China's Qualitative Economic Transformation

Description

This book explores the challenges China has faced during its economic restructuring, including trade wars, rising costs of labor and land, climate change, recalcitrant state-owned enterprises, an aging population and other problems. Since its historic reform and opening up, China has achieved and sustained remarkable economic growth driven primarily by manufacturing and the real estate industry. As the country continues to move up the supply chain, "Made in China," once synonymous with poor quality, but has come to mean advanced technologies. China’s future economic growth and its success in economic restructure will depend crucially on the dynamic evolution of the country’s comparative advantages.  Contributors examine how the dynamic evolution of China’s comparative advantages can help the country overcome two closely related problems: heavy dependence on low value-added exports and the prospects of falling into the middle-income trap. The book will be of value to researchers interested in China’s economic development and policies. Contents List of Contributors List of Figures List of Tables Chapter 1: Why the Dynamic Evolution of China’s Comparative Advantages Must Be Accelerated 1.1 The Dynamic Evolution of China’s Comparative Advantages 1.2 Trends in the Dynamic Evolution of China’s Comparative Advantages 1.2.1 Changes in China’s Capability for the Dynamic Evolution of the Country’s Comparative Advantages 1.2.1.1 China’s Factor Accumulation 1.2.1.2 China’s Technological Progress 1.2.1.3 China’s Realization of Economies of Scale 1.2.1.4 China’s Accumulation of Human Capital 1.2.1.5 China’s Trade Policy Inclination 1.2.1.6 Evaluation of China’s Dynamic Capacity for Comparative Advantages 1.2.2 Changes in China’s Comparative Advantages 1.2.2.1 China’s Export Trade 1.2.2.2 The Revealed Comparative Advantages of China’s Export Commodities 1.2.2.3 China’s Index of Concentration on the International Market 1.2.2.4 China’s International Market Diversity Index 1.2.2.5 China’s Net Barter Terms of Trade 1.3 Research Topics on the Dynamic Evolution of China’s Comparative Advantages 1.4 Conclusions Chapter 2: Resource Constraints in the Dynamic Evolution of China’s Comparative Advantages 2.1 The End of the Myth of Comparative Advantages of Resources 2.2 Literature Review 2.2.1 Resource Constraints and the Dynamic Evolution of Comparative Advantages 2.2.2 Empirical Analysis of Resource Constraints: A Study on the Growth Drag 2.3 Resource Constraint and China’s Growth Drag: An Empirical Analysis 2.3.1 Empirical Model Setting and Data 2.3.1.1 Model Specification 2.3.1.2 Data Specification 2.3.2 Empirical Analysis 2.3.3 Result Analysis 2.3.3.1 The Growth Drag of Water Resource 2.3.3.2 The Growth Drag of Land Resource 2.3.3.3 The Growth Drag of Energy on the Economy 2.3.3.4 The Growth Drag of Natural Resources on the Economy 2.3.4 China’s Economic Growth Outlook: A Forecast Based on Natural Resource Constraints 2.4 Transformation of the Resource-Based Economy and Paths for the Dynamic Evolution of China’s Comparative Advantages 2.4.1 The Unsustainability of Resource-Based Comparative Advantages 2.4.2 Paths for the Transformation of Resource-Based Economy 2.4.2.1 Dynamic Evolution of Comparative Advantages by Means of Cyclic Economy 2.4.2.2 Dynamic Evolution of Comparative Advantages by Means of Industrial Upgrade 2.4.2.3 Dynamic Evolution of Comparative Advantages by Means of Structural Adjustment of Resource-Intensive Industries 2.4.2.4 Transformation of Comparative Advantages by Improving Capital Utilization Efficiency 2.5 Conclusions Chapter 3: Factor Substitution, Technological Progress, and the Dynamic Evolution of Chinese Manufacturing’s Comparative Advantages 3.1 Introduction 3.2 Theoretical Analysis 3.2.1 Calculation of Capital-Labor Substitution Elasticity 3.2.2 Factor Substitution and the Dynamic Evolution of Comparative Advantages 3.2.3 Technological Progress and the Dynamic Evolution of Comparative Advantages 3.3 Empirical Tests 3.3.1 Measurement Model and