ECON S180 1 (30151) Introduction to Chinese Economy July 8 th - August 9 th Yale Summer Session 2013

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1 Course Meeting Time: TTH Location: TBD Instructor: Chongwei Wong Course Content and Approach ECON S180 1 (30151) Introduction to Chinese Economy July 8 th - August 9 th Yale Summer Session 2013 This course is designed to provide students with an intensive overview of the Chinese economy with focus on the major processes of institutional change and major sectors of economic China since Over three decades, the Chinese economy undergone a rapid economic transformation at an unprecedented pace and scale. Transforming from a centrally planned economy to a market-oriented system institutional change induced fiscal, enterprise as well as financial system and banking reforms that ushered an era of industrialization and globalization. After experiencing decades of sustained growth, Chinese economy is at a crossroad with emerging issues of economic imbalance, environmental degradation, inequity, to aging population compels scholars to rethink China s development path. This intense course aims to challenge students to develop a critical view of the China miracle and obtain an informed perspective of developmental approach that China should take in the future. Throughout the course, case studies will play a core role as teaching material. Required Textbook Naughton (2007) The Chinese Economy: Transition to Development, Cambridge and London: The MIT Press. Lin Yifu (2012) Demystifying the Chinese Economy, Cambridge University Press Course Format and Requirements This course is taught both lecture and seminar format - each session initiate with 30 minutes of seminar discussion of required reading and assigned case study followed by 80 minutes of class lecture highlighting important learning outcome in reading. Group presentation consists of a 30 minutes presentation by groups of 2-3 students on assigned case study. This is followed by at least 20 minutes of class discussion on presentation topic. There will be a 10 minutes break between Lecture sessions. Case study essay and group presentation cycle starts on second session of class. A case study essay assignment (maximum 800 words) on designated questions will be assigned for each session. The writing assignments require student to answer questions posed in case study - and express their perspective in the context of the reading assignment. Lecture aims to add insight to the latest development of the topic. All students must submit a final paper on one of 5 topics of significance the Chinese economy.

2 Course Evaluation Type of Assessment Tasks/Activities Weighting Remarks Weekly Writing Assignment and Case Study 40% Weekly Topical questions will be assigned end of class to be turned in next week. Writing assignment s maximum length of 800 words. Writing assignment will be graded for student s personal insight, opinion and perspective - and utilization of findings and empirical evidence in required reading. Group Presentation 30% Weekly group presentation of reading material. Students will be organized in to groups of 2-3. Presentation will ask student to organize and present their solutions to assigned case study. Final Essay 20% A final essay require student to pick a topic that interest student within the covered topics in the course. Requirements: 1) minimum 3500 words in length, 2) base argument on empirical evidences obtained from required reading. Grading criteria will be objectively base on quality of argument, organization, research and clarity. In Class Seminar Discussion 10% Students are expected to actively engage in seminar discussion of case study, presentation and required reading.

3 Lecture Schedule and Assigned Reading WEEK 1: OVERVIEW OF THE CHINESE ECONOMY - INSTITUTION CHANGE AND ECONOMIC GROWTH Session 1: Overview of the Chinese Economy Naughton (2007): Chapter 1 &2 Lin Yifu (2012): Ch 1-2 (Needham puzzle) Lin, Justin, (2008). The Needham Puzzle, the Weber question, and China s miracle: Long term performance since the Sung Dynasty, China Economic Journal, Vol. 1 Iss. 1 Maddison (2007). Chinese Economic Performance in the Long Run, Development Centre Studies, OECD China Building Capitalism with Socialist Characteristics Session 2: Institution Change and Economic Growth Economic Reform in China 1949 to Present Naughton (2007): Chapter 3-4 & Chapter 13 Lin Yifu (2012): Ch 5 (Enterprise viability and factor endowment), Ch 6 (The comparative advantagefollowing development strategy), Ch 9 (Reforming state-owned enterprises) Junya Sano (2011), Key Targets in the 12th Five-Year Plan and Policies for their Realization - Reasons for the 7% Growth Target, Pacific Business and Industries, Vol XL, 2011 No. 42 Hovey, M. and T. Naughton (2007). A survey of enterprise reforms in China: The way forward. Economic Systems 31(2): Lin, Cai and Li (1998). China s Economic Reforms: Some Unfinished Business: Competition, Policy Burdens, and State-Owned Enterprise Reform Mai and Perkins (1997) - Nine Cases of China s State Enterprises To be further updated before July 8 th

4 WEEK 2 FINANCIAL SYSTEM AND CAPITAL MARKETS Session 3: Financial System: Banking System and Reform, Stock Market and Capital Markets Naughton (2007): Chapter 19 (p ) Lin Yifu (2012): Ch 10 (The financial reform) Berger, A. N., I. Hasan, et al. (2006). Bank Ownership and Efficiency in China: What Will Happen in the World's Largest Nation? Working Paper, University of Pennsylvania. Optional Reading: Zhang et al (2011), Financial Crisis, Monetary Policy,and Stock Market Volatility in China (Annals of Economics) China s Financial System: Past, Present, and Future, Franklin Allen, Jun Qian, and Meijun Qian Case Studies: China Risk Finance: Riding the Wave of China s Financial Service Industry (Regina M. Abrami, Matthew Shaffer, Weiqi Zhang) The Expansion of PingAn (Robert C. Pozen, Nina J. Yang) Shenzhen Capital Group (Paul Gompers, Shaohui Chen, Jessie Lin, Shelley Ling) - Venture Capital China Development Bank (Li Jin, Matthew Preble, Aldo Sesia) Session 4: Land Economy, Real Estate Sector and Economic Development Crowe, Christopher, Dell'Ariccia, Giovanni, Igan, Deniz and Rabanal, Pau, How to Deal with Real Estate Booms: Lessons from Country Experiences (April 2011). Xiaoqing Eleanor Xu, Tao Chen (2010) The Effect of Monetary Policy On Real Estate Price Growth In China Hang Lung Properties and the Chengdu Decision (A) (John D. Macomber, Michael Shih, Keith Wong) The Beijing Dream (Arthur I. Segal, Voon Siang Lee, Jialei Tian, Ying Laura Wang)

5 WEEK 3 MACROECONOMICS AND THE GLOBALIZATION OF CHINESE ECONOMY Session 5: Macroeconomics and the Globalization of Chinese Economy From FDI, Industrialization to Globalization Naughton (2007): Chapter 14 (p ), 16, 17 Naughton (2007): Chapter 6 (p ), Chapter 18 (Fiscal and Monetary policy) Su, J. (2011). China's Current Inflation: Characteristics, Causes and Countermeasures, China Economist, Vol. 6, No. 4, July-August 2011, pp He, D. and W. Zhang (2010). How dependent is the Chinese economy on exports and in what sense has its growth been export-led? Journal of Asian Economics 21 (2010) To be further updated before July 8 th China Unbalanced (Diego Comin, Richard Vietor) Session 6: Science & Technology, and Economic Growth in Chinese Economy Naughton (2007): 15 China s Program for Science and Technology Modernization - Implication for American Competitiveness. The U.S. - China Economic and Security Review Commission Zhou and Leydesdorff (2005). The Emergence of China as a Leading Nation in Science, Research Policy (forth coming) China s Growth through Technological Convergence and Innovation, supporting report of China 2030 National Innovation Systems of China and the Asia Newly Industrialized Economies: A Comparative Analysis, Asia Case Research Centre, The University of Hong Kong (Ali F. Farhoodmand) From Imitation to Innovation: Zongshen Industrial Group (Willy Shih and Nancy Hua Dai)

6 WEEK 4 - CHINESE ECONOMY AT CROSSROAD Session 7: Environment Degradation and Economic Development Naughton (2007): Chapter 7, 9, 20 Ligang Sony, Wing Thye Woo, (2008). China s Dilemma: Economics Growth, the Environment and Climate Change, ANU E Press and Asia Pacific Press Minghua et al (2008) Municipal solid waste management in Pudong New Area Zhang (2013) The interaction among China economic growth and its energy consumption and emission during 1978 to 2007 Li and Peng (2011) The impact of China investment increase in fixed asset on ecological environment an empirical analysis Wen and Chen (2007) A cost benefit analysis for the economic growth in China Dow White Paper - China Thirst for Water Piao et al (2010) The Impacts of climate change on water resources and agriculture in China Zhang (2012) Delivering Environmentally Sustainable Economic Growth - The Case of China Case: The Xiamen PX Project: The Rule of Contract or Citizens in China Today Case: Sound Group China: Urban Waste Entrepreneurs (John D. Macomber, Chad M. Carr, Fan Zhao) Session 8: Future Challenges and Opportunities Transitions and Rebalancing of the Chinese Economy Lin, Justin Y. and Rosenblatt, David, (2012). Shifting Patterns of Economic Growth and Rethinking Development, World Bank Policy Research Working Paper No Blanchard, Olivier and Francesco Giavazzi, (2006). Rebalancing Growth in China: A Three-Handed Approach, China and World Economy, Volume 14, Issue 4, page Anderson, Jonathan. (2007). Solving China s Rebalancing Puzzle, Finance and Development, IMF To be further determined before July 8 th FINAL PRESENTATION FINAL ESSAY SUBMISSION

7 Teaching and Learning Activities (TLAs) TLA Functions 1. Seminars format Lecture Lecture intends to highlight and explain important topics and motivate discussions. Lecture is not designed to replace necessary information and knowledge acquisition in required reading. Student should not expect lecture sessions to cover all reading material. Seminar format by definition focus on particular topics and will require student s active participation in class discussion, teaching will involve on-going Socratic dialogue with instructor as leader of discussion. 2. Short essay assignments on selected topics To develop students ability to analyze, critique and summarize important topics and questions presented in required reading. 3. In-class discussion based on lecture, textbook reading, articles and group presentations To increase student retention of material and reveal any gaps of knowledge or questions that requires further explanation. 4. Case Study Student will be asked to write essays to answer specific questions posed in case study Grading of Student Achievement: Grading Criteria of Assessment: Weekly Writing Assignment and Case Study Excellent 10-8 Good 7 Adequate 6- Marginal 5 Marginal 4-0 Demonstrate strong evidence of original thinking and evidence of extensive research in selected topic of economic Show reasonable good evidence of original thinking and evidence of reasonable research in selected topic of economic Show acceptable evidence of original thinking and evidence of acceptable research in selected topic of economic Show marginal coverage of some aspects of the course, and demonstrate marginal evidence of original thinking and evidence of marginal research in selected topic of economic Show little familiarity and weakness in original thinking and evidence of extensive knowledge base in the comparisons between economic

8 Grading Criteria of Assessment Task 2: Final Essay Excellent 10-8 Demonstrate excellent ability to apply the learnt concepts and high degree of originality to form a personalized perspective on issues related arguments presented. A wellstructured essay with conclusions properly grounded in the arguments and convincingly justified. Good 7 Demonstrate good appreciation of the issues, theory and the facts with indications of reflection on own position. Generalizes principles, models or practices to generate new insights and questions. Some new insights and questions offered with clear evidence of learning from the course content and of the ability to apply it. Adequate 6 Demonstrate some ability to apply the learnt concepts but the arguments fall short of a comprehensive understanding of the issues, theory and the facts. Some evidence of learning from the course content. Fair justification of arguments and conclusions but little originality demonstrated and improvement on the essay structure needed. Marginal 5 Demonstrate little evidence of learning from the course content and of the ability to apply it. The arguments are relevant and accurate but isolated, addressing the issues only in part and lacking both a strong grounding in theory and understanding of the facts. Very little originality, weak justification of conclusions and poorly structured. Marginal 4-0 Demonstrate weakness in issues related to the comparisons between economic development in Demonstrate little understanding of theory and the facts. Very weak in discussing issues at hand.