China Political Economy

Hong, Yinxing

2022 China Political Economy

doi: 10.1108/cpe-05-2022-0007

The socialist political economy with Chinese characteristics is the scientific fruit of Xi Jinping thought on socialist economy with Chinese characteristics for a new era. People-centred philosophy is the core values of the Communist Party of China (CPC) Central Committee's governance of China with Xi Jinping as the core and has become the core values of the socialist political economy with Chinese characteristics. According to Xi Jinping thought on socialist economy with Chinese characteristics, it represents the interests of all people and determines the disciplinary attribute of the socialist political economy with Chinese characteristics, that is, people-centred economics. Xi Jinping has defined the essence of the socialism as eliminating poverty, improving people's livelihood and gradually realising common prosperity. That determines the main line of socialist political economy with Chinese characteristics is to liberate, develop and protect the productive forces and achieve common prosperity. This study aims to discuss the aforementioned statements.Design/methodology/approachXi Jinping's scientific judgement on the new stage of development and the principal contradiction facing Chinese society has put forward the requirement of problem orientation for the study of socialist political economy with Chinese characteristics, involving the main contradiction facing Chinese society, high-quality development and modernisation. China's socialist basic economic system consists of a socialist market economy in which public ownership plays the leading role alongside other forms of ownership and distribution according to work is the mainstay, while other forms of distribution coexist alongside it. And this socialist basic economic system, marked out from three dimensions—production, distribution and exchange analysis, is the key of analysis of systems in the socialist political economy with Chinese characteristics. The economic operation analysis in political economy mainly involves resource allocation and the government's macroeconomic regulation and control.FindingsThe new thought and new practices about the role of the market and the government in the new era have opened up a new realm for the economic operation analysis in the socialist political economy with Chinese characteristics. The new development philosophy and new development paradigm define the content of the economic development theory in the socialist political economy with Chinese characteristics. The new development paradigm reflects the dual circulation theory of social reproduction.Originality/valueThe socialist political economy with Chinese characteristics is to study laws of economics in various aspects from economic system, economic operation, economic development to foreign economy and provide the basic principles of socialist political economy with Chinese characteristics. Its mainstream economic position will be consolidated continuously.

Li, Zhengtu

2022 China Political Economy

doi: 10.1108/cpe-09-2022-0014

In human history, poverty for most and prosperity for few is the norm. Thus, no theory or practice of common prosperity has been developed. Marxism first formulated the theory of common prosperity, and the classical Marxist authors conducted theoretical exploration on the issue of common prosperity, forming a series of scientific conclusions.Design/methodology/approachThe century-long practical history of the Communist Party of China (CPC) is the great practice of leading the Chinese people in getting rid of poverty, letting some people and regions get rich first and ultimately achieving the goal of common prosperity.FindingsCommon prosperity is the great practice of the CPC that leads all Chinese people in building a modern socialist country in an all-round way in the new era.Originality/valueThe path of common prosperity with Chinese characteristics will certainly arise in the process of the great practice of common prosperity with Chinese characteristics. Based on the anti-poverty theory and the “spirit of poverty alleviation” from the battle against poverty with Chinese characteristics, the theory of common prosperity and its spirit with Chinese characteristics will certainly be formed. The above conclusions constitute the basic principles of the theory of common prosperity with Chinese characteristics.

Wang, Yongqin; Gao, Xin

2022 China Political Economy

doi: 10.1108/cpe-11-2022-0019

This paper studies the political economy of the endogenous urban–rural divide in two dimensions: labor market and provision of public goods.Design/methodology/approachThis paper gives a dual-sector model endogenously depending on the consumption of public goods (club goods), the number of rural–urban migrants and the tax rate (transfer payments).FindingsAccording to the research findings in this paper, the constraints on the participation of rural residents portray the rural residents' bargaining power, and in the game between the urban elites and the rural residents, tax rates depend on the preferences of the urban elites and the constraints urban elites and the rural residents jointly face. Therefore, the urban elites have to set tax rates deviating from the most preferred ones. The model in this paper can explain a series of empirical findings and yield new theoretical findings for empirical testing.Originality/valueSignificantly, the paper finds that the increase in agricultural productivity will lead to industrialization, accompanied by the disintegration of the dual-sector model. However, though the increase in industrial productivity can accelerate industrialization, it will further expand the urban–rural divide.

