On February 27,the World Ba nk released a repor t in Beijing which recommended that China needed to redefine the government’s role,alter the structure of state enterprises and gradually allow market-set interest rate...On February 27,the World Ba nk released a repor t in Beijing which recommended that China needed to redefine the government’s role,alter the structure of state enterprises and gradually allow market-set interest rates in order to sustain its economic growth over the next two decades.By any standard,China’s展开更多
China＇s financial conundrum arises from two sources. First, its large saving （trade） surplus results in a currency mismatch because it is an immature creditor that cannot lend in its own currency. Instead, foreign ...China＇s financial conundrum arises from two sources. First, its large saving （trade） surplus results in a currency mismatch because it is an immature creditor that cannot lend in its own currency. Instead, foreign currency claims （largely US dollars） build up within domestic financial institutions. Second, economists, both American and Chinese, mistakenly attribute the surpluses to an undervalued RMB. To placate the USA, the result was a gradual and predictable appreciation of the RMB against the dollar of 6 percent or more per year from July 2005 to July 2008. Together with the fall in US interest rates since mid-2007, this one- way bet in the foreign exchanges markets not only attracted hot money inflows but inhibited private capital outflows from financing China＇ s huge trade surplus. Therefore, the People＇s Bank of China had to intervene heavily to prevent the RMB from ratcheting upwards, and so became the country＇s sole international financial intermediary as official exchange reserves exploded Because of the currency mismatch, floating the RMB is neither feasible nor desirable, and a higher RMB would not reduce China＇ s trade surplus. Instead, monetary control and normal private-sector finance for the trade surplus require a return to a credibly fixed nominal RMB/USD rate similar to that which existed between 1995 and 2004. However, for any newly reset RMB/USD rate to be credible as a monetary anchor, foreign ＂China bashing＂ to get the RMB up must end. Then the stage would be set for fiscal expansion to both stimulate the economy and reduce its trade surplus.展开更多
Using simple statistical analysis of count-level budgetary data from across all of China＇s counties, the present paper examines whether the post-1994 fiscal decentralization has affected redistribution at the count-l...Using simple statistical analysis of count-level budgetary data from across all of China＇s counties, the present paper examines whether the post-1994 fiscal decentralization has affected redistribution at the count-level. The new fiscal system has been less able to narrow inter-county dispersion in ftscal imbalances than the old one, even after taking intergovernmental transfer payments into account. Although with the post-1994 system there has been a modest increase in per capita welfare spending in all counties on average, much of the new-found fiscal resources have been spent on salary and administrative expenses rather than spending on public goods. Therefore, it is imperative that the reform of China＇s tax system is intensified.展开更多
Editor＇s Words On 18 March 2011, the China Association for World Economics hosted ＂The Presentation of the 2010 Pushan Award for Excellent Papers on International Economics ＂ at the China Central University of Fina...Editor＇s Words On 18 March 2011, the China Association for World Economics hosted ＂The Presentation of the 2010 Pushan Award for Excellent Papers on International Economics ＂ at the China Central University of Finance and Economics. Over 700 scholars and students from home and abroad attended the ceremony. Professor Joseph Stiglitz, the winner of the Nobel Prize in Economics, presented the awards and gave a speech on ＂The Failure of Economics in America.＂ The following speech transcript has been approved and edited kindly by Professor Stiglitz.展开更多
In contrast to the traditional Western approach to macro-fiscal management,China’s proactive fiscal policy is founded on a people-centered development philosophy and,with distinctive Chinese characteristics,is a sign...In contrast to the traditional Western approach to macro-fiscal management,China’s proactive fiscal policy is founded on a people-centered development philosophy and,with distinctive Chinese characteristics,is a significant policy innovation of macroeconomic management in the Chinese modernization.Although there are notable distinctions between the Western“Keynesian”and the“nonKeynesian”schools of thought,both of these approaches’core policy goals and methodological roots are the same,composing the traditional Western macro-fiscal approach.This approach faces increasing real dilemmas.China’s proactive fiscal policy,however,places greater emphasis on future potential growth rates in addition to equilibrium between supply and demand,achieving a fiscal policy transformation with a new approach.In this paper we argue that with such a new approach,China should reconsider the nature and reasonable level of the fiscal deficit,the function and risk assessment criteria of government debt,the scope and effects of reductions in taxes and fees,its approach and focus of demand management,and the costs and resulting efficiencies of policies in order to develop a new fiscal policy paradigm that is more in line with its stated goals.展开更多
