EC292 Economic Transition in China

Since economic reforms were introduced in 1978, China has become the world's fastest growing economy and a dominant player in the global economy. This course presents a survey of China's dramatic transition from central planning to this dynamic, market-based economy.

The course has three primary goals. First, it aims to foster an informed perspective of China and its economy. In order to do so, we will study how political ideologies, public policies, and economic and social institutions have evolved and how each of these impacted the Chinese economy. Second, we will analyze the Chinese experience to think critically about the process of economic and social change more generally; China's experiment with socialism and its subsequent efforts to promote the market system make it a compelling case study for understanding how institutions and institutional change affect socioeconomic development. Third, we will evaluate the implications of China's economic emergence for the future of China and for the global economy.

To achieve these goals, we will study a broad range of topics, including Mao Zedong thought, central planning, economic reform, poverty and inequality, migration, labor rights, foreign direct investment, trade, social policy, and the environment.  Readings will be drawn from economics, sociology, political science, and anthropology. While recognizing the importance of an interdisciplinary approach, we will emphasize the application of economic theories pertaining to markets, incentives, institutions, and economic development.

 

Prerequisites
All of the readings we discuss in this class assume familiarity with the economic concepts and skills taught in Principles of Economics and Introductory Statistics. If you have difficulty remembering definitions or ideas from these courses, please see me during office hours.

Required Readings
The textbook for this course is Barry Naughton's The Chinese Economy: Transitions and Growth (2007).  This highly-readable text provides a superb introduction to the origins of the modern Chinese economy.  This textbook will be augmented with additional readings from other books, academic journals, and the popular press, as detailed below.  All of these readings will be made available on the course website.  The electronic version of this syllabus includes links to the appropriate content; you must log in to gain access to these materials.

Please note that some of the assigned readings include topics and methods that are quite advanced. When you encounter particularly dense or difficult passages in the reading, please read for the main ideas. Clarify outstanding questions and issues with the instructor prior to class.

You are also responsible for following current political, social, and economic events in China.  I particularly recommend The Economist for excellent coverage of the Chinese economy.  The China Daily and The New York Times also offer in-depth coverage.

Pronunciation and Spelling
The majority of the readings use pinyin Romanization for Chinese words, and you will be expected to do the same in your written work unless the alternative Romanization is well-known, e.g., Peking and Yangtze, in which case you may use either. If you encounter words written in alternative systems, e.g. the Wade-Giles system, and would like to know the pinyin spelling, please refer to this guide.

 

Graded Assignments
Your grade will be a weighted average of scores received on two examinations, two short papers, one geography test, one in-class debate, and an undisclosed number of New Learning Quizzes (NLQs). Participation in class discussion is also expected; in cases where a student is on the margin between two final grades, consistent and constructive class participation may make a positive contribution toward the grade.

• Geography Quiz: Thursday, September 11 (5%) This quiz will assess your knowledge of basic Chinese geography. You will be responsible for labeling a map with the names of provinces, autonomous regions, and municipalities. You are also required to know the capital of each province and autonomous region, as well as the geographic background presented in the first class. You will be provided with several maps for your reference, but you may wish to use other sources as well.
  

• Examinations There will be two 120-minute examinations. Each exam will consist of several short answer questions, true/false/uncertain questions, identifications, and/or several essay questions. The examinations will draw heavily from both lecture materials and the assigned reading.  The mid-term is scheduled from 4:00 - 6:00 on Thursday, October 9. Please plan accordingly.
  
  The main topics for each exam are described below:
  
  
• • First Examination: Thursday, October 9 (20%)
    The pre-industrial period; Nineteenth century imperialism; central planning; agricultural collectivization and the Great Leap Forward; economic growth under Mao; theories of economic reform; "socialism with Chinese characteristics"; the SOE problem; SEZs and global integration; and Chinese federalism.
    
    
  • Second Examination: TBA (20%)
    Economic growth; poverty and inequality; migration; labor rights; foreign direct investment; trade; exchange rate policy; intellectual property rights; the demographic crunch; environmental sustainability; and the Beijing Olympics.
    

• Short Papers
  You are responsible for writing two short papers, each due at the beginning of class.  Each paper should be no longer than 3 double-spaced pages in length (12-point Times New Roman font, 1-inch margins). You must include a bibliography of all works cited (not included in the page count); a separate title page is optional.  I will not grade beyond the third page of any paper, nor will I will read any paper that fails to meet these formatting guidelines.
  
  
  • Paper #1: due Thursday, September 25 (15%)
    What aspects of the Mao legacy presented the largest hurdles to lifting China out of poverty for Mao's successors?  Identify the two most important issues and discuss how they weakened the economy inherited by Deng Xiaoping.
    
    
  • Paper #2: due Thursday, December 4 (15%)
    Should China be concerned about the dubious distinction of becoming the world’s largest emitter of CO2?  If not, why not?  If so, what policies should China pursue to meet its growing electricity demand while reducing its carbon emissions?
    

• In-Class Debate: Tuesday, November 20 (15%)
  Resolution: Without accelerated reforms and major new policy initiatives, the rapid growth experienced by China will unravel before its economy overtakes the US economy.
  Note: Students will be randomly assigned to small teams consisting of 2-3 students each approximately 2 weeks prior to the debate. Each debate will last one hour.
  

