This book mainly focuses on the miracle of China’s foreign trade in the past 40 years from five perspectives: first, it briefly reviews the import substitution strategy China adopted before its opening-up; second, it analyzes the export-oriented strategy that contributes a lot to China’s economic growth since 1980s; third, it discusses the impacts of trade liberalization and China’s participation in WTO on Chinese firms; forth, it addresses the deepening opening-up in the context of global financial crisis; last, it provides policy advice on China’s newly conducted all-around opening-up strategy. By dividing China’s opening-up into five stages, this book offers a comprehensive discussion to understand and analyze the reason, performance and challenge of China’s economic growth from the perspective of foreign trade.
Author(s): Miaojie Yu
Series: Studies in Modern Chinese Economy
Publisher: Springer
Year: 2022
Language: English
Pages: 333
City: Singapore
Preface
Contents
List of Figures
List of Tables
Part I Overview
1 China’s Opening-Up Policies: Achievements and Prospects
1.1 Introduction
1.2 Expanding the Extensive Margin of Opening, 1978–2000
1.2.1 Setting Up Open Economic Zones and Industrial Parks
1.2.2 Relaxing Market Access for Foreign Direct Investment
1.2.3 Reducing Import Tariffs
1.2.4 Encouraging the Processing Trade
1.2.5 Comments on the Stage of Extensive-Margin Opening
1.3 Focusing on the Intensive Margin of Opening, 2001–2017
1.3.1 Accession to the WTO
1.3.2 Expanding Market Access for FDI
1.3.3 Relaxation of Outward FDI
1.3.4 Establishment of Pilot Free Trade Zones
1.3.5 New-Economy Pilot Cities Experiment
1.3.6 Comments on the Stage of Intensive Margin of Opening Up
1.4 Features of the All-Around Opening Up
1.4.1 Belt and Road Initiative
1.4.2 Free Trade Ports Experiment
1.4.3 Greater Bay Area
1.4.4 Policy Recommendations
1.5 Conclusion
Part II Import Substitution and Trade Protection
2 The Economics of Price Scissors: An Empirical Investigation for China
2.1 Introduction
2.2 Price Scissors in China
2.3 The Theoretical Framework
2.4 The Econometric Model
2.4.1 Agricultural Trade
2.4.2 Relative Agricultural Price Elasticity of Wage
2.5 Data and Empirical Results
2.5.1 Benchmark Estimates
2.5.2 Endogeneity and Instruments
2.5.3 Robustness Checks
2.5.4 Identification of the Weights
2.6 Concluding Remarks
Appendix
3 Measuring the Impact of Trade Protection on Industrial Production Size
3.1 Introduction
3.2 The Empirical Model
3.3 Data and Estimate Results
3.4 Concluding Remarks
Part III Export-Led and Firm Productivity
4 China’s Processing Trade: A Firm-Level Analysis
4.1 Introduction
4.2 Policy Setting to Promote Processing Trade
4.2.1 The Characteristics of Processing Trade
4.2.2 The Origin of Processing Imports
4.2.3 Top Products of Processing Imports
4.3 Transportation Modes
4.3.1 The Most Important Ports
4.3.2 The Most Strongly Demanded Locations
4.3.3 Quality of Processing Imports
4.3.4 Ownership of Processing Importing Firms
4.3.5 The Scope of Activity Conducted by Import Processing Firms
4.4 Matching Transaction-Level Trade Data and Firm-Level Production Data
4.4.1 Transaction-Level Trade Dataset
4.4.2 Firm-Level Production Dataset
4.4.3 Matching Method
4.4.4 Productivity for Processing Firms
4.5 Conclusions
5 Estimating Productivity Using Chinese Data: Methods, Challenges and Results
5.1 Introduction
5.2 Model
5.3 Estimation
5.3.1 First Stage
5.3.2 Second Stage
5.3.3 Extensions: Over-Identification and Attrition
5.4 Data and Empirical Implementation
5.5 Results Using Cobb–Douglas
5.6 Results Using Translog
5.7 Measures of Within-Industry Productivity Dispersion
5.8 Assessing Differences in Estimated Productivity—Economic Metrics
5.8.1 Capital-Intensity and Productivity
5.8.2 Sales and Productivity
5.8.3 Exporting and Productivity
5.9 Conclusions
Appendix 5.1: Cobb–Douglas Point Estimates
6 Place-Based Industrial Policy and Firm Productivity
6.1 Introduction
6.2 Data and Measurement
6.2.1 Data
6.2.2 Measurement
6.3 Empirical Strategy and Results
6.3.1 Baseline Model
6.3.2 Robustness Check
6.3.3 Placebo Test
6.3.4 Endogeneity
6.3.5 Mechanisms
6.3.6 Spillovers
6.4 Concluding Remarks
7 Managerial Efficiency and Product Decision: Evidence from Chinese Firms
7.1 Introduction
7.2 Preliminary Empirical Analysis
7.2.1 Estimation Framework and Measures
7.2.2 Data
7.2.3 Estimates
7.2.4 Role of Firm Heterogeneity in Productivity
7.2.5 Endogeneity Issues
7.2.6 Summary and Issues
7.3 Theoretical Model and Analysis
7.3.1 Technologies
7.3.2 Product Markets
7.3.3 Firm’s Decision
7.3.4 Market Equilibrium
7.3.5 Trade Liberalization
7.3.6 Firm Heterogeneity in Production Productivity
7.4 Further Empirical Analysis: The Role of Managerial Efficiency
7.4.1 Measure of Managerial Efficiency
7.4.2 Measure of Productive Efficiency
7.4.3 Estimates with Heterogeneous Managerial Efficiency
7.4.4 Further Robustness Checks
7.5 Concluding Remarks
Appendix 7.1: Matching Transaction-Level Trade Data and Firm-Level Production Data
Transaction-Level Trade Dataset
Firm-Level Production Dataset
Matching Method
Appendix 7.2: Proof of Proposition 1
Appendix 7.3: Measuring Pure Productive Efficiency (TFP2)
Part IV Trade Liberalization Strategy
8 Measured Skill Premia and Input Trade Liberalization: Evidence from Chinese Firms
8.1 Introduction
8.2 Data, Measures, and Empirics
8.2.1 Data
8.2.2 Measures
8.2.3 Mincer Empirical Specification
8.3 Estimation Results
8.3.1 Baseline Mincer Regressions
8.3.2 Mincer Regressions Using Matched Sample
8.3.3 Estimates Using Panel Data
8.3.4 Endogeneity Issues
8.3.5 On the Possible Mechanism
8.4 Conclusion Remarks
Appendix 8.1: Estimates Using Alternative Measured Unskilled Wages (Online Only, Not for Publication)
9 Input Trade Liberalization and Import Switching: Evidence from Chinese Firms
9.1 Introduction
9.2 Data and Measurement
9.3 Empirical Findings
9.4 Conclusions
Part V All-Round Opening-up Strategy
10 Worker Training, Firm Productivity, and Trade Liberalization: Evidence from Chinese Firms
10.1 Introduction
10.2 Data
10.3 Empirical Specification
10.3.1 Type-2 Tobit Selection Model
10.4 Estimation Results
10.4.1 Baseline Results
10.4.2 Self-Selection of Training
10.4.3 Different Measures of TFP
10.4.4 Further Robustness Checks
10.5 Concluding Remarks
Appendix A
11 China’s Free Trade Ports: Effective Action Against the Threat of De-Globalization
11.1 Introduction
11.2 Theoretical Framework for the Establishment of Free Trade Ports
11.2.1 New De-Globalization Threat to the World Trade
11.2.2 Free Trade Ports: The Next Step in China’s Reform and Opening up
11.2.3 Functional Orientation for the Construction of China’s Free Trade Ports
11.3 International Experience and Domestic Exploration
11.3.1 Singapore Port
11.3.2 Shanghai Yangshan Free Trade Port Area
11.3.3 Comparison Between the Shanghai Free Trade Port and International Free Trade Ports
11.4 Path for the Construction of Free Trade Ports in China
12 Forty Years of Opening Up Has Greatly Benefited China’s Foreign Trade
12.1 The Remarkable Achievements of Chinese Foreign Trade
12.2 From a Wider and Deeper to an All-Around Opening Up Over Four Decades
12.3 Key Practices of Reform and Opening Up During the Past Four Decades
12.3.1 From the Import Substitution Strategy to an Export-Oriented Strategy
12.3.2 Trade Liberalization and WTO’s Influence
12.3.3 Opening Up Deeper Amid the Global Financial Crisis
12.4 Policy Suggestions for the All-Around Opening Up Strategy
References
