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This chapter examines the evolution of China’s innovation system over the past thirty-five years, detailing how government policies, R&D investment, and strategic international engagement have spurred a remarkable surge in patent activity and technological advancement. It outlines the transition from a weak, planned economy to one where domestic enterprises dominate innovation, emphasizing the shift from quantity-focused utility model patents to an increasing quality of invention patents. The analysis highlights the role of FDI and regional dynamics in boosting local innovation while comparing domestic and foreign patenting trends. Key external challenges are discussed, including the impacts of the Belt and Road Initiative, the Sino-US trade war and technology decoupling, and the disruptions caused by the COVID-19 pandemic. Looking forward, the chapter proposes future directions in sectors such as electric vehicle batteries, semiconductors, and digital startups, stressing that achieving sustained independent innovation will require enhanced basic research, collaborative international efforts, and a move beyond reliance on government policy alone.
This chapter explores the interplay between China’s economic transformation and its shifting demographic landscape over the first two decades of the twenty-first century. It examines how an initially favorable age structure and abundant labor drove a period of material abundance and rapid growth, yielding a significant lifecycle surplus. Using a lifecycle approach with National Transfer Accounts, the authors analyze changes in labor income and consumption profiles, revealing that while early decades witnessed rising surplus driven by robust income growth and low dependency, the 2010s saw consumption outpacing income amid accelerating population aging. This resulted in a sharp contraction of the aggregate lifecycle surplus and a declining effective support ratio. The analysis further decomposes the impacts of changes in per capita income–consumption patterns versus demographic shifts, projecting that continuing aging will likely exhaust the surplus in the coming decades, posing critical challenges for China’s future economic and social policies.
This chapter offers a comprehensive overview of China’s economic transformation over the past four decades. It traces the dramatic growth in China’s GDP – from a modest base in 1990 to a global powerhouse in 2023 – and examines the contributions of capital, labor, and productivity. The chapter juxtaposes optimistic and cautious expert forecasts, highlighting challenges such as a structural slowdown, decelerating productivity, and the risks of excessive investment in real estate. It also explores the evolving dynamics of state control, the impact of global trade shifts, and the role of innovation and industrial policy in shaping future growth. Additionally, the analysis delves into demographic trends, particularly the implications of the “demographic dividend” turning into a deficit and the complexities of forecasting in a rapidly changing economic environment. Overall, the chapter sets the stage for a broader discussion on the policy reforms and strategic shifts necessary for sustaining China’s long-term economic progress.
This chapter examines Xi Jinping’s common prosperity program from a political economy perspective. Rather than primarily addressing income inequality among households, the program targets an imbalance between private capital and state power. The author argues that common prosperity is used as a tool to curtail excessive private sector influence and reassert the state’s control in the economy. Despite official statistics showing improvements in income distribution and labor share, the program pursues radical regulatory crackdowns on key private industries such as education, gaming, and tech. These measures, while intended to redistribute power and ensure political stability, risk undermining entrepreneurial incentives and aggravating long-term economic slowdown. By rebalancing the roles of the state, capital, and households, the program represents a significant departure from previous market-oriented reforms. Its political implications, including coerced corporate donations and adjustments in tax policies, illustrate a broader strategy to recalibrate the distribution of economic power in China.
Artisanal-and-small-scale gold mining supports millions of livelihoods in the Global South but is the largest anthropogenic source of mercury emissions. Many initiatives promote mercury-free technologies that small miners could employ. Few document mercury impacts. We study an alternative: instead of processing themselves, small miners sell their ore to plants employing larger-scale, mercury-free technologies that also raise gold yields. Some ore-selling occurs without policy intervention, yet impacts on incomes and mercury use remain unclear. We assess ore-selling preferences of female waste-rock collectors (jancheras) in Ecuador, using a discrete-choice experiment. Results demonstrate that jancheras generally are open to ore-selling, yet often reject options similar to a recent pilot intervention. Offers that address formalization hurdles (invoicing), inabilities to meet quantity minima (given limits upon association, storage, and credit), and constraints on trust (including in plants’ ore testing) could increase adoption by tailoring related interventions to the preferences of and challenges for defined populations.
This study addresses the urgent need for low-carbon energy transition (LCET) in the Global South, where vulnerability to climate change is high and most countries have ratified the Paris Agreement and Nationally Determined Contributions. It emphasizes the importance of research in supporting this transition, particularly through the lens of digital technologies. Despite its relevance, existing studies on the topic remain limited and fragmented. This study reviews the literature on digital infrastructure in LCET, identifies key gaps and ambiguities and offers insights to inform future research and policymaking in the Global South.