• New Learning Quizzes (10% total)
  NLQs are short, unannounced quizzes that ask you to respond to the assigned reading. NLQs have several purposes:
  
  
  1. to provide incentive for you to stay on top of the assigned reading;
     
  2. to enable you to demonstrate that you have internalized the reading and can think deeply about economic issues; and
     
  3. to give you a sense of what to expect in your examinations.

  There will be at least one but no more than five NLQs held throughout the semester.  Each will count equally toward your final grade.

Missed/Late Assignments
A missed NLQ, examination, geography test, or debate will result in grade of zero for the assignment unless authorized by the Dean of Students or the Colby physician. For excused absences, the remaining assignments will be re-weighted appropriately.  Papers are due at 11:00 AM; any late papers will be penalized by 2*sqrt(# of hours late), rounding up.  No paper will be accepted beyond 48 hours past the deadline.

Special Accommodations
Extra time on examinations may be arranged for eligible students.  Accommodations must be requested no later than September 19. 

Academic Honesty
You are expected to adhere to Colby's policies on academic honesty. In accordance with these policies, students who plagiarize or cheat will be dismissed from the class with an F. Any such incidents will be reported to the Dean of Students and may result in suspension or expulsion.
 

September 4
Introduction and Geography
Naughton, chapter 1
Fallows, “China Makes, the World Takes”

September 9
China’s Pre-Socalist Economy: The Pre-Industrial Period
Lin, “The Needham Puzzle: Why the Industrial Revolution did not Originate in China”

September 11
China’s Pre-Socialist Economy: Nineteenth Century Imperialism
Riskin, China’s Political Economy, chapter 2
GEOGRAPHY QUIZ

September 16
The Socialist Period: Central Planning
Naughton, Chapter 3.1-3.3
IN-CLASS EXPERIMENT: CENTRAL PLANNING

September 18
The Socialist Period: Agricultural Collectivization and the Great Leap Forward
Lin, "Collectivization and China's Agricultural Crisis"
EVENING FILM: CHINA IN REVOLUTION: THE MAO YEARS

September 23
The Socialist Period: Economic Growth Under Mao
Naughton, "The Pattern of Economic Growth in the Mao Era"

September 25
The Reform Period: Theories of Reform
Naughton, chapter 4.1-4.4
PAPER #1 DUE

September 30
The Reform Period: “Socialism with Chinese Characteristics”
Perkins, “Completing China’s Move to the Market”

October 2
The Reform Period: The State Owned Enterprises Problem
Steinfeld, “The Living Museum of Iron and Steel Technology”

October 7
The Reform Period: Special Economic Zones and Global Integration
Naughton, chapter 17.1-17.2
Wei, “Acquisition of Technological Capability through Special Economic Zones”

October 9
The Reform Period: Federalism, Chinese Style
Young, "The Razor's Edge"
EXAM #1: 4-6 PM

October 14
Fall Break – No Class

October 16
No Class

October 21
Post-Reform China: Economic Growth
Naughton, chapter 6
Rawski, “What is Happening to China’s GDP Statistics?”

October 23
Post-Reform China: Poverty and Inequality
Naughton, chapter 9
Zhang and Kanbur, “Spatial Inequality in Education and Health Care in China”

October 28
Post-Reform China: Energy, Environment, and Society
Brown, Magee, and Xu, “Socioeconomic Vulnerability in China's Hydropower Development"
Guest lecture (4:00 PM, Diamond 122): Desiree Tullos, "Assessing the Impact of Environmental Impact Assessments on Science and Policy: The Three Gorges Project" 
Guest lecture (7:00 PM, Ostrove Auditorium): "On the Completion of the Three Gorges Project and China's Environmental Issues"

October 30
No Class

November 4
Post-Reform China: Migration
de Brauw, Alan, Jikun Huang, Scott Rozelle, Linxiu Zhang, and Yigang Zhang, "The Evolution of China's Rural Labor Markets During the Reforms"
IN-CLASS FILM: DA GONG MEI

November 6
Post-Reform China: Labor Rights and Social Protest
Friedman, “The Social Responsibility of Business is to Increase its Profits”
Hilton, “Made in China”
Guest lecture: Mary Gallagher (time TBA)
Guest lecture: Patricia Thornton (time TBA)

November 11
Post-Reform China: Foreign Direct Investment
Naughton, 17.1-17.4
Liu, Xu, and Liu, “Foreign Investment in China: Firm Strategies.” In The Globalization of the Chinese Economy (pp. 221-233)

November 13
Post-Reform China: Intellectual Property Rights
Naughton, chapter 15
Hessler, “Car Town”

November 18
Post-Reform China: Trade
Naughton, chapter 16
Hughes, “A Trade War with China?”
Weisert, "Coca-Cola in China: Quenching the Thirst of a Billion"

November 20
IN-CLASS DEBATE

November 25
Opportunities and Challenges: The Demographic Crunch
Naughton, 7.1-7.4
Cai and Lavely (pp. 13-22)
Wang, “Can China Afford to Continue its One Child Policy?”

November 27
Thanksgiving Day

December 2
Opportunities and Challenges: Environmental Sustainability
Naughton, chapter 20
Economy, “The Great Leap Backward?”

December 4
PAPER #2 DUE

Note: This schedule is subject to frequent revision.  Check the course website frequently for updates.