Volume 12, Issue 3

Fostering a new development dynamic is in nature about reshaping the relations between domestic and international economic cycles to achieve self-reliance and self-strengthening at higher levels. Economic cycle is the integration of various links such as production, distribution, exchange and consumption. This paper attempts to study the influence on economic cycle from income distribution based on the principles of political economy and therefore link common prosperity with the new development dynamic. It finds that labor income share is central to income distribution. On the supply side, income distribution affects choice of technology and production efficiency through changing wages; on the demand side, it influences size of demand and level of capacity utilization both directly and indirectly. Specifically, changing wages lead to changing size of reproduction and consumption by laborers in the direct way and cause changing profit margins and thus affect accumulation in the indirect way. The two channels produce effects simultaneously, yet in opposite directions, which justifies the categorization of economies into “profit-oriented” and “wage-oriented” ones according to the different influence of changing wages on the level of capacity utilization. In this theoretical logic, the paper comprehensively analyzes China’s income distribution, wages, all labor productivity, organic composition of capital, profit margins, accumulation rates, level of capacity utilization and relations between domestic and international economic cycles, and finds that Chinese economy has turned from “profit-oriented” to “wage-oriented” since the turning point of 2010. It signals both necessity and feasibility of promoting common prosperity and fostering a new development dynamic. This paper also proposes some policy suggestions on promoting common prosperity from the perspectives of ownership, distribution, government-market relations and spatial structure.

Deglobalization and elevated inflation are important features of the current world economy. Will the reversing of globalization affect the level and formation mechanism of inflation in the countries (or regions)? This paper selects 163 sample economies and constructs an index system in measurement of globalization. On such basis, it integrates the index system into the hybrid Phillips curve under the condition of open economy to study the influence of globalization on inflation and the logical mechanism and to further evaluate the driving effect of deglobalization on global inflation. The result shows a deflation effect of globalization, and the effect decreases first and then grow as the globalization level of a country (or region) improves. To further investigate the formation mechanism of inflation, the paper decomposes inflation into inflation trend and inflation cycle. As far as inflation trend is concerned, trade globalization marked by participation in global value chain is the main driver of downward inflation trend in developed economies, while globalization of information and finance is the primary driver of downward trend in emerging and developing economies. As to inflation cycle, trade globalization makes inflation cycle of the countries (or regions) more sensitive to price of international commodities and forms a linkage through trade network. Since the outbreak of the major public health emergency in 2020, the reversing of globalization drove up inflation of the countries (or regions), and those with higher participation in global value chain have higher level of inflation.

The promotion of fuller and higher-quality employment is a prime task for China’s high-quality development. Both employment security (ES) and employment quality (EQ) need to be improved for women who, as an essential part of labor force, have long been faced with high stress and employment threshold. The role of digital transformation in promoting women’s employment through reducing the cost of job information search is analyzed with the Job Search Theory in this paper. By using China Household Finance Survey (CHFS) data, this research found that digital transformation of households in China contributes to women’s employment significantly, raises the number and proportion of female family members in employment, and enhances women’ access to medical care insurance, endowment insurance, unemployment insurance, housing fund and overtime pay. Digital transformation can improve the information accessibility of households, and the reduction in information asymmetries benefits women’s employment, as indicated by the mechanism analysis. The positive impact of digital transformation is more pronounced for households in Central China, Western China and provinces with high unemployment rates, as well as those supporting the elderly and without housing. This paper will serve as a reference to fuel high-quality employment and reduce difficulties for women in the context of digital transformation.

Land is a production factor that supports industrial development and also an important resource for increasing local government revenue. The scientific allocation of land has a positive effect on applying a new development philosophy. Based on the data of China’s micro land transaction, this paper constructs the industrial dispersion indicator of land transfer to discuss about how short-term fiscal pressure affects allocation of land resources among industries and then analyzes its impacts on agglomeration effects. The results show that the greater the short-term fiscal pressure, the higher the dispersion of land transfer among industries, which holds true after going through a series of robustness tests. Further analyses show that the dispersion of land transfer among industries deteriorates the policy orientation of giving priority to key industries. Finally, the practice of dispersion of land transfer among industries weakens agglomeration economies. The research results of this paper show that local governments’ strategy of land transfer among induestries for coping with short-term fiscal pressure has the characteristics of “increasing fiscal revenues and weakening the role of industrial guidance.” This means that in the new stage of development, local governments urgently need to enhance their understanding of the multiple functions of land and avoid impairing industrial development for addressing the short-term fiscal pressure.

Accelerating the building of a new development pattern with domestic market as the mainstay and domestic and international markets reinforcing each other is a major decision made by the CPC Central Committee with Comrade Xi Jinping at the core in light of changes in the development stage, environment and conditions in China. Trade gains are an important indicator of the development trend of domestic and international circulations for a country. With the quantitative model of trade gains containing the multi-sectoral input-output relations, this paper estimates the trade gains from the economic dual circulation in China between 1987 and 2017, based on the kernel density estimation and Markov chain, and the main findings are as follows. (1) The trade gains from the domestic circulation in China showed a downward trend, while the trade gains from the international circulation presented a trend of first rising and then declining. But the former still outweighed the latter. (2) Compared with the international circulation, the continuity, spatial correlation effect and rising potential of the trade gains from China’s domestic circulation were greater. (3) There was no positive spatial correlation effect between the trade gains from the domestic and those from the international circulation. China should make overall plans for opening up both externally and internally, and unblock sticking points between the two circulations, so as to realize the positive interaction of the trade gains from the dual circulation, and accelerate the formation of a new development pattern with domestic market as the mainstay and domestic and international markets reinforcing each other.

Digital trade rules and higher positions of enterprises in the global value chain (GVC) are both important topics in the context of high-quality economic development. This paper refers to the data of RTA digital trade rules concluded by China in the TAPED database in 2000–2014 and the matched data in the WIOD database, the China Customs Import and Export Database and the China Industrial Enterprise Database to investigate the effects of digital trade rules on Chinese enterprises as to their ascending GVC positions. It finds that signing the RTA digital trade rules can steadily and significantly promote the position ascendance; compared with the digitalization rules on trading objects, signing the digitalization rules on trade modes produces greater effects of driving up the positions, which are realized mainly via the three channels of advancing cross-border flow of R&D factors, promoting corporate digital transformation, and improving professional management. Digital trade rules that are horizontally broader and vertically deeper are in greater favor of Chinese enterprises for ascending in the global value chain, which is especially evident among those in digital industry and processing trade. During the negotiations of digital trade rules, it’s imperative to pay close attention to the rules on e-commerce cooperation, awareness of e-commerce importance, intellectual property protection, attempts in big data-related trade in goods, and cross-border data flow, so as to secure the core interests of Chinese enterprises in gaining higher positions. This paper offers great policy implications as to how to sign digital trade rules by China in the future and how to select partners in greater support for Chinese enterprises to ascend to the middle and high end of the global value chain.