding its structural transformation. This paper believes that only by implementing supply-side structural reforms, reducing the dependence on net export and investment, and achieving sustainable endogenous economic growth will China be able to expedite its industrial restructuring.

China's Low Export Markups Puzzle: Competition Effect and Selection Effect

Based on China's industrial enterprises-customs matched data, this paper utilizes two-tier stochastic frontier analysis method to estimate and verify the extent to which selection effect and competition effect influence exporting firms' markup. Our findings suggest that the interaction between selection effect and competition effect ultimately causes actual firm markup to be higher than the baseline markup by 7.11%. Exporting firms' actual markup is higher than the baseline markup by different degrees. In terms of the decomposition of selection effect, TFP explains for 28.05% of selection effect, and nonproductivity factors explain for the rest 71.95%. By controlling for the type of firms' export,the export-productivity paradox only exists for processing trade firms, which shows that with increasing trade facilitation, the policy incentives to encourage firms to export are major contributors to the low export markups.

Capacity Building-Oriented Cooperation between China and BRI Countries

This paper identifies the international industrial capacity cooperation led by the Chinese government and participated by Chinese companies under the Belt and Road Initiative(BRI)as“inclusive industrial capacity cooperation with a capacity-building orientation.”BRI cooperation demonstrates brand-new characteristics compared with previous international direct investments in terms of participants,investment areas and results.BRI cooperation aims to enhance local development capacity,promote economic development,increase exports,and improve industrial ecosystems.In the long run,international industrial capacity cooperation under the BRI helps achieve sustainable development in China and BRI countries for multi-win results.Yet risks and challenges also warrant attention and require countermeasures.

Human Capital Advanced Investment and Its Effects on Economic Growth

This paper created the Human Capital Relatively Advanced Investment(HCRAI)index to compare human capital investment in China and other countries.The HCRAI comprises life expectancy and average length of schooling adjusted for GDP per capita to measure the degree to which a country has invested in human capital in the early stage.Our study found that in 2014,China ranked much higher on the HCRAI index than on GDP per capita.The fact that China was far ahead of the United States on the HCRAI ranking suggests that China had invested more in human capital.Since the 1970s,China’s HCRAI ranking has experienced an inverted U-shaped curve,increasing at first and ranking first in the world in 1980 before declining in a later stage.That is to say,China has invested somewhat less on human capital in relative terms in the post-reform era.International data comparison showed that the HCRAI index may largely explain a country’s long-term economic growth rate,justifying the continuity in China’s six-decade development before and after reform and opening up in 1978.By replacing the existing absolute indicators with relative indicators,this paper measures the level of human care in China,reflecting the concept of fairness.The international comparison and long-term evolution of the HCRAI index offer a new perspective for the new normal of China’s economy and supply-side structural reforms.China’s declining HCRAI ranking over the past three decades indicates the importance of a more inclusive and sustainable development path that puts human first.

How Media Opinion Influences Imports in the US

Does public opinion influence US imports?Do countries with a good reputation export more to the US?And vice versa?Based on an extended trade gravity model,this paper employs news data from the GDELT database and US monthly import data to create an indicator of the influence of public opinion to examine the effects of US domestic public opinion on imports.Our research findings suggest that:(i)US public opinion influences US imports.Specifically,(ii)when public opinion turned negative during 2013-2017,it exerted a significantly negative effect on US imports;when public opinion was favorable during 2008-2012,it exerted an insignificantly positive effect on US imports.(iii)According to the pulse response function and variance decomposition,negative public opinion exerted a more significant and more lasting effect on US imports compared with positive public opinion.(iv)It can be discovered after further decomposing such effects on product categories that significant product heterogeneity exists in the public opinion effects on US imports:Complex and differentiated products are more influenced by negative public opinion while homogeneous and intermediate products are more influenced by positive public opinion.