MINT427: The China Syndrome: Modern Reforms in China's Economy and Their Global Implications

Graduate Institute of International and Development Studies

MINT427 - Spring 2025 - Course- 6 ECTS

Thursday 10:15-12:00

Lecturer: Yuan Zi
Office hours: Wednesday 10:15-12:00 (class weeks)


Course Description

China's domestic economic reforms and growing integration into the global economy have raised countless questions about its economic growth and development in the past, present and more importantly its impact on other economies in the future. This course will provide students with the knowledge and analytical skills to address the related questions, through a series of lectures covering various aspect of the Chinese economy and its reforms since the late 1970s. The course will have a special focus on the role of international trade in China's structural transformation, covering topics from China's WTO accession to its recent trade war with the United State.


Syllabus

Class Materials

Under each lecture, you will find a list of reference papers relevant to the topics covered. While you are not expected to read all of these materials, they are provided for your reference. However, you are expected to read the papers designated for presentation to actively participate in class discussions.

Relevant Books:

  • Vogel, Ezra F. Deng Xiaoping and the transformation of China. Harvard University Press, 2011.
  • Naughton, Barry. 2007. The Chinese Economy: Transitions and Growth, The MIT press.
  • Justin Yifu Lin, Fang Cai, and Zhou Li. 2003. The China Miracle: Development Strategy and Economic Reform. Chinese University Press.
  • Lin, Justin Yifu. Demystifying the Chinese economy. Cambridge University Press, 2011

Pre-requisites

The course assumes basic knowledge of economics and statistics.

Grading

The grade will depend on class participation (20%), a paper presentation (40%), and an essay (40%).

  • Class participation: during the final 15 minutes of each class, we will engage in an open discussion centered on the effects of China's economic transformation or reform (the day's topic) on other economies. Students are encouraged to actively join the conversation by asking questions or expressing their opinions.
  • Presentation: the presentation will focus on a paper from the presentation list, covering its main contents, contributions to the literature, strengths, and weaknesses.
  • Essay: the essay will be a 5-10 page essay on one specific topic related to Chinese economy --- either a class-covered topic or a topic of your own interest. Prioritize brevity and articulate explanations.

Teaching Plan (preliminary)

  • Week 1: Introduction
  • Week 2: China's Development Strategy before 1978
  • Week 3: Agriculture reforms
  • Week 4: Reforms on firms
  • Week 5: Trade reforms and FDI
  • Week 6: Migration (hukou) reforms
  • Week 7: Population policies
  • Week 8: Education policies
  • Week 9: Infrastructure investment
  • Weeks 10-13: Group Presentations
  • Week 14: Conclusion

Outline (preliminary)

Chapter 1. Introduction

Slides

Reading:

  • Naughton, Chapter 1

Chapter 2. China's Development Strategy before 1978

Slides

Reading:

  • Naughton, Chapters 3, 4 & 6.
  • Lin, Justin Yifu. Demystifying the Chinese economy. Cambridge University Press, 2011, Chapters 3, 4.

Chapter 3. Agriculture reform

Slides

Reading:

  • Naughton, Chapter 10
  • Lin, Justin Yifu. 1992. Rural reforms and agricultural growth in China. The American Economic Review, 34-51.
  • Meng, Xin, Nancy Qian, and Pierre Yared. "The institutional causes of China's great famine, 1959--1961." The Review of Economic Studies 82.4 (2015): 1568-1611.
  • Lin, Justin Yifu. Demystifying the Chinese economy. Cambridge University Press, 2011, Chapters 7.

Chapter 4. Reforms on firms

Slides

Reading:

  • Naughton, Chapter 13
  • Lin, Justin Yifu. Demystifying the Chinese economy. Cambridge University Press, 2011, Chapters 8, 9.
  • Vogel, Ezra F., 2011, "Deng's Finale: The Southern Journey, 1992" in Vogel, Deng Xiaoping and the Transformation of China, Harvard University Press, pp. 664-690

Chapter 5. Trade reforms and FDI

Slides

Reading:

  • Naughton, Chapters 16, 17
  • Vogel, Ezra F., 2011, "Experiments in Guangdong and Fujian, 1979-1984" in Vogel, Deng Xiaoping and the Transformation of China, Harvard University Press, pp. 394-422.
  • Michael Spence, "Why China grows So Fast?," Wall Street Journal, Jan. 23, 2007.

Chapter 6. Migration (hukou) reform

Slides

Reading:

  • Young, Jason. "China's hukou system." Basingstoke: Palgrave Macmillan 10 (2013): 9781137277312.
  • Chan, Kam Wing, and Li Zhang. "The hukou system and rural-urban migration in China: Processes and changes." The China Quarterly 160 (1999): 818-855.