The economic valuation of recreational ecosystem services is challenging due to difficulties in obtaining geo-tagged information of users. The objective of this study is to validate crowdsourced and user-generated content in order to predict visitation patterns to 16 national parks in Spain. The results may serve to encourage its utilization in the study of recreational demand in other countries, particularly developing countries, where on-site visitor information may be limited or expensive to gather. The present article employs a negative binomial regression model to evaluate the validity of two sources of data: Flickr and mobile phones. The accuracy of predictions exhibited variation across the 16 parks, indicating that site-specific characteristics, such as the seasonality of visitation patterns, may be of significance. The utilization of mobile phone data for modelling visitors yielded enhanced predictive capacity, as shown by the goodness of fit of the estimated models.
This authoritative volume offers a comprehensive exploration of China's rapidly evolving economy from a team of leading specialists. Readers will gain crucial insights into productivity dynamics, innovation, shifting demographics, and the country's ever-changing industrial landscape –encompassing firms, real estate, and trade flows. With a keen focus on the RMB, regulatory frameworks, and the pursuit of common prosperity, this book seamlessly blends cutting-edge research, real-world case studies, and forward-thinking analysis. It delivers a balanced examination of challenges and opportunities, fostering an informed discussion on China's critical role in the global marketplace. Ideal for academics, policymakers, business professionals, and curious readers alike, this timely and accessible resource unveils the many facets of the Chinese economy, guiding you through its complexities and highlighting strategic implications for the future.
In many tourism-dependent islands, an acute imbalance between increasing demand for wastewater management and the capacity of existing sewage infrastructure represents an increased risk for ecosystems and population health. Given that locals may be opposed to increasing tourism taxes to fund investments in sewerage, promoting charitable giving among tourists may be an alternative to improve wastewater management in tourist destinations. Using a contingent valuation survey, this study assesses whether tourists are willing to donate to improve wastewater management in San Andres Island, Colombia. Split-sample treatments were implemented to examine the response of tourists' giving preferences to priming communications regarding the effects of poor wastewater management. Results indicate that tourists are willing to donate to improve local wastewater management. Our findings also provide useful insights about tourists' giving preferences to design effective charitable giving campaigns to improve wastewater management.
Using novel nighttime lights and high-resolution atmospheric reanalysis, this paper exploits exogenous fluctuations in temperature and precipitation to identify the causal effects of weather disturbances on local economic growth in the Philippines – the world’s most disaster-prone country. Our findings reveal that heightened temperature variability significantly dampens growth, but only in poor municipalities. This effect persists for at least 2 years after the initial shock. Furthermore, the relationship between weather shocks and growth is nonlinear. We also demonstrate that adverse weather events impede growth by disrupting agricultural productivity and essential service sectors, including wholesale and retail trade, health and education. Overall, our results highlight the importance of understanding the distributional impact of climate change within countries, its underlying mechanisms, and how economic development policies can help shield poor municipalities from the vagaries of the weather.
It has long been challenging to assess local residents’ quality of life, which is affected by numerous natural and man-made amenities. We develop a novel compensating differential model of quality-of-life rankings applicable to developing countries by introducing farm income into the household budget alongside housing and labour market differentials. We apply this model to Indonesia using detailed household data from the Indonesian Family Life Survey for two different time periods and combining estimates of agricultural, off-farm labour and housing market differentials. We find heterogeneous amenity impacts across the agricultural and off-farm labour sectors. We use our model to show how significant changes in rankings across time are consistent with contemporaneous internal migration patterns in Indonesia. These rankings yield important information for policymakers on expected changes in migration and can be used to help inform public investment.
Will rising temperatures from climate change affect labour markets? This paper examines the impact of temperature on hours worked, using panel data from Peru covering the period from 2007 to 2015. We combine information on hours worked from household surveys with weather reanalysis data. Our findings show that high temperatures reduce hours worked, with the effect concentrated in informal jobs rather than in weather-exposed industries. These results suggest that labour market segmentation may shape how climate change affects labour outcomes in developing countries.
While previous scientific literature has found evidence that warming winters result in a loss of crop yields, recent studies suggest that temperature alone may not be the sole factor in determining yields. In this study, we investigate multiple climatic factors (freezing degree days (FDD) and snow cover fraction) to evaluate the heterogeneous impact of snowpack insulation on winter wheat yields in China. We find that a unit increase in FDD causes a loss of 2.37 kg/hectare in winter wheat yields. Furthermore, our results show that snowpack insulation has a statistically significant negative effect on winter wheat yields at lower and middle quantiles, but a statistically significant positive effect at higher quantiles of the winter wheat yields distribution, suggesting that snowpack insulation is important in maintaining higher winter wheat yields.