Strong credit expansion in China after the recent global financial crisis has brought local government financial vehicles （LGFV） into the spotlight. Rapid growth of LGFV has triggered concern about local government ...Strong credit expansion in China after the recent global financial crisis has brought local government financial vehicles （LGFV） into the spotlight. Rapid growth of LGFV has triggered concern about local government indebtedness, banks＇ asset quality and, more broadly, China＇s medium-term financial stability and sovereign risk. This paper constructs a unique frm-level dataset to evaluate the country ＂s local government debt. We find an uneven distribution of LGFV, which are concentrated in the coastal areas, and a deterioration of their debt repaying ability from 2010 to 2012. We use principal component analysis （PCA ） along with multivariate discriminate analysis （MDA） to identify the credit risk of LGFV based on conventional financial variables as well as local governments ＇fiscal status. We also estimate the safe boundaries of debt bearing at the provincial government level. The estimations reveal more severe local government debt risks in the middle-western provinces and higher risks associated with LGFV at the municipal and county levels. Although it is very unlikely that there will be a national debt crisis in China, the high risk of LGFV should be noted and effectively controlled by improving the fiscal transparency of local governments and reforming the fiscal system.展开更多
This paper quantifies the regional economic contributions of coal exports from the US using a case study of Signal Peak Energy in Montana. Two methods of estimating economic contributions are compared, contribution an...This paper quantifies the regional economic contributions of coal exports from the US using a case study of Signal Peak Energy in Montana. Two methods of estimating economic contributions are compared, contribution and impact analysis. The latter is adopted because the industry impact analysis is more accurate, especially since it is based upon accounting records from Signal Peak. Our estimates of regional economic and fiscal impacts do not vary significantly with the price of coal because we explicitly account for swings in royalty income. Our analysis finds that Signal Peak Energy supports 678 jobs, over $55 million in tax revenues, more than $90 million in royalties, $111.7 million in value added, and $62.3 million in labor income. Curtailing or halting Signal Peak’s coal production for environmental reasons as some environmental groups have argued would eliminate these economic contributions.展开更多
This study investigates whether the tax-sharing system has deteriorated the fiscal capacity of subnational governments by analyzing how fiscal revenues are divided between provincial and sub-provincial data J？om Zhej...This study investigates whether the tax-sharing system has deteriorated the fiscal capacity of subnational governments by analyzing how fiscal revenues are divided between provincial and sub-provincial data J？om Zhejiang Province in China governments. Our study of county-level fiscal during 1994-2007 shows that intra-provincial revenue-sharing rules favor county governments in two ways： （i） they improve county governments ＇fiscal autonomy in terms of using their own revenues; and （ii） they enhance county governments ＇fiscal capacity through province-to-county general tran^Jers. In addition, we find that intra-provincial fiscal revenue-sharing rules and transJers reduce [iscal dist^aritv between counties.展开更多
文摘On February 27,the World Ba nk released a repor t in Beijing which recommended that China needed to redefine the government’s role,alter the structure of state enterprises and gradually allow market-set interest rates in order to sustain its economic growth over the next two decades.By any standard,China’s
文摘China＇s financial conundrum arises from two sources. First, its large saving （trade） surplus results in a currency mismatch because it is an immature creditor that cannot lend in its own currency. Instead, foreign currency claims （largely US dollars） build up within domestic financial institutions. Second, economists, both American and Chinese, mistakenly attribute the surpluses to an undervalued RMB. To placate the USA, the result was a gradual and predictable appreciation of the RMB against the dollar of 6 percent or more per year from July 2005 to July 2008. Together with the fall in US interest rates since mid-2007, this one- way bet in the foreign exchanges markets not only attracted hot money inflows but inhibited private capital outflows from financing China＇ s huge trade surplus. Therefore, the People＇s Bank of China had to intervene heavily to prevent the RMB from ratcheting upwards, and so became the country＇s sole international financial intermediary as official exchange reserves exploded Because of the currency mismatch, floating the RMB is neither feasible nor desirable, and a higher RMB would not reduce China＇ s trade surplus. Instead, monetary control and normal private-sector finance for the trade surplus require a return to a credibly fixed nominal RMB/USD rate similar to that which existed between 1995 and 2004. However, for any newly reset RMB/USD rate to be credible as a monetary anchor, foreign ＂China bashing＂ to get the RMB up must end. Then the stage would be set for fiscal expansion to both stimulate the economy and reduce its trade surplus.
