This volume is one of four from the July 2011 International Economics Association meeting in Beijing. The 55 papers selected from the meeting were all brought into print in 2012 under the energetic leadership of 2011 IEA president, Masahiko Aoki. This particular book is a convenient compendium of assessments of major issues confronting the Chinese economy as it moves beyond the policy package that created three decades of unprecedented economic growth. The volume is introduced by one of China's senior reform economists, Wu Jinglian, who puts the reform era into a longer historical perspective of Chinese efforts to manage economic development since the 1950s. He makes a strong case for the path-dependent possibilities of economic change and makes clear how the challenges and opportunities confronting policy makers have been created from a particular institutional combination of market and command factors.
Three chapters appear under the heading “Perspectives of the Chinese Economy.” In the first, Dwight Perkins addresses the particular features of China's investment practices and the general features of investment patterns as development occurs. In the next chapter, Lou Jiwei, Chairman of the China Investment Corporation, identifies six areas in need of reform: social security, individual income tax, household registration, fiscal responsibility between centre and locales, capital account openness, and revised economic growth policies with capital account openness. Finally, Cai Fang and Zhao Wen consider how to improve labour productivity through increasing resource reallocation efficiency and technical efficiency. A second section of four chapters under the heading of “Labor Market, Social Insurance, and Demographic Change” features essays on China's more flexible labour market (Wei Chi, Richard Freeman and Honglin Li), population aging and economic growth (Judith Banister, David Bloom and Larry Rosenberg), health and education investments in human capital (Karen Eggleston), and the low levels of consumption due to the underdeveloped social safety net (Chong-En Bai and Binzhen Wu).
The third and fourth sections of the book have one essay each, one a case study of the IPO of the Industrial and Commercial Bank of China showing the transition of a state-owned bank to one only partially owned by the state by Franklin Allen, Darien Huang, Jun “QJ” Qian and Mingxin Zhao and the other a sophisticated assessment of economic costs and environmental benefits of pollution and carbon control using a multi-sector economic model combined with an advanced atmospheric model and a detailed emissions inventory by Jing Cao, Mun S. Ho and Dale Jorgenson. The final section of the book entitled “Political Institutions in China's Development” places the current economic reform challenges in the context of political structures that long pre-date the onset of reforms. Xing Li, Chong Liu, Xi Weng and Li-An Zhou consider the ways in which growth targets become magnified as plans go downward due to political competition, resulting in higher growth rates than targets in recent years and also the reporting biases of the tragic Great Leap Forward era (1958–1961). Chenggang Xu considers the challenges of a system of regionally decentralized authoritarianism that combines centralized political and personnel control but decentralized administrative and economic responsibilities, an institutional complex with antecedents reaching back well before the founding of the People's Republic in 1949.
Together the essays in this volume remind the reader that Chinese successes and difficulties have both been produced by a very specific set of institutions and circumstances at the same time as the positive and negative aspects of China's late 20th-century economic transformation exemplify possibilities and problems confronting the developing and developed world more generally.