Variable Explanation 3.3.2 Data Specification and Descriptive Analysis 3.3.3 Preliminary Regression Results 3.3.4 Robustness Tests 3.4 Conclusions and Lessons Chapter 4: Optimization of Human Capital Structure and the Dynamic Evolution of China’s Comparative Advantages 4.1 Enhancement of Dynamic Comparative Advantages Based on Human Capital: Literature Review 4.2 The Impact of Changes in Human Capital Structure on China’s Comparative Advantages: An Empirical Study 4.2.1 Constructing Analytical Models 4.2.2 Data Source and Processing 4.2.3 Results of Analysis 4.3 Conclusions and Lessons Chapter 5: Industrial Agglomeration and Dynamic Evolution of China’s Comparative Advantages 5.1 Industrial Agglomeration and the Dynamic Evolution of Comparative Advantages 5.1.1 Comparative Advantages and Industrial Agglomeration 5.1.2 Industrial Agglomeration and the Heterogeneity of Comparative Advantages 5.1.3 Comparative Advantages and the Heterogeneity of Industrial Agglomeration 5.1.4 Industrial Agglomeration and Dynamic Evolution of Comparative Advantages 5.2 Measurement of China’s Industrial Agglomeration and Comparative Advantages 5.2.1 Indicators for Measurement of Industrial Agglomeration 5.2.2 Indicators of Industrial Concentration Ratio from the Time Dimension 5.2.3 Comparison of Regional Industrial Agglomeration 5.2.4 Significance Test for Industrial Agglomeration 5.2.5 Measurement of Comparative Advantages in Trade 5.2.5.1 Trade Specialization Coefficient (TC) 5.2.5.2 Revealed Comparative Advantage 5.2.5.3 Comparative Advantage of Export Scale 5.2.5.4 Measurement of the Three Indicators of Comparative Advantage in Trade 5.3 Dynamic Evolution of the Comparative Advantages of China’s Industrial Agglomeration: An Empirical Study 5.3.1 Measurement Model 5.3.2 Parameter Estimation 5.3.2.1 Before the Financial Crisis: 2003–2008 5.3.2.2 After the Financial Crisis: 2009–2016 5.3.2.3 Influence of the Financial Crisis 5.4 Conclusions and Implications Chapter 6: Home Market Effect, Spatial Efficiency of Industries, and the Dynamic Evolution of China’s Comparative Advantages 6.1 Home Market Effect: A New Source of Comparative Advantages 6.2 Home Market Effect and the Dynamic Evolution of Comparative Advantages: An Empirical Analysis 6.2.1 Methods for Calculating Home Market Effect 6.2.2 Models for Calculating Home Market Effect 6.2.3 Calculation of Home Market Effect by Province 6.2.4 Calculation of Home Market Effect by Industry 6.3 Conclusions Chapter 7: Market Integration and the Dynamic Evolution of China’s Comparative Advantages 7.1 Market Integration and the Sources of Comparative Advantages 7.1.1 The Benefits of Market Integration 7.1.2 Home Market Effect and Comparative Advantages Under Market Integration 7.1.3 New Sources of Comparative Advantages Within China’s Unified Market 7.2 Calculation of Market Integration and Home Market Effect 7.2.1 Calculation Methods for the Degree of Market Integration 7.2.2 Calculation Methods for Home Market Effect 7.2.3 Calculation and Empirical Analysis of the Degree of Market Integration 7.2.4 Calculation and Empirical Analysis of the Home Market Effect 7.3 Promoting the Dynamic Evolution of Comparative Advantages through Market Integration 7.4 Conclusions Chapter 8: Interactive Development of Imports and Exports and the Dynamic Evolution of China’s Comparative Advantages 8.1 The End of “New Mercantilism” 8.2 Literature Review 8.2.1 Theoretical Basis of China’s Trade Development Strategy 8.2.2 Choice of Direction for the Transformation of China’s Foreign Trade Strategy 8.2.3 Paths for Strategic Transformation of China’s Foreign Trade Development 8.3 Imports and Exports and the Mechanism for the Dynamic Evolution of Comparative Advantages 8.3.1 Imports and Exports and Capital Formation 8.3.2 Imports and Exports and Technological Progress 8.3.2.1 The Influence of Neutral Technological Progress on Comparative Advantages 8.3.2.2 The Influence of Capital-Saving Technological Progress on Comparative Advantages 8.3.2.3 The Influence of Labor-Saving Technological Progress on Comparative