Volume 10, Issue 3

General Secretary Xi Jinping’s important exposition on building the new development pattern is an important theoretical viewpoint of socialist political economy with Chinese characteristics. The theory is to understand and reveal the objective law of the development of things, which requires us to use the theoretical method of economics to demonstrate the understanding and grasp of the objective law of the economy. The ideological source of the important exposition on new development pattern can only be explored in Marxist theory. Marx’s surplus value theory is based on an analysis of the economic cycle of capitalist domestic production, distribution, circulation and consumption, and reveals the general law of socialized mass production. The important exposition on the new development pattern is precisely the application, innovation and development of this scientific principle under the condition of socialist economy. Scholars should not examine, understand or explain the objective requirement of “taking the domestic market as the mainstay” from the perspective of “dependence on foreign trade”. An empirical study on the contribution of China’s three major demands to economic growth shows that the important judgment on the new development pattern not only reveals the basic characteristics of China’s economic development, but also points out its future trend. That “domestic and overseas markets reinforce each other” is not only a summary of China’s historical practice in its economic interaction with the rest of the world, but also denies the one-sided theoretical viewpoint in Western mainstream international economics, and reveals the objective law of the dynamic balance between China and the open world economy on the basis of pluralistic balance. The important exposition on the new development pattern also contains the main contents of how to implement the new development philosophy and deepen the reform inevitable in building a modern socialist country in the new development stage. It is the theoretical cornerstone of the guilding ideology of deepening reform.

The paper measures the industrial structure distortion (ISD) index by region in China from 1978 to 2016 using data on employment and output shares of the three industries. It also analyzes the impact of ISDs by region on energy intensity using a spatial panel model. The results show that since the reform and opening up, the ISD index by region has declined significantly, with the lowest index in the eastern region, the medium one in the central region and the highest in the western region. The estimated results of the spatial econometric model indicate that there is a significant inter-regional dependence of energy intensity in China; there is a significant indirect effect of ISD, despite no significant direct effect on energy intensity; in terms of total effect, ISD is an important factor inhibiting the decline of energy intensity. The results also unveil that higher energy prices and foreign trade are positive factors declining energy intensity, while FDI worsens energy intensity and R&D spending has no significant positive impact on curbing energy intensity. In order to reduce energy intensity, China should work to eliminate the micro cause of ISDs, promote the transfer of agricultural labor, establish a market-oriented mechanism for energy price formation, and enhance the efficiency of R&D spending.

What will be the impact of property tax levy (RPT) on China’s housing price? The conclusions from existing research are conflicting, failing to pinpoint how RPT will affect housing price and rent. More crucially, theoretical economic models are missing in clearly describing the operating mechanisms of the tax’s impact. Starting with a theoretical model of RPT, housing price and rent, the paper derives the path and mechanism of RPT affecting housing price and rent, and provides insights on the choice of timing for China to adopt and levy RPT. Our simulation results show that under China’s circumstances, if the effective RPT rate is 0.5% and the RPT revenue is not used to increase public services, the tax may cause a housing price decline between 8.3% and 12.5%. If the RPT revenue is used for basic public services, the housing price decline will be as small as 1.7% to 2.5%, but rent may rise by 6.7% to 20%. The reason for the sharp drop in housing price is the bubble; the premise of a rent hike is that the public services that renters can benefit from are substantially improved. Based on the impact of RPT on housing price fluctuation, the period after the market has gradually squeezed out the housing price bubble may be among the best windows for adopting RPT.

The paper calculates the number of production stages for measurement of production segmentation, and discusses and depicts the microscopic impacts and effects of production segmentation of labor division of the global value chain on enterprise markup. The DLW method is used to calculate the markup of Chinese enterprises, the fixed-effect model is used to analyze the impact of labor division of the global value chain on enterprise markup, and an instrumental variable method is constructed to relieve endogeneity. The research findings show that enterprises have significantly increased their markup by choosing global production segmentation, international production segmentation and domestic production segmentation. Global production segmentation can significantly increase the markup of low-productivity enterprises, hi-tech enterprises and private enterprises. Particularly, low-productivity enterprises choose international production segmentation and hi-tech enterprises choose domestic production segmentation. Production segmentation can offset to a certain extent low markup of export enterprises and domestic-oriented enterprises caused by the “competition effect”. In addition, enterprises’ “technological progress effect” and “trade cost effect” are two possible channels by which production segmentation facilitates the increase of markup. The paper enriches and expands the literature about the impacts of labor division of the global value chain on enterprise markup, the robustness is analyzed from the perspectives of enterprise heterogeneity, industrial & technical heterogeneity and structure, and the impact mechanism is validated through the intermediate effect model. Our important findings are of important implications for solving the “low markup trap” of Chinese enterprises and enhancing labor division of the global value chain of enterprises.

From the perspective of international trade efficiency and trade uncertainty, this paper analyzes the impact of digital economy development (DED) in importing countries on China’s exports. Theoretically, importing countries’ DED can reduce the trade cost of China’s exports, and then improve the export efficiency of China. On the other hand, the intensified market competition in importing countries resulting from DED and the changes in data transmission policies may also increase the uncertainty of China’s export trade. This paper uses the networked readiness index (NRI) to measure the DED level of different countries, and the heterogeneous stochastic frontier gravity (HSFG) model to empirically analyze the data of China’s exports to 115 countries and regions in the period of 2007−2015. The results show that the DED in importing countries can significantly reduce the loss of China’s export efficiency and improve the efficiency of China’s export trade, and this effect is more obvious for China’s exports to low- and middle-income countries. However, importing countries’ DED may also increase the uncertainty of China’s export trade. The development of global digital economy brings new opportunities to international trade and new challenges to China’s export. This paper provides a basis for China to strengthen its own DED, deepen international exchanges and cooperation, guide enterprises’ transformation and upgrading, and improve their competitiveness and anti-risk capability.

The circulation system links production and consumption. It is not only the basis on which the new development pattern is built but also an important guarantee for achieving domestic circulation. During the 14th Five-Year Plan period, improving the modern circulation system is essential for ensuring unimpeded domestic circulation and supporting high-quality economic development. This paper expounds on the new changes of and requirements on the circulation system under new circumstances, summarizes the current situation of the circulation system, analyzes the problems and challenges that the circulation system is faced with according to new requirements, and makes recommendations and puts forward main measures in a targeted way, so as to provide references for promoting coordinated development of the modern circulation system.