The core of the micro–macro paradigm of mainstream Western economics is the assumption that a rational economic man with complete freedom of economic behaviors living in a fully…
Abstract
Purpose
The core of the micro–macro paradigm of mainstream Western economics is the assumption that a rational economic man with complete freedom of economic behaviors living in a fully competitive, free-market economy pursues maximum personal benefits. The purpose of this paper is to show the reasons for failure of mainstream Western economics explaining the “mystery of China’s economic growth” and the necessity of understanding the mystery from the paradigm of realm economics.
Design/methodology/approach
The system of socialism with Chinese characteristics led by the Communist Party of China (CPC) and the local governments that play a crucial role in the reform and opening-up has the realm attribute. It is necessary to develop a new paradigm for realm economic analysis and promote the creation of new economic globalization and international political and economic order.
Findings
According to the fourth plenary session of the 19th CPC Central Committee, “Since the New China was founded 70 years ago, our Party has led our people to create the rarely-seen miracle of rapid economic development and miracle of long-term social stability”. The authors find that it is effective and necessary to explain the miracle of China’s economic growth from the paradigm of realm economics.
Originality/value
As proven by practice, the system of socialism with Chinese characteristics and the governance system of China are guided by Marxism, rooted in China with a deep Chinese cultural foundation, and sincerely supported by the people.
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Ninghua Sun and Lei Zeng
China's economic transition is essentially the process of China's institutional changes. During the changes, the appearance of institutional innovation is not regular; instead, it…
Abstract
Purpose
China's economic transition is essentially the process of China's institutional changes. During the changes, the appearance of institutional innovation is not regular; instead, it is intermittent and random. The purpose of this paper is to show that the fitful appearance of institutional innovation is the root of China's economic growth and fluctuations.
Design/methodology/approach
This paper constructs a real business cycle (RBC) model introducing the institutional factor expressed in the quantitative form under the dynamic stochastic general equilibrium (DSGE) framework by measuring China's institutional changes quantitatively.
Findings
By comparing the characteristics of the actual economic data with those of the simulated economic data, we find that this RBC model can explain 94.44%, 66.07%, 23.46%, 21.03% and 15.45% of the cyclical fluctuations in output, investment, labor, consumption and capital, respectively.
Originality/value
The impulse response analysis finds that the institutional shocks have a relatively long duration, lasting about 30 years, and decline slowly over time, while technological shocks decline relatively fast, lasting approximately ten years.
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Lin Gui, Zhendong Yin and Huihua Nie
The stability maintenance system has played an essential role in maintaining social stability although it also has brought about social problems worthy of attention. Admittedly…
Abstract
Purpose
The stability maintenance system has played an essential role in maintaining social stability although it also has brought about social problems worthy of attention. Admittedly compensation-based stability maintenance policy can address the appeals of citizens whose rights are infringed and the dissolving effect in the provision of compensation can save the cost of stability maintenance but such stability maintenance system lacks equilibrium.
Design/methodology/approach
The establishment of a strict assessment system for stability maintenance performance can encourage the stability maintenance authorities to eliminate the “fuse effect” as much as possible and ensure the effective implementation of the stability maintenance system. However, the rigorous stability maintenance performance assessment also provides the possibility for profit-driven petitions.
Findings
Due to the continuous accumulation of social dissatisfaction and the lack of stability maintenance equilibrium in the implementation of the compensation-based stability maintenance policy, public governance will fall into a stability maintenance paradox of “greater instability resulting from stability maintenance”.
Originality/value
The provision of sufficient means for the people to protect their interest by implementing measures such as strengthening the rule of law mechanisms is the key to achieve long-term social stability.
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Jie Meng and Fenghua Wu
As a crucial institutional form established since the Chinese economic reform, the system of competitive local governments has been shaping the characteristics of China's…
Abstract
Purpose
As a crucial institutional form established since the Chinese economic reform, the system of competitive local governments has been shaping the characteristics of China's socialist market economy to a considerable degree.
Design/methodology/approach
This study not only adopts the view of existing studies that attribute the economic motive of local governments to rent and consider land public finance as a means through which local governments carry out strategic investment but also attempts to further develop the view within a Marxist analytical framework.
Findings
As a result, the local governments have helped to maintain an incredibly high investment rate over a considerable period of time, facilitating the continuous, rapid growth of the Chinese economy.
