Zhang, Shuguang and Cheng, Lian (2010): The Achilles' heels of growth: factor price distortion and consequential adverse wealth transfers in China. Published in:
Download (333Kb) | Preview
As critical piece of China’s gradualist economic transition, domestic price reform still faces major challenges. In particular, factor price, which is still tightly-controlled and not market-based, is lower than market equilibrium price. Factor price distortion not only reduces market efficiency but also affects wealth distribution. Subsequent wealth transfer has, over the past ten to fifteen years, created a powerful vested interests and spawned social resentment, both of which may constitute major hazards in China’s future reform and development. Keeping in mind that China will have to address factor price distortion in its next step of reform, this paper takes stock of China’s journey toward price reform; examines the relationship among factor price distortion, previous economic growth, and policy; and estimates the size of resulting wealth transfer.
|Item Type:||MPRA Paper|
|Original Title:||The Achilles' heels of growth: factor price distortion and consequential adverse wealth transfers in China|
|English Title:||The Achilles' Heels of Growth: Factor Price Distortion and Consequential Adverse Wealth Transfers in China|
|Keywords:||factor price; economic growth; wealth transfer|
|Subjects:||E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E64 - Incomes Policy; Price Policy
E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E25 - Aggregate Factor Income Distribution
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics
|Depositing User:||Unnamed user with email email@example.com|
|Date Deposited:||14. Nov 2011 22:01|
|Last Modified:||12. Feb 2013 16:17|
Cowling, Keith and Dennis Mueller (1978): “The Social Cost of Monopoly Power”, Economic Journal, 88, 727-748.
Fan Gang (1996): On the New Standard of Public Revenue and Spending, Case Studies of China’s Institutional Transformation, executive editor-in-chief Zhang Shuguang, Shanghai People’s Press (in Chinese).
Garbaccio, Richard (1994): "Price Reform and Structural Change in the Chinese Economy: Policy Simulations Using a CGE Model", China Economic Review, 6, 1-34.
Gong Min (2009): A Comprehensive Description of China’s Factor Price Reform, Times Finance, 1st Issue (in Chinese).
Monetary Policy Analysis Panel of PBoC (2005): Report on the Steady Promotion of Market-based Interest Rates (supplement of China Monetary Policy Implementation Report), China Finance Press (in Chinese).
NBS (2007): China Statistical Yearbook, China Statistics Press (in Chinese).
NBS Department of National Economic Accounts, Department of Survey Statistics, PBoC (2008): History Information of China’s Cash Flow Statements (1992~2004), China Statistics Press (in Chinese).
Qin, Duo, Marie Cagas, Geoffrey Ducanes, Xinhua He, Rui Liu, and Shiguo Liu (2009): "Effects of Income Inequality on China's Economic Growth", Journal of Policy Modeling, 31, 69-86.
Tornell, Aaron and Philip Lane (1999): "The Voracity Effect", American Economic Review, 89, 22–46.
Tornell, Aaron and Andres Velasco (1992): "Why Does Capital Flow from Poor to Rich Countries? the Tragedy of the Commons and Economic Growth", Journal of Political Economy, 100, 1208–1231.
Torvik, Ragnar (2002): "Natural Resources, Rent Seeking and Welfare", Journal of Development Economics, 67, 455-70.
Xu, Dianqing (1993): "Price Distortion in the Transition Process: A CGE Analysis of China's Case", Economics of Planning, 26, 161–182.
Young, Alwyn (2000): “The Razor's Edge: Distortions and Incremental Reform in the People's Republic of China”, Quarterly Journal of Economics, 115, 1091-1135.
Zhang Ping (ed.) (2006): Resource Price Reform – Outlines, Strategies and Support Measures, China Market Press (in Chinese).
Zhang Shuguang (2007): “Market-based Transition of China’s Economy: Description and Analysis”, Social Sciences Frontline, 4th Issue (in Chinese).
Available Versions of this Item
- The Achilles' heels of growth: factor price distortion and consequential adverse wealth transfers in China. (deposited 14. Nov 2011 22:01) [Currently Displayed]