OECD Economic Surveys V o lu m CHIna e 2 OECD Economic Surveys 0 1 SPECIaL FEaTURES: MOnETaRy anD FInanCIaL POLICy, PRODUCT MaRkET 0 / 6 REgULaTIOn, InEqUaLITIES anD SOCIaL POLICIES CHIna Most recent editions non-member Countries: Most recent editions Australia, October 2008 Baltic States, February 2000 Austria, July 2009 Brazil, July 2009 Belgium, July 2009 Bulgaria, April 1999 Canada, June 2008 Chile, January 2010 Czech Republic, April 2008 China, February 2010 Denmark, November 2009 Estonia, April 2009 Euro area, January 2009 India, October 2007 European Union, September 2009 Indonesia, July 2008 Finland, June 2008 Israel, January 2010 France, April 2009 Romania, October 2002 Germany, April 2008 Russian Federation, July 2009 Greece, July 2009 Slovenia, July 2009 Hungary, January 2010 South Africa, July 2008 Iceland, September 2009 Ukraine, September 2007 Ireland, November 2009 Federal Republic of Yugoslavia, January 2003 Italy, June 2009 Japan, September 2009 Korea, December 2008 Luxembourg, June 2008 Mexico, July 2009 Netherlands, January 2008 O New Zealand, April 2009 E Norway, August 2008 C D Poland, June 2008 E Portugal, June 2008 c o Slovak Republic, February 2009 n o Spain, November 2008 m Sweden, December 2008 ic S Switzerland, December 2009 u r Turkey, July 2008 v e United Kingdom, June 2009 ys United States, December 2008 C H In a Subscribers to this printed periodical are entitled to free online access. If you do not yet have online access via your institution’s network, contact your librarian or, if you subscribe personally, send an e-mail to [email protected]. Volume 2010/6 ISSn 0376-6438 February 2010 2010 SUbSCRIPTIOn F e (18 ISSUES) b r u a ISbn 978-92-64-07667-9 -:HSTCQE=U\[[\^: ry Volume 2010/6 10 2010 06 1 P 2 www.oecd.org/publishing 0 February 2010 1 0 OECD Economic Surveys: China 2010 ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT The OECD is a unique forum where the governments of 30 democracies work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies. The OECD member countries are: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The Commission of the European Communities takes part in the work of the OECD. OECD Publishing disseminates widely the results of the Organisation’s statistics gathering and research on economic, social and environmental issues, as well as the conventions, guidelines and standards agreed by its members. ISBN 978-92-64-07667-9 (print) ISBN 978-92-64-07668-6 (PDF) DOI 10.1787/eco_surveys-chn-2010-en Series: OECD Economic Surveys ISSN 0376-6438 (print) ISSN 1609-7513 (online) Also available in French. Photo credits: Cover © Comstock/Comstock Images/Getty Images. Corrigenda to OECD publications may be found on line at: www.oecd.org/publishing/corrigenda. © OECD 2010 You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgment of OECD as source and copyright owner is given. All requests for public or commercial use and translation rights should be submitted to [email protected]. Requests for permission to photocopy portions of this material for public or commercial use shall be addressed directly to the Copyright Clearance Center (CCC) at [email protected] or the Centre français d’exploitation du droit de copie (CFC) at [email protected]. TABLE OF CONