Books & Films  |  Grading & Graduate Students  |  Lectures & Readings 
Short Syllabus for Printing

ECON 461/661 Chinese Economy (3+0) 3 credits
Historical examination of China's economic development, with a special emphasis on its varying development strategies, and its future prospects.
Prerequisites: ECON 101, 102.
- UNR General Catalog

INTRODUCTION

This course will cover the Chinese economy, both historical and current. It will focus on the historical development of its economic institutions, on its varying economic policies and strategies, and in particular how economic reform affected different sectors of the Chinese economy. 

This class has been approved as a general capstone in the university core curriculum.  According to the university, capstone courses build upon the core curriculum and courses in the student's major. The courses deal with ethical and substantive issues, problems and themes that affect the world community; they offer an analysis of different cultures and traditions, or issues relating to science and society.  Students must complete all other core curriculum requirements, including the western traditions sequence, prior to enrolling in capstone courses.

BOOKS (all paperback)

1.  Fairbank, John King, & Merle Goldman (2006), China: A New History.  Enlarged edition, Belknap Press, ISBN 0-674-01828-1.  The late J.K. Fairbank was one of our country's most respected China historians, and he died the day he completed the book.  Merle Goldman helped to update it.  Required. 2.  Lardy, Nicholas R. (1998), China's Unfinished Economic Revolution.  ISBN 0-8157-5134-6.  Required.  3.  Lardy, Nicholas R. (2002), Integrating China into the Global Economy.  ISBN 0-8157-5136-2.  Required.  Nick Lardy is a senior fellow at the Peterson Institute for International Economics in Washington, DC. Before then he was at the Brookings Institution (where he was also a senior fellow and Interim Director of Foreign Policy Studies), and before that he was the Director of the Jackson School of International Studies at the University of Washington.  More importantly, he was one of my Ph.D. thesis advisors, and he is one of the country's top experts on the Chinese economy. For graduate students, I also expect you to read:  4.  Chow, Gregory C. (2001), China's Economic Transformation. ISBN 0-631-23330-X. Other readings may be assigned in class, and will be on reserve in the library.  The China Economic Review is available in the library (see if this link works), and online.  Another good journal is the China Quarterly, though its focus is more on the historical, cultural and philosophical aspects of China.

MOVIES  

There will be a number of films shown in class and after class, as follows:

You are expected to attend these movies.  If for some good reason you cannot make one of the movies, you may check the VHS film out afterwards for later viewing.

DATA SOURCES:

• China National Bureau of Statistics
• People's Bank of China

GRADES  

There will be an initial pass/fail quiz over some of the material in the introduction, one midterm exam at the end of the first week (25%), a research paper on an assigned topic (15%), a class presentation (10%), and a final exam (30%).  Attendance in class and at the films will account for another 10% of the grade.  Finally, you are expected to keep up with the readings and participate in discussion, and this participation will count for the remaining 10%.  Exams will generally be in-class, closed-book essay questions.  

GRADUATE STUDENTS

To receive graduate credit for this course as ECON 661, significant additional work is required.  The midterm exam is 30% of the grade, and it includes a take-home component in addition to the exam given to the undergraduates.  There is also a research paper (30%), due June 12 at the latest.   General instructions for a paper are given at http://www.business.unr.edu/faculty/parker/econ458/econ658f04requirements.pdf, though these instructions were for a different class.  Given the time constraint, I expect part 1 (a proposal) and part 4 (the final paper), but not parts 2(outline) or 3( first draft).  The final exam is 30%, and again will have a take-home component.  Participation will be graded for the final 10% of your grade.

I.  Introduction (1 day)

In this section, we first discuss the growing importance of China in the world economy, and why China's economy is so important (and interesting) for economists to study.  We will then cover some basic necessities of studying about China, including basic statistics, geography, and language (i.e., how to romanize it, how to pronounce it, how names work, and what some common place names mean).

An easy summary of China's economic history can be found in a lecture I gave in 2001 in Professor Ghymn's international marketing class.

