China's Integration with the World : Development as a Process of Learning and Industrial Upgrading

The process of development is full of uncertainties, especially if it is a process of transition from a planned economy to a market oriented one. Because of uncertainties and country specificity, development must be a process of learning, selective...

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Bibliographic Details
Main Authors:	Lin, Justin Yifu, Wang, Yan
Format:	Policy Research Working Paper
Language:	English
Published:	Washington, DC: World Bank 2012
Subjects:	ACCOUNTING STANDARDS ADMINISTRATIVE CONTROLS AGRICULTURE ALLOCATION BACKED SECURITIES BALANCE SHEET BANK DEPOSITS BANK LENDING BARRIERS TO ENTRY BENCHMARK BUDGET CONSTRAINTS CAPACITY BUILDING CAPITAL ACCOUNT CAPITAL ACCUMULATION CAPITAL INFLOWS CAPITAL INTENSITY CAPITAL STOCK CENTRAL BANK CENTRALLY PLANNED ECONOMIES CENTRALLY PLANNED ECONOMY CLOSED ECONOMY COMMERCIAL BANK COMMERCIAL BANKS COMMODITIES COMMODITY COMMODITY PRICE COMPARATIVE ADVANTAGE COMPARATIVE ADVANTAGES COMPETITIVE MARKETS COMPETITIVENESS CONTROLLED PRICES COST OF CAPITAL COST STRUCTURE CREDIT RATIONING CURRENT ACCOUNT SURPLUS DEBT DECENTRALIZATION DEMAND FOR CREDIT DEPOSIT DEPOSIT RATE DEVALUATION DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DEVELOPMENT STRATEGY DISPOSABLE INCOME DIVIDENDS DOMESTIC MARKET DOMESTIC PRICES ECONOMIC DEVELOPMENT ECONOMIC GEOGRAPHY ECONOMIC GROWTH ECONOMIC IMPLICATIONS ECONOMIC LIBERALIZATION ECONOMIC PERFORMANCE ECONOMIC REFORM ECONOMIC REFORMS ECONOMIC RESEARCH ECONOMIC STRUCTURE ECONOMIC SYSTEM ECONOMIC THEORY EQUIPMENT EQUITY MARKET EXCHANGE RATE EXCHANGE RATE SYSTEM EXCHANGE RATES EXPORT GROWTH EXPORT MARKET EXPORT PROCESSING ZONES EXPORT SECTORS EXPORTER EXPORTERS EXPORTS EXTERNALITIES FINANCIAL CRISIS FINANCIAL INNOVATIONS FINANCIAL INSTRUMENTS FINANCIAL REFORMS FINANCIAL SECTORS FINANCIAL STRUCTURE FINANCIAL SYSTEM FISCAL DECENTRALIZATION FISCAL POLICIES FISCAL POLICY FIXED ASSETS FIXED CAPITAL FOREIGN BANK FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN FIRMS FOREIGN INVESTMENT FOREIGN INVESTORS FOREIGN TRADE FOREIGN VALUE GDP GINI COEFFICIENT GLOBAL ECONOMIC PROSPECTS GLOBAL ECONOMY GNP GROSS FIXED CAPITAL FORMATION GROWTH IN TRADE GROWTH RATE GROWTH RATES HUMAN CAPITAL INCENTIVE STRUCTURE INCOME INCOME DISTRIBUTION INCOMES INDUSTRIAL COUNTRIES INDUSTRIALIZATION INEFFICIENCY INFANT INDUSTRY ARGUMENT INFLATION INSTITUTIONAL CAPACITY INSTITUTIONAL DEVELOPMENT INTEREST PAYMENTS INTEREST RATE INTEREST RATE POLICY INTERNATIONAL BANK INTERNATIONAL COMPETITION INTERNATIONAL MARKET INTERNATIONAL MARKETS INTERNATIONAL TRADE INVESTING INVESTMENT CLIMATE JOB CREATION JOINT VENTURES LABOR MARKET LEGAL ENVIRONMENT LEGAL FRAMEWORK LIBERALIZATION OF TRADE LOAN LOAN RATES LOCAL BANKS LOCAL GOVERNMENTS LOW INTEREST RATE LOW INTEREST RATES LOW-INCOME COUNTRIES LOW-INCOME COUNTRY MACROECONOMIC POLICIES MANUFACTURING INDUSTRY MARKET CONDITION MARKET CONDITIONS MARKET DEMAND MARKET DEVELOPMENT MARKET ECONOMIES MARKET ECONOMY MARKET PRICE MARKET PRICES MARKET SIZE MONOPOLY MORTGAGE NATIONAL INCOME NATIONAL SECURITY NATURAL CAPITAL NATURAL ENDOWMENTS NATURAL RESOURCES NEOCLASSICAL ECONOMICS NEW PRODUCTS OPPORTUNITY COSTS OUTPUTS OUTSTANDING LOANS PLANNED ECONOMY POLITICAL ECONOMY POLLUTION PRICE DECLINES PRICE DISTORTION PRICE DISTORTIONS PRIME LENDING RATE PRIVATE ENTERPRISE PRIVATE SECTOR PRIVATE SECTOR DEVELOPMENT PRIVATE SECTOR GROWTH PRIVATIZATION PRODUCTION FUNCTION PRODUCTION STRUCTURE PROPERTY RIGHTS PUBLIC GOODS PUBLIC POLICY RAPID DEVELOPMENT RAPID ECONOMIC GROWTH RAPID EXPANSION RAPID GROWTH RATE OF RETURN REAL GDP REAL GROSS DOMESTIC PRODUCT REGULATORS REINVESTMENT REPUBLIC RESERVES RETURNS SAVINGS SAVINGS RATES SHARE OF CREDIT SPECIALIZATION STATE ENTERPRISES SUSTAINABLE GROWTH SWAP TAX TOTAL FACTOR PRODUCTIVITY TOTAL FACTOR PRODUCTIVITY GROWTH TOTAL OUTPUT TRADE LIBERALIZATION TRADE POLICY TRADE PROTECTION TRADE REFORMS TRADE REGIMES TRADING UNEMPLOYMENT UNEMPLOYMENT RATE VALUE ADDED WAGE RATES WAGES WORLD ECONOMY WORLD INVESTMENT REPORT WORLD TRADE WTO
Online Access:	http://documents.worldbank.org/curated/en/2008/12/10126590/chinas-integration-world-development-process-learning-industrial-upgrading http://hdl.handle.net/10986/6336

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Summary:	The process of development is full of uncertainties, especially if it is a process of transition from a planned economy to a market oriented one. Because of uncertainties and country specificity, development must be a process of learning, selective adaptation, and industrial upgrading. This paper attempts to distill lessons from China's reform and opening up process, and investigate the underlying reasons behind China's success in trade expansion and economic growth. From its beginnings with home-grown and second-best institutions, China has embarked on a long journey of reform, experimentation, and learning by doing. It is moving from a comparative advantage-defying strategy to a comparative advantage-following strategy. The country is catching up quickly through augmenting its factor endowments and upgrading industries; but this has been only partially successful. Although China is facing several difficult challenges - including rising inequality, an industrial structure that is overly capital and energy intensive, and related environmental degradation - it is better positioned to tackle them now than it was 30 years ago. This paper reviews the drivers behind China's learning and trade integration and provides both positive and negative lessons for developing countries with diverse natural endowments, especially those in Sub-Saharan Africa.

China's Integration with the World : Development as a Process of Learning and Industrial Upgrading

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