Li, Nan; Chen, Wei

2022 China Political Economy

doi: 10.1108/cpe-09-2022-0010

The purpose of this paper is further leveraging the advantages of the basic socialist economic system and exploring the realistic way of transforming the advantages of the socialist economic system with Chinese characteristics into governance efficacy. At its Fourth Plenary Session, the 19th Central Committee of the Communist Party of China (CPC) elevated the socialist market economy system to China's basic economic system, further affirming the significant advantages embedded in the socialist market economy from an institutional perspective.Design/methodology/approachThe essence of the basic socialist economic system consists of the ownership structure with public ownership as the mainstay, the income distribution system with distribution according to work as the mainstay and the socialist market economy, which are interrelated, supportive and reinforcing mutually, forming an organic whole.FindingsOver the past 40 years of reform and opening-up, it has been proven through practice that the basic socialist economic system has played a fundamental role in guaranteeing rapid economic development and social stability. The system not only corresponds to the development level of the productive forces in the primary stage of socialism in China but also demonstrates its strengths in eliminating polarization between the poor and the rich and achieving common prosperity.Originality/valueIt is necessary to make the basic economic system more coordinated and consistent and be committed to the philosophy that the whole is greater than the sum of its parts to form a systemic synergy, so as to achieve synergistic enhancement of institutional advantages and governance efficacy.

Sun, Ninghua; Zeng, Lei

2022 China Political Economy

doi: 10.1108/cpe-05-2022-0006

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/approachThis 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.FindingsBy 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/valueThe 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.

Lu, Jiang; Zhang, Chen

2022 China Political Economy

doi: 10.1108/cpe-09-2022-0013

Some economic theories have influenced the reform of the socialist open economy with Chinese characteristics. As a new practice of socialism, an open economy is not only driven by China’s productivity level and people’s living standards but also regulated by the law of commodity production and value.Design/methodology/approachIt was popular to participate in economic globalization for most countries in the second half of the 20th century, but not all of them could benefit from it.FindingsThe key to the success of the open-economy reform with Chinese characteristics lies in learning from and innovating the comparative advantage theory, thus forming an organic whole of the open economy, including the core of correctly handling the relationship between the government and the market, the method of gradual reform, the breakthrough point of transforming the mode of economic development, and serving people all the time.Originality/valueAchieving internal and external coordination through the combination of opening-up and independence is a critical principle of China’s economic opening-up, which not only effectively safeguards national interests but also actively promotes the construction of a new global order.

ZONG, Qingqing; ZHANG, Yi; CHEN, Yuyu

2022 China Political Economy

doi: 10.1108/cpe-09-2022-0011

This paper theoretically and empirically analyzes the effects of the elderly’s physical health status on their need for care and the choice of care models in China.Design/methodology/approachEmpirically, the estimation results of a large-sample randomized intervention trial with chronic obstructive pulmonary disease (COPD) patients through the difference-in-difference method indicated the following: (1) After the COPD intervention trial, the physical health status of the elderly in the treatment group improved significantly, the need for care was substantially reduced and the health improvement led to a 35.5% reduction in the probability of using elderly care. (2) The reduction in the need for care regarding the treatment group occurred mainly in social care. The probability of using social care decreased by 67.8% due to the elderly’s health improvement, while that of home care remained unchanged generally. (3) Further heterogeneity tests suggested that families with fewer potential internal resources for caregiving had a more pronounced decline in the need for social care.FindingsTheoretically, these empirical results support the existence of the “pecking order” theory in the family’s choice of elderly care model, that is, families tend to employ all internal resources for caregiving before resorting to social care, resulting in a higher sensitivity of social care to health.Originality/valueThe main policy implication of this paper is that ex ante preventive health intervention policies can significantly alleviate the burden of care, especially social care, on families. And preventive health intervention policies are particularly effective in reducing the burden of the families with relatively few resources for informal internal care.