Pass/Fail Quiz on Basic Geography, History, and Pronunciation (Wednesday for first try, after class for later tries)

II.  Economic History of China "Before Liberation" (2 days)

   A. The Imperial Dynasties

In this section, we will review the economic and political history of China, in order for you to appreciate the depth and continuity of Chinese history, and to answer a number of fundamental questions. What economic and historical patterns appear to repeat themselves? How and why did China's economy change over time? Why did China, once one of the world's most advanced economies, become the "sick man of Asia" by the end of the 19th Century, and why did this once cosmopolitan society become so inward-looking? I plan to show a film entitled Legacy.   You should read Fairbank & Goldman, chapters 1-12, though you can skim over the parts on religion, art, and literature.

How was China affected by its interaction with the outside world, particularly after the arrival of the Western Barbarians? Why didn't China's first revolution succeed, and how was China ripe for another revolution, this time one led by the Chinese Communist Party? I plan to show the films Pacific Century, vol. 1, and China in Revolution. You should read Fairbank & Goldman, chapters 13-17.  I would also recommend reading Eastman (1988), Elvin (1973), and Rawski (1989).

Imperial China Lecture Notes (pdf)

In this section, we will cover the development of socialism in China.  See the film China under Mao.  You should read Fairbank & Goldman, chapters 18-20, and chapter 1 of the book by Naughton (on reserve).   I would also recommend Lardy (1978 and 1983), Lieberthal (1995), Rawski (1980), and Riskin (1991).

We begin first with a discussion of the philosophies of Marx and Lenin, and the development of the Stalinist model in the USSR. We then discuss some key elements of "Mao Zedong Thought," as it pertained to Chinese economic development.

We then move on to how the Socialist economy was actually implemented in China. In particular, we will discuss initial industrialization strategies and performance, and how the Chinese peasant's life was affected by changes in China's agricultural policies.

We will first discuss the campaigns that set the stage for the Great Leap Forward.  We will then discuss the economics and politics behind the Great Leap Forward and the Cultural Revolution, and how this turmoil affected China's economic development.

IV. The Dengist Era of Economic Reform (2 days)

This section will cover how far China has come since Mao.  See the films All under Heaven and Born under the Red Flag.  You should read Fairbank & Goldman, chapter 21, chapters 2-7 of Naughton (on reserve),and some of the following papers:

1. Jefferson, G.H., & W. Xu (1991), "The Impact of Reform on Socialist Enterprises in Transition:  Structure, Conduct, and Performance in Chinese Industry," Journal of Comparative Economics 15(1): 45-64.
2. MacMillan, J., & B. Naughton (1992), "How to Reform a Planned Economy:  Lessons From China," Oxford Review of Economic Policy 8(1): 130-143.
3. Naughton, B. (1992), "Implications of the State Monopoly Over Industry and its Relaxation," Modern China 18(1): 14-41.
4. Naughton, B. (1994), "What is Distinctive about China's Economic Transition?  State Enterprise Reform and Overall System Transformation," Journal of Comparative Economics 18(3), 470-90, June.
5. Parker, E. (1995), "Prospects for the state-owned enterprise in China's Socialist Market Economy," Asian Perspective 19(1): 7-35. [Download text].
6. Woo, W.T. (1994), "The Art of Reforming Centrally Planned Economies:  Comparing China, Poland, and Russia," Journal of Comparative Economics 18(3), 276-308, June.

We will discuss the problems of China's Socialist Economy after Mao, the first steps toward reform by Mao and his successor, Hua Guofeng, and finally the rise (and fall, and rise, and fall, and rise) of Deng Xiaoping as China's paramount leader.

In this section, we will start first with the new political climate under Deng, and how economic reform attacked the stagnant agricultural economy. We will then cover China's new "Open Door" policies, and how they affected the economy. Next, we will discuss the second wave of industrial reform, and how it ultimately transformed the Chinese economy in ways completely unexpected by the leadership. We will then review the economic lessons of China's reform, the contradictions of economic reform, and the events leading to "Liu Si" in Tian'anmen square fifteen years ago.

V. The Socialist Market Economy (2 days)

This section will focus on China's drive to a market economy in the 1990s.  You need to read chapter 8 of Naughton (on reserve), along with Lardy 1998.   See the film China in the Red.

We will discuss the problems that emerged under the retrenchment period, and the counter-examples of Hong Kong, Singapore, and Taiwan. We will discuss the major philosophical changes and reforms that began and ultimately characterized the Shehuizhuyi Shichang Jingji.

We first discuss the problems of China's state-owned enterprises, and the role of the state-owned commercial banks.  We will then discuss the Asian Financial Crisis, and how this both affected China and yielded particularly important lessons for China's future economic development. See also:

• Cargill, T.F., & E. Parker (2001), "Financial liberalization in China: Limitations and lessons of the Japanese regime," Journal of the Asia-Pacific Economy 6(1): 1-21. [Download]

You should read Lardy 2002.  See also the eleven roundtable papers on Current Issues in the Chinese Economy, published in the China Economic Review 13:4 (2002).

We will the emergence of China as a trading country, the issues surrounding China's accession to the World Trade Organization, the U.S.-China relationship, the potential effects of the WTO on China, and the current debate over China's exchange rate system.

We will discuss the expectations that China's economy will slow, the problem of price deflation, rising unemployment, China's exchange rate regime, and other current issues.  You might read:

• Cargill, T.F., & E. Parker (2004), "Price deflation, money demand, and monetary policy discontinuity: A comparative view of Japan, China, and the United States," North American Journal of Economics and Finance 15(1): 125-147.  [Download]
  

• Cargill, T.F., & E. Parker (2003), "Why deflation is different," Central Banking 14(1): 35-42. [Download text]   

• Cargill, T.F., F. Guerrero, & E. Parker (2006), "Policy traps and the linkage between China's financial and foreign exchange systems," in China as a World Workshop, edited by K.H. Zhang: ch. 11, pp. 188-221 (Routledge, Taylor & Francis). [Download text] 

• My 15 minute talk on China's Current Economic Problems for the UNR China Forum, September 2002 (pdf)

Cheating:

Any cheating will be severely punished.  Cheating includes both copying someone else's work as well as letting your work be copied, bringing in notes, text messaging or taking pictures of the exam, plagiarizing other people's words or ideas and passing them off as your own, et cetera.  At a minimum, you will receive a failing grade for the assignment or other portion of the course, with no chance to redo it, and the incident will be reported to Student Judicial Affairs.  If the dishonesty is egregious you will fail the course, and if it is a repeat offense then you can be suspended or expelled from the university.  Students who are caught cheating also lose their chance at college scholarships.  I am serious as a heart attack about this, and the university faculty are also becoming more and more serious about this.

These maximum recommendations work both ways.  For example, a student working 10 hours per week should not take more than 15 credits and conversely, a student who is taking 15 credits should not work more than 10 hours per week.  Of course, many of you will choose to exceed these maxima, but you should know that unless you have superpowers or take extremely easy courses, you are setting yourself up for lower grades, inadequate sleep, or other trouble.  If you do not have scholarships or other means of support, then you might consider taking fewer credits per semester and an extra year or two to graduate.

But this course is a three-week intensive course, and if we follow the general rule that you should spend 2-3 hours outside of class for every hour in class, then you will need to spend 3 hours per day in class and 6-9 outside of class.  You should probably not plan on working or taking other classes if you want to get a good grade (or ever sleep).

Graduate students are expected to do all the work undergraduates are required to do, and more.  Graduate students must do additional problems on the exams, and also write a research paper.  Details must be worked out with the professor during the first three days of class. 

International agencies you might check out include the World Trade Organization Homepage, the United Nations, the Bank for International Settlements, the Organization for Economic Co-operation and Development, and the World Bank.  There is also a site with links to foreign embassies.

United States government agencies with good international data include US Customs, the U.S. Trade Representative, the Department of Commerce (see the Bureau of the Census, the International Trade Administration, and the Bureau of Labor Statistics), the International Trade Commission., and the Central Intelligence Agency Factbook (the homepage of the CIA itself is, as you might guess, a secure site.)  See also the FedWorld Federal Internet Resource Locator.

Good international information may be also found at the Financial Times website, the website for The Economist, the International Center for Economic Growth, et cetera.  

Search the UNR Library through Wolfpac for books or journals.  They also have a long list of business/economics databases for article citations, abstracts, and statistical information, including a good index of economic journals, especially Econlit from the Journal of Economic Literature, and a lot of other good reference information.  Many economics journals now have websites (the library has a different list of online business/economic journals), and you can find an article, read its abstract, and order it if you want the whole thing through interlibrary loan.

If you find any errors or know of any other good international websites, email me!