Chapter 7. Population policies

Slides

Reading:

  • Naughton, Chapter 7, 8, 9

Demography

  • Wei, Zheng, and Rui Hao. "Demographic structure and economic growth: Evidence from China." Journal of Comparative Economics 38.4 (2010): 472-491.
  • Yi Chen, Hanming Fang. 2021. The long-term consequences of China's "Later, Longer, Fewer" campaign in old age. Journal of Development Economics 151, 102664.
  • McElroy, Marjorie, and Dennis Tao Yang. 2000. "Carrots and Sticks: Fertility Effects of China's Population Policies." American Economic Review 90(2): 389--92.

One Child Policy

  • Ahn, Namkee. 1994. "Effects of the One-Child Policy on Second and Third Births in Hebei, Shaanxi and Shanghai." Journal of Population Economics 7(1): 63--78.
  • Zhang, Junsen. "The evolution of China's one-child policy and its effects on family outcomes." Journal of Economic Perspectives 31.1 (2017): 141-60.
  • Li, Hongbin, and Junsen Zhang. 2007. "Do High Birth Rates Hamper Economic Growth?" Review of Economics and Statistics 89(1): 110--17.

Gender

  • Ebenstein, Avraham. "The "missing girls" of China and the unintended consequences of the one child policy." Journal of Human resources 45.1 (2010): 87-115.
  • Goodkind, Daniel. 2011. "Child Underreporting, Fertility, and Sex Ratio Imbalance in China." Demography 48(1): 291--316.

Chapter 8. Education policies

Slides

Reading:

  • Li, Hongbin, et al. "The end of cheap Chinese labor." Journal of Economic Perspectives 26.4 (2012): 57-74.
  • Lixu, Li. "China's higher education reform 1998--2003: A summary." Asia Pacific education review 5.1 (2004): 14-22.
  • Che, Yi, and Lei Zhang. "Human capital, technology adoption and firm performance: Impacts of China's higher education expansion in the late 1990s." The Economic Journal 128.614 (2018): 2282-2320.

Papers for Group Presentation

Note: Topics will be allocated to groups based on their preferences. Each group will then choose one paper to present under their assigned topic.

L2 [Growth]

  • Borensztein, Eduardo, and Jonathan D. Ostry. "Accounting for China's growth performance." The American Economic Review 86.2 (1996): 224-228.
  • Zhu, Xiaodong. "Understanding China's growth: Past, present, and future." Journal of Economic Perspectives 26.4 (2012): 103-24.

L3 [Agriculture]

  • Kung, James Kai-Sing, and Shuo Chen. "The tragedy of the nomenklatura: Career incentives and political radicalism during China's Great Leap famine." American Political Science Review 105.1 (2011): 27-45.
  • Yu, Yue. "Land-use regulation and economic development: Evidence from the farmland red line policy in China." Job Market Paper (2019).

L4 [Firm]

  • Lin, Justin Yifu, Fang Cai, and Zhou Li. "Competition, policy burdens, and state-owned enterprise reform." The American Economic Review 88.2 (1998): 422-427.
  • Nolan, Peter, and Godfrey Yeung. "Big business with Chinese characteristics: Two paths to growth of the firm in China under reform." Cambridge Journal of Economics 25.4 (2001): 443-465.

L5 [Trade]

  • Khandelwal, Amit K., Peter K. Schott, and Shang-Jin Wei. "Trade liberalization and embedded institutional reform: Evidence from Chinese exporters." American Economic Review 103.6 (2013): 2169-2195.
  • Lu, Yi, Zhigang Tao, and Lianming Zhu. "Identifying FDI spillovers." Journal of International Economics 107 (2017): 75-90.
  • "Alcatel in China: Business as an adventure" IMD Business School Case Study (2003) https://www.imd.org/case-study/alcatel-in-china-business-as-an-adventure/

L6 [Migration]

  • Chan, Kam Wing, and Will Buckingham. "Is China abolishing the hukou system?." The China Quarterly 195 (2008): 582-606.
  • Tian, Yuan. "International trade liberalization and domestic institutional reform: Effects of wto accession on chinese internal migration policy." Review of Economics and Statistics (2022): 1-45.

L7 [Population]

  • Lee, James, and Wang Feng. "Malthusian models and Chinese realities: The Chinese demographic system 1700--2000." Population and Development Review 25.1 (1999): 33-65.
  • Huang, Wei, Xiaoyan Lei, and Ang Sun. "Fertility restrictions and life cycle outcomes: Evidence from the One-Child Policy in China." Review of Economics and Statistics 103.4 (2021): 694-710.

L8 [Education]

  • Li, Hongbin, et al. "Human capital and China's future growth." Journal of Economic Perspectives 31.1 (2017): 25-48.
  • Rosenzweig, Mark R., and Junsen Zhang. 2009. "Do Population Control Policies Induce More Human Capital Investment? Twins, Birth Weight and China's 'One-Child' Policy." Review of Economic Studies 76(3): 1149--74.