文摘Using simple statistical analysis of count-level budgetary data from across all of China＇s counties, the present paper examines whether the post-1994 fiscal decentralization has affected redistribution at the count-level. The new fiscal system has been less able to narrow inter-county dispersion in ftscal imbalances than the old one, even after taking intergovernmental transfer payments into account. Although with the post-1994 system there has been a modest increase in per capita welfare spending in all counties on average, much of the new-found fiscal resources have been spent on salary and administrative expenses rather than spending on public goods. Therefore, it is imperative that the reform of China＇s tax system is intensified.
文摘Editor＇s Words On 18 March 2011, the China Association for World Economics hosted ＂The Presentation of the 2010 Pushan Award for Excellent Papers on International Economics ＂ at the China Central University of Finance and Economics. Over 700 scholars and students from home and abroad attended the ceremony. Professor Joseph Stiglitz, the winner of the Nobel Prize in Economics, presented the awards and gave a speech on ＂The Failure of Economics in America.＂ The following speech transcript has been approved and edited kindly by Professor Stiglitz.
文摘In contrast to the traditional Western approach to macro-fiscal management,China’s proactive fiscal policy is founded on a people-centered development philosophy and,with distinctive Chinese characteristics,is a significant policy innovation of macroeconomic management in the Chinese modernization.Although there are notable distinctions between the Western“Keynesian”and the“nonKeynesian”schools of thought,both of these approaches’core policy goals and methodological roots are the same,composing the traditional Western macro-fiscal approach.This approach faces increasing real dilemmas.China’s proactive fiscal policy,however,places greater emphasis on future potential growth rates in addition to equilibrium between supply and demand,achieving a fiscal policy transformation with a new approach.In this paper we argue that with such a new approach,China should reconsider the nature and reasonable level of the fiscal deficit,the function and risk assessment criteria of government debt,the scope and effects of reductions in taxes and fees,its approach and focus of demand management,and the costs and resulting efficiencies of policies in order to develop a new fiscal policy paradigm that is more in line with its stated goals.
文摘Strong credit expansion in China after the recent global financial crisis has brought local government financial vehicles （LGFV） into the spotlight. Rapid growth of LGFV has triggered concern about local government indebtedness, banks＇ asset quality and, more broadly, China＇s medium-term financial stability and sovereign risk. This paper constructs a unique frm-level dataset to evaluate the country ＂s local government debt. We find an uneven distribution of LGFV, which are concentrated in the coastal areas, and a deterioration of their debt repaying ability from 2010 to 2012. We use principal component analysis （PCA ） along with multivariate discriminate analysis （MDA） to identify the credit risk of LGFV based on conventional financial variables as well as local governments ＇fiscal status. We also estimate the safe boundaries of debt bearing at the provincial government level. The estimations reveal more severe local government debt risks in the middle-western provinces and higher risks associated with LGFV at the municipal and county levels. Although it is very unlikely that there will be a national debt crisis in China, the high risk of LGFV should be noted and effectively controlled by improving the fiscal transparency of local governments and reforming the fiscal system.
文摘This paper quantifies the regional economic contributions of coal exports from the US using a case study of Signal Peak Energy in Montana. Two methods of estimating economic contributions are compared, contribution and impact analysis. The latter is adopted because the industry impact analysis is more accurate, especially since it is based upon accounting records from Signal Peak. Our estimates of regional economic and fiscal impacts do not vary significantly with the price of coal because we explicitly account for swings in royalty income. Our analysis finds that Signal Peak Energy supports 678 jobs, over $55 million in tax revenues, more than $90 million in royalties, $111.7 million in value added, and $62.3 million in labor income. Curtailing or halting Signal Peak’s coal production for environmental reasons as some environmental groups have argued would eliminate these economic contributions.
基金The authors thank Ruimin Wang for generously making his data available. Funding for this research was provided by the National Natural Science Foundation of China （No. 71773019）, the Shanghai Pujiang Scholarship （No. PJ0001644） and the Grant for Key Programs Sponsored by the Ministry of Education of China （No. 13JJD790006）.
文摘This study investigates whether the tax-sharing system has deteriorated the fiscal capacity of subnational governments by analyzing how fiscal revenues are divided between provincial and sub-provincial data J？om Zhejiang Province in China governments. Our study of county-level fiscal during 1994-2007 shows that intra-provincial revenue-sharing rules favor county governments in two ways： （i） they improve county governments ＇fiscal autonomy in terms of using their own revenues; and （ii） they enhance county governments ＇fiscal capacity through province-to-county general tran^Jers. In addition, we find that intra-provincial fiscal revenue-sharing rules and transJers reduce [iscal dist^aritv between counties.
