771911904

Series on Chinese Economics Research - Vol. 7

New Paradigm

for Interpreting the

Chinese Economy Theories, Challenges and Opportunities

Justin Lin Yifu The World Bank & Peking University, China

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Contents

Preface Chapter 1.

v Prospect for the Chinese Economy in the 2Ist Century — Speech for the 2001 BiMBA Top Management Class of Beijing University 1 2 3 4 5 6

Chapter 2.

Introduction Review of Achievements in the Chinese Economy After Reform and Opening up Factors Contributing to China's Rapid Economic Growth Analysis of Key Problems in Chinese Economy Solutions to China's Economic Problems Prospect for the Chinese Economy: Optimistic or Pessimistic

1 1 2 3 9 19 23

Economic Development and Chinese Culture

25

1 2

25

3 4

The Cultural Status of Traditional China Efferts in Modernization and Three Levels of Chinese Culture Economic Development and Cultural Changes Economic Development and the Future of Chinese Culture

ix

26 33 36

x Chapter 3.

New Paradigmfor Interpreting the Chinese Economy The Revival of China and the Future of Chinese Entrepreneurs 1 2

Chinese Entrepreneurs Overseas Challenges and Opportunities for Chinese Entrepreneurs

45 45 46

Chapter 4.

Curb Overheating to Prevent Supercooling

51

Chapter 5.

Window Guidance and Macro Control — Contemplating the Current Macroeconomic Policies of China

57

1 2 Chapter 6.

Chapter 7.

Chapter 8.

57 59

Will the Reform of Exchange Rate Regime of RMB be Successful?

63

Commercial Environment Construction and Macroeconomic Development

69

Competitive Advantage, Comparative Advantage, and Economic Development StrategieÂŤ

77

1 2 3 Chapter 9.

Failure to Reach Expected Effect by Raising the Interest Rate Striking Effect of Window Guidance

Main Ideas of the Theory of Competitive Advantage Comparative Advantage is the Basis for Competitive Advantage The Core of the Development Strategy is to Increase the Capital Accumulation

Chinese State-Owned Enterprises and the Reform of Financial Institutions 1 2 3 4

China's Reform of State-Owned Enterprises: Current Status, Course, and Problems The Structure of China's Financial System Direction of the Reform of the State-Owned Enterprises and Financial System in China Conclusion

77 79 82 85 86 97 116 123

Contents Chapter 10. The Development Pattern of the Chinese Financial Market in the New Century — Forward: China's Tasks in the New Century 1 2 3 4

5

6

7

2 3 4

The Economic Development Stage and Characteristics of the Financial Structure Brief Overview of the Structure of Real Economy and Risk Characteristics On the Nature and Application of Various Arrangements of Financial Systems Evolution of the Financial Structure: Dynamic Malching of the Arrangements of Financial Systems and the Structure of the Real Economy

Chapter 12. Lack of Existing Paradigm for Interpreting the Chinese Economy 1

125

Criteria for the Efficiency of Different Financial Market Systems and the Evolution Laws 126 China's Advantageous Industries in the Early 2Ist Century 128 Selection of China's Financial Market Model . . . 130 The Main-Board Securities Market Cannot be the Financing Source for Smalland Medium-Sized Enterprises Owing to the High Cost of Financing 131 The Growth Enterprise Securities Market (GEM) is not Suitable for Chinese Smalland Medium-Sized Enterprises 132 How to Regard the Merger Wave of Foreign Banking Industries and Large Banks' Expansion to Personal Credit?

134 Conclusion 134

Chapter 11. On the Optimal Financial Structure in Economic Development 1

xi

How to View the Previous 25 Years of Rapid Economic Growth?

137

137 139 141

145 147 147

New Paradigmfor Interpreting the Chinese Economy

XII 2

Chinese Economy Should Not Be Viewed Based on the Current Theoretical Model 3 Grasping Slight Changes to Interpret the Chinese Economy 4 Maintaining Rapid Economic Growth in the Next Two Decades 5 Technology — The Most Important Aspect in the Long-Term Economic Growth of a Country 6 Where is Chinese Economy Headed?

7 What Kind of MBA Education Does China Need?

8 Lessons from the West and the Challenges and Opportunities of Chinese Economics 9 The Methodology of the Pursuit of Knowledge Index

149 151 152

153 155 174 179 188 201