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| Name | The 28th CESA Annual Conference Keynote Speech 2-Wing Thye Woo-UC Davis |
| Video Uploader | Video From Sizhong Sun |
| Upload Date | This Video Uploaded At 22-07-2016 21:43:34 |
| Video Discription | This is the keynote speech 2 by Prof Wing Thye Woo from UC Davis at the 28th Annual Conference of Chinese Economics Society (CESA), James Cook University, Cairns, 17-19 July 2016. The Necessary Demand-Side Supplement to China’s Supply-Side Structural Reform:Termination of the Soft Budget Constraint Wing Thye Woo Economics Department, University of California, Davis Institute of Population and Labor Economics, Chinese Academy of Social Sciences, Beijing School of Economics, Fudan University, Shanghai Jeffrey Cheah Institute on Southeast Asia, Sunway University, Kuala Lumpur Abstract President Xi Jinping pronounced in April 2014 that China has entered a New Normal in economic growth, and the common perception was that it meant a new trend growth rate of about 7.0 percent, down from the above-9.5 percent average growth rate in the 1978-2011 period. After growth came in at 6.9 percent in 2015, and the World Bank’s projections in January 2016 that China’s growth rate would drop to 6.7 percent in 2016 and then to 6.5 percent in 2016, President Xi Jinping announced in May 2016 that comprehensive supply-sidestructural reforms would be enacted. In this paper we (1) identify some of the major structuralreforms that would entrench dynamism into China’s economy, and (2) emphasize that China needs to expunge the soft-budget constraint on the demand-side if supply-side structural reforms are to generate the desired outcomes. The existence of the soft-budget constraint guarantees the existence excess capacity and zombie firms. A crude but previously effective instrument to curb the over-investment proclivity of local governments and SCEs is to hold the top management of the state-controlled banks (SCBs) accountable for the appearance of NPLs. A much more effective curbing of the soft-budget constraint behavior will require that the career-maximizing practices of the managers of state-controlled enterprises (SCEs) and SCBs become identical to the long-run profit-maximizing practices that owners of private firms in a modern market economy would adopt. Structural-side structural reforms (like more privatization of SCEs and SCBs, and the establishment of social safety nets and job retraining programs) will correct the incentives faced by China’s managers and government officials. [wkvXG-y6Wig] |
| Category | Education |
| Tags | CESA | James Cook University | UC Davis | Wing Thye Woo | China | Supply-Side Structural Reform | Demand-Side Reform |
