Abstract:Chinas economy currently is confronted with a turning point. international experience shows that it is difficult to keep a relatively high economic growth at this critical period. Faced with certain common conditions and problems in some developing countries, China also has its own challenges and opportunities. To keep an ongoing high economic growth, we should understand our countrys situation, seize the timing, and choose the appropriate development strategies, which comprise deepening the reform and eliminating the institutional obstacles, attaching more importance to employment issue and guaranteeing share of economic growth and social stability, promoting the formation of resource-saving growth and keeping the economic growth sustainable, inclining to enlarging domestic demand and lessening the negative impact of the weakening of export-oriented growth drive, quickening the development of service industry and improving the its contribution to growth and employment, increasing the science and technology investment and solving the technological bottleneck of our economic growth, paying more attention to the issues of fair and stability and reducing the barriers and frictions in development, maintaining and promoting the free-trade regime of global resources, technologies and products and gaining good environment for our mid-and-long-term economic development.

Abstract:This paper applies transaction cost economics to study why informal institutions appear in Chinese provincial budgeting and to identify their major forms. The basic argument is that informal institutions are designed by provincial politicians to solve transaction cost problems they face in creating and enforcing budgetary contracts. There are three major horizontal informal institutions, i.e., budgetary property right, partial hierarchy, and full hierarchy, and one vertical informal institution, i.e., personal-connection-based budgeting.

Abstract:This paper has estimated the capital stock at provincial level in China between 1952 and 2000. It draws on and compares the existing studies on the estimation of capital stock in China, and has taken into account the major historic adjustments on Chinese GDP statistics. It has also taken care of such statistical issues as investment flow, capital deflator, depreciation, base-year capital stock and errors and omission of data. The completion of provincial-level capital stock in China in this paper is expected to upgrade the research on the pattern of economic growth and productivity change in China.

Abstract:This paper analyzes the roles of Chinas state-owned commercial banks SOCBs within the multi-game between central and local governments, individuals and SOCBs, through literature review and empirical evidence. Conclusions are as follows: First, given the policy credit demand sourced from industrial and regional difference, a state-owned bank should exist. Second, Chinas SOCBs show five characteristics, two categories of commercial-based and policy-based SOCBs, government intervention, less-efficiency, non-separation between policy-based loss and mis-operation, and repeated capital injection. Finally, a corner solution is put forward to merge ICBC and ABC into a new China National Bank, while BOC and CCB should be listed, which is a way to influence other policy arrangement, such as deposit insurance and capital injection.

Abstract:This paper explores the endogenous determination of population mobility and the evolution of registered household system. It shows that, Fiscal competition among regional government will drive the mobility cost down, generally, the level of mobility under centralized system is lower than that under decentralized system. The increase of demand for inter-regional reallocation of labor would increase the efficiency loss of mobility restriction, which will result in decrease of mobility cost. This paper shows that, there are three basic motivation drive government to restrict migration: 1 eliminating the externality of local public good caused by migration; 2 maximizing government revenue by controlling inter-regional tax competition; and 3 implementing region-differential policies. The efficiency of restriction determined by the consistency of the governments object with social welfare maximization.

Abstract:The high growth rate of household saving in China and the motive of Chinese household saving have attracted great attention of academic community as well as policy-maker recently. A common point of view is that the precautionary motive plays an important role in Chinese household saving actions. This paper, by using a data set from thirty-five large cities of China, provides an empirical analysis of household saving in China during 1999—2003 period of time. It finds that there does exist a precautionary motive in Chinese household saving, but the strength of precautionary motive is not as strong as people expected. After explaining the empirical findings, the paper suggests policies to reduce the growth rate of household saving in China.

Abstract:We construct a one-period competitive model, which clearly indicates that investors sentiment results in the change of the equilibrium price. This finding is also supported through empirical analysis. The model and empirical results show that sentiment has significant impact on the return and volatility. The results also show that the two markets have similar characteristics of risk and return. Furthermore, the weak-form market efficiency hypothesis is not found for the two markets. Finally the institutional investors probably are the source of noise-trading risk.

Abstract:This is an empirical study, and flow of funds analysis as an approach is adopted. It examines the saving-investment mechanism in China in the past decade, and discusses the role of financial structure in this process. It analyzes the flow of funds between various economic sectors, with special focus on the sources and uses of funds in banking, securities and insurance industries of the financial sector, aiming to discover the functions and efficiency of those sub-sectors in financial areas. The analysis leads to the conclusion that, to put the saving-investment mechanism into full play, greater endeavor should be made to develop the capital market in China. Ingredients for a mature capital market are: funds are well channeled into the market, and pricing is a market decision.

Abstract:Developing countries such as China are often accused of “social dumping" because of their low labor standards, while they refuse to relate labor standards to trade. This paper offers a framework to explain the evolution of labor standards in developing countries. We think labor standards in developing countries have to experience a gradual upgrading progress, in which market mechanism plays a very important role. Workers in developing countries will emigrate owing to the low marginal productivity of labor, while foreign capital will flow into developing countries, and thus labor standards evolve into higher level without any intervention from international agency. This analysis has very meaningful policy implications.

Abstract:We analyze the influence of the rampant piracy activities in China on the efficiency of patent protection. We conclude that although patent protection was prolonged since 1993, the incentive to input resources to R&D and apply a patent in China didnt increase but decrease, it is because increasing the length of patent protection gives the imitator a greater incentive to pirate the patent, the patentee then will be harmed more. With both patent length and breadth as instruments, the optimal patent policy consists of imposing more piracy cost on those industries with high piracy potential and vice versa by constructing kinds of statutes and regulations. We also comment on the issue about the protection of software protection in China and hold the opinion that it is necessary to provide additional protection for this industry.

Abstract:Informal financing has been very active in some of the areas due to the insufficient supply of formal finance as well as due to the influences of local culture and traditions to peoples economic behavior in rural China. This article examines, as an example, one of the villages in Wenzhou City of Zhejiang Province where the author inquired into the use of bidding Rotating Savings and Credit Associations ROSCAs over the past decade. Based on the survey from the village, a new theoretical concept and framework of “village trust” has been built up in the paper through integrating village community and trust theories. Correspondingly, three major findings are concluded in the paper: 1 As a kind of informal financial institution, bidding ROSCA is active, efficient and competitive since free bidding of the interest rates, self organized cooperation, mass participation of the people, trust factors are all involved into the operation of such self-governing informal credit system. 2 The risk of bidding ROSCAs in the village is so small that it can be discounted due to the embeddedness of village community and local culture factors into the practice. 3 Therefore, the government should recognize their legitimacy, and support and encourage their growth, at least allow their existence, while monitor and supervise their operation. Based on the experiences from the surveyed village, government monitoring should work on the aspects of membership recognizing and boundary defining of the funds appropriately, range control and purpose clarification clearly and size control of the funds strictly etc.