Advantages 8.3.3 Imports and Exports and the Upgrading of the Industrial Structure 8.4 Interactive Development of Imports and Exports and Its Impact on the Dynamic Evolution of China’s Comparative Advantages 8.4.1 Interactive Development of China’s Imports and Exports and Capital Formation 8.4.1.1 Estimation of Capital Formation 8.4.1.2 The Direct Effect of Imports and Exports on Capital Formation 8.4.1.3 The Indirect Effect of Imports and Exports on Capital Formation 8.4.2 Interactive Development of China’s Imports and Exports and Technological Progress 8.4.2.1 Empirical Modeling of the Technological Spillover Effect of China’s Import Trade 8.4.2.2 The Influence of General and Processing Trade Imports on Technological Progress 8.4.2.3 The Influence of Capital- and Labor-Intensive Product Imports on Technological Progress 8.4.3 Interactive Development of China’s Imports and Exports and Industrial Structure Optimization and Upgrade 8.4.3.1 Model Determination and Adjustment 8.4.3.2 Data Source 8.4.3.3 Estimation Results 8.5 Conclusions Chapter 9: Upgrading in Global Value Chains, the Dynamic Evolution of Comparative Advantages, and China’s Position 9.1 Upgrading in Global Value Chains and the Dynamic Evolution of Comparative Advantages 9.1.1 Global Value Chains and Industrial Upgrade 9.1.2 An Endogenous Mechanism for Coupling Between the Upgrading in Global Value Chains and the Dynamic Evolution of Comparative Advantages 9.2 Measurement of the Coupling Between the Upgrading in Global Value Chains and the Dynamic Evolution of Comparative Advantages 9.2.1 Principles for Measuring the Coupling Between the Upgrading in Global Value Chains and the Dynamic Evolution of Comparative Advantages 9.2.2 Models for Measuring the Coupling Between the Upgrading in Global Value Chains and the Dynamic Evolution of Comparative Advantages 9.2.2.1 The International Input-Output Model 9.2.2.2 The IVD (International Value Distribution) Index 9.2.2.3 The Index of Industry Profitability 9.2.2.4 The Index of Coupling Between the Upgrading in Global Value Chains and the Dynamic Evolution of Comparative Advantages 9.3 Data Analysis and Discussion 9.3.1 Data Sources 9.3.1.1 The Composition of WIOTs 9.3.1.2 Countries (Regions) Covered by WIOTs 9.3.1.3 Industrial Classifications in WIOTs (See Table 9.4) 9.3.2 Discussion 9.3.2.1 Comparison of the IVD Index of Chinese, Japanese, and US Industries 9.3.2.2 Comparison of World Market Share of Chinese, Japanese, and US Industries 9.3.2.3 Comparison of Profitability of Chinese, Japanese, and US Industries 9.3.2.4 Comparison of Chinese, Japanese, and US Manufacturing 9.3.2.5 Comparison of Contribution of Chinese, Japanese, and US Industries to the National Economy 9.4 Conclusions Chapter 10: National Absorptive Capacity and the Dynamic Evolution of China’s Comparative Advantages 10.1 From Absorptive Capacity to National Absorptive Capacity: Realizing the Dynamic Evolution of Comparative Advantages 10.1.1 National Absorptive Capacity: A Definition Based on National Accumulation of Knowledge 10.1.2 The Evolution from Technological Absorptive Capacity to National Absorptive Capacity 10.1.2.1 Consumer Behavior 10.1.2.2 Production and Technology 10.1.3 Dynamic Changes in the National Absorptive Capacity and Comparative Advantages Under Economic Opening-up 10.1.3.1 Analysis of Static Comparative Advantages in a Closed System 10.1.3.2 Analysis of Dynamic Comparative Advantages Under Economic Opening-up 10.2 Dynamic Evolution of Comparative Advantages Based on National Absorptive Capacity: A Case Study of FDI in China 10.2.1 FDI and China’s Economic Growth: An Overview 10.2.2 China’s FDI Absorptive Capacity and the Quantitative Indicator System 10.2.2.1 Factors in China’s FDI Absorptive Capacity 10.2.2.2 The Quantitative Indicator System of China’s FDI Absorptive Capacity 10.2.3 FDI and China’s Economic Growth Based on the Absorptive Capacity of Trade Openness: An Empirical Analysis 10.3 How to Build China’s Dynamic Comparative Advantages on the Country’s National Absorptive Capacity 10.4 Conclusions Bibliography