Originality/value
This study concludes that China's local governments function as the productive allocator and user of rent in the strategic investment based on land public finance and thereby embed themselves in the relative surplus-value production initially arising from competition amongst enterprises, forming the dual structure of relative surplus-value production unique to China's economy.
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P.A. Montenegro, José A.F.O. Correia, Abilio M.P. de Jesus and Rui A.B. Calçada
Doctors' labour and medicines are special necessities for human survival and evolution. Since China launched the healthcare reform, the theoretical circles' discussions have not…
Abstract
Purpose
Doctors' labour and medicines are special necessities for human survival and evolution. Since China launched the healthcare reform, the theoretical circles' discussions have not yet clarified the respective special properties of doctors' labour and medicines as goods and the internal relations between doctors' labour and medicines at the level of the theoretical basis.
Design/methodology/approach
Health is a prerequisite for people's all-round development, a precondition for economic and social development and the people's common aspiration. The all-round moderately prosperous society could not be achieved without people's all-round health.
Findings
The authors believe the socialist relation between doctors' labour and medicines with Chinese characteristics should be one that is people-oriented, and the corporatization of hospitals or the capitalization of doctors' labour should be avoided.
Originality/value
In this paper, the authors explore the particularity of doctors' labour, particularity of medicine production, circulation, consumption and the internal relations between doctors' labour and medicines by using the analytical approach of Marxist political economy while considering the special roles of doctor's labour and medicines in the reproduction of labour power and put forward the theoretical basis for the segregation of doctor's labour and medicines.
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Fangyi Jiao, Dongchao Zhang and Xiyue Zheng
This paper analyzes and discusses the fundamental role of new urbanization in the construction of a new development pattern based on the specific practice of China’s new…
Abstract
Purpose
This paper analyzes and discusses the fundamental role of new urbanization in the construction of a new development pattern based on the specific practice of China’s new urbanization construction, combining the classical Marxist ideas in urbanization and the theory of the industrial capital circulation, and proposes to remove blockages in the domestic and international circulations through developing new urbanization and construct a new development pattern with the domestic circulation as the mainstay and the domestic and international circulations promoting each other, thereby achieving high-quality national economic operation.
Design/methodology/approach
Based on the theory of industrial capital circulation, this paper elucidates the general process of domestic and international economic circulations, critically examines the bottlenecks and challenges in economic circulation, and emphasizes the mechanisms through which new urbanization contributes to the formation of a new development pattern.
Findings
The people-centered new urbanization can effectively release domestic demand, optimize investment supply, and stabilize market participants’ expectations, linking the national economic circulation from production to consumption and alleviating supply and demand mismatches, which has a fundamental role in building the new development pattern.
Originality/value
We should focus on creating a comprehensive domestic demand system based on counties while fostering a unified domestic market led by urban clusters and metropolitan areas to stabilize and enhance the expectations of both domestic and international market participants.
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Ge Yang and Shutian Cen
Over the past 20 years, China's infrastructure has developed at an extraordinary speed. The current literature mainly focuses on the effects of political incentives on the…
Abstract
Purpose
Over the past 20 years, China's infrastructure has developed at an extraordinary speed. The current literature mainly focuses on the effects of political incentives on the infrastructure. However, this paper indicates that the structural change of China's land regime is an important clue and that the supernormal development of China's infrastructure is an explicable result for that.
Design/methodology/approach
This paper theoretically proves that in a politically centralized and economically decentralized economic entity with a public land-ownership regime, the self-financing mechanism formed by local officials through regulation of the land-grant price is the primary factor that influences the optimal supply volume of infrastructure in a region, in addition to political and economic incentives, and whether the self-financing mechanism can be formed or not depends on the structure of a country's land regime, which can help to explain the difference between the development of infrastructure in China and that in other developing countries from a theoretical angle.
Findings
The paper suggests that the mode is facing an important transformation toward land reform and new-type urbanization construction, and the replication and promotion of China's experience in infrastructure construction are of further significance under the Belt and Road Initiative as it provides a method for helping developing countries to eliminate infrastructure bottlenecks.
Originality/value
Through the test of multinational panel data, the paper indicates that the structural change of China's land regime around 1990 had an overall effect on the supernormal development of infrastructure in China. The paper indicates that the “land-based development mode” of China's infrastructure indeed contributed to the supernormal development of infrastructure in China, but there are still some shortcomings in this mode.