This article summarizes government publications focusing on excess capacity from the 1990s to 2016 and argues that the market-oriented principle needs to be established to deal with the long-standing excess capacity issues in China. Based on the specificity of the long-term excess capacity in China, this article puts forward the hypothesis: The excess capacity in China is derived from the enterprise’s overinvestment, and the government intervention is one of the main drivers of the problem. The intervention is actuated by the GDP-based government performance assessment through such means as offering privileges on land use, environmental ignorance, natural resource provision and financial support. This article (a) calculates capacity utilization of 30 manufacturing industries, (b) builds a ‘mediation effect model of overinvestment’, and (c) makes use of the industrial data, economic development data and capacity utilization from 1998 to 2017 to test the hypothesis. The result shows that government intervention indeed has a significant influence on excess capacity. The support for land use and the tolerance for environmental pollution are two of the most persuasive reasons. Therefore, the Chinese government needs to make greater efforts to deepen the market reforms, standardize and improve the factor market so as to accelerate innovation, and push for industrial upgrading.
This thesis investigates the nature and determinants of well-being with a focus on older adults. The study consists of three empirical papers, examining the effect from three perspectives: social capital, household traveling expenditure and income inequality. Well-being is measured using different aspects such as happiness, life satisfaction, and mental health. Research methods used include factor analysis, estimations by generalised least square and system generalized method of moments as well as hierarchical linear modeling. Using primary survey data, the first paper provides evidence that social capital is more (less) significant than income in improving subjective (objective) well-being, which calls for recalibration in the policy balance between targeting social capital and addressing poverty. Social capital affects well-being through different channels depending on whether it provides marketable or nonmarketable returns. For instance, renqing (gifts and money an individual can give by way of reciprocity towards receiving favours from others) and community integration in the form of social networks improve objective well-being. Social capital in the form of trust on the other hand boosts subjective well-being. Age too has different effects on subjective and objective well-being. While an older person is more satisfied with life, there is however a struggle in owning material things. The lack of correlation between subjective and objective well-being measures further complicates the policy debate. A robust approach to understanding and enhancing well-being in rural, remote areas should thus be an urgent priority in regional policy analyses.
Foreign direct investment (FDI) can benefit innovation activity in host countries through spillover channels, such as reverse engineering, demonstration effects, and supplier–customer relationships. Using data from 26 countries along the Belt and Road route (BRCs) and 32 non-BRCs, we identified positive causal effects of the Chinese outward FDI on the innovation capacities in technology-intensive industries of both BRCs and non-BRCs. However, this effect varies depending on the host countries’ economic development levels. The impact of Chinese OFDI on the general innovation performance in host countries is absent. Meanwhile, the implementation of the BRI has on the whole, a negative impact on BRCs’ innovation performance.
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