Economics and Finance

Conventional wisdom explains the remarkable growth of Chinese rural industry after 1978 in terms of changes in economic policy; that rural industrialization took off through a combination of privatization, liberalization, and fiscal decentralization. This book takes issue with such claims. Using a newly-constructed dataset covering China’s 2,000 counties and complemented by a detailed econometric study of county-level industrialization in the provinces of Sichuan, Guangdong, and Jiangsu, the book sets out the continuity which underlies the process of rural industrialization in China. The development of rural industry in the Maoist period set in motion a process of learning-by-doing, whereby China’s rural workforce gradually acquired an array of skills and competencies, leading to a vastly enhanced level of industrial capability on the countryside by the late 1970s. As a result, the pace of rural industrialization accelerated well before the supposed 1978 climacteric, and the growth of the 1980s and 1990s was simply a continuation of this process. Indeed, without the prior Maoist development of skills, China’s growth during the post-1978 era would have been much slower and perhaps would not have occurred at all — as has been the case in countries such as India and Vietnam.

Informal finance consists of non-bank financing activities, whether conducted through family and friends, local money houses, or other types of financial associations. Informal finance has provided much-needed financing to small and medium enterprises (SMEs) in particular, in the face of a tightly constrained, overburdened formal banking system. Unable to obtain a bank loan, firms have relied upon individuals and informal organizations outside of the banking system in order to obtain financing for their ventures. Informal finance has played a critical role in China's economic boom of the last thirty years. This book describes the evolution, characteristics, and variation of informal finance in China, from American and Chinese perspectives. Literature by Jiang Shuxia, Jiang Xuzhao, and Li Jianjun has heretofore been available only in Chinese, while work by Kellee Tsai, Jianwen Liao, Harold Welsch, David Pistrui, and Sara Hsu has been available in English. For the first time, they come together to discuss informal financing and its many aspects. Much of the work stems from detailed surveys conducted locally, since this type of data is not normally collected by the government. Informal finance is a local and personal activity, but it also affects the macroeconomy; particularly in China, where it is pervasive.

This book analyses the prospects for services integration in South Asia, focusing on member countries of the South Asian Association for Regional Cooperation (SAARC) — India, Bhutan, Bangladesh, Pakistan, Nepal, Sri Lanka, and the Maldives. SAARC turned to trade promotion in order to achieve greater regional integration, starting with the signing of the SAARC Preferential Trade Agreement (SAPTA) in April 1993. The book discusses the role and performance of services within the region and identifies those services and areas which offer good and varied prospects for intra-regional integration. It also assesses the status of liberalization and reforms as well as current levels of intra-regional engagement in services in order to highlight the policy environment and existing opportunities and interests in the regional market. Furthermore, the book looks at multilateral and extra-regional/bilateral commitments made by the member countries of the South Asian Free Trade Agreement (SAFTA) in services and their positions on key issues in order to evaluate their preparedness to commit under SAFTA. Finally, the book considers negotiating priorities in different services and on cross-cutting issues to point out possible modalities for negotiation.

Modern Asian economic history has often been written in terms of Western impact and Asia's response to it. This book argues that the growth of intra-regional trade, migration, and capital and money flows was a crucial factor that determined the course of East Asian economic development. The chapters are organized around three main themes. First, economic interactions between Japan and China were important in shaping the pattern of regional industrialization. Neither country imported technology and organizations, and attempted to ‘catch up’ with the West alone. Japan's industrialization took place, taking advantage of the Chinese merchant networks in Asia, while the Chinese competition was a critical factor in the Japanese technological and organizational ‘upgrading’ in the interwar period. Second, the pattern of China's integration into the international economy was shaped by the growth of intra-Asian trade, migration, and capital flows and remittances. While the Western impact was mostly confined to the littoral region of China, intra-Asian trade was more directly connected with China's internal market. Both the fall of the imperial monetary system and the rise of economic nationalism in the early 20th century reflected increasing contacts with the Asian international economy. Third, in spite of the adverse political environment, East Asian merchant and migration networks exploited economic opportunities, taking advantage of colonial institutional arrangements and even political conflicts. They made a contribution to national and regional economic development in the politically more favourable environment after the Second World War by providing the valuable expertise and entrepreneurship they had accumulated before the war. The character of the international order of Asia, governed by Western powers, especially Britain, but shared also by Japan for most of the period, was ‘imperialism of free trade’, although it eventually collapsed by the late 1930s.

This book examines the current state of the Japanese employment system from an economic perspective. It also looks at how the changing economy and demography, including the prolonged recession and the rapid ageing of the population, has affected the labour market and its institutions. The main focus of the book is on the increased use of non-standard forms of labour, especially in the labour market for youth. This is seen to be partly a by-product of the long recession, but also a longer-run change in the human resource management strategy of firms. The book also examines the implications these developments will have on the income distribution in the future as many young men in this male-breadwinner society no longer have access to stable long-term jobs. Other topics examined in the book include the impact of increased educational attainment and anti-discrimination legislation on the labour market for women, the declining importance of labour unions, the low rate of immigration into Japan, and the success Japan has had in keeping older workers employed. The final conclusion of the book is that many of the aspects of the employment system for regular, full-time workers remain in place, although the system has become more flexible.

The Japanese tax system has notably changed through the periods of post‐World War II; i.e., reconstruction, rapid economic growth, and recent economic stagnation. In order to clarify the function and the effect of tax policy and practices, it is important to analyse how the Japanese tax system has developed during each period, and how it has contributed to the performance, good or bad, of the Japanese economy. In addition, it is necessary to assess successive rounds of tax reforms in the past because they have been greatly debated so far particularly concerning the adoption of Japan's value‐added tax ( the consumption tax ). Many see a great need to reform the tax system to adjust for the ongoing changes in the Japanese economy. The tax debate is always with us in relation to the changing patterns of the economy.

This book examines the transformation of the independent and isolated Korean economy into a dependent colonial economy during the period between 1876 and 1945, focusing on capital formation, economic development, and structural changes. During this 70-year period, Korea underwent three distinct stages of economic transformation: the traditional economy before the opening of the country to the outside world in 1876, the transitional economy between 1876 and 1904 under its own sovereignty, and the colonial economy under Japan from 1905-1945. This book studies the combination of changing circumstances, approaches, and experiences in the country, such as the propensities to work, produce, invest, save, and entrepreneurship, as well as institutional and economic reforms that took place during the three stages of development. It also investigates the level and distribution of income and consumption (standard of living), which reveal a number of significant patterns and characteristics of capital formation, economic development, and structural changes in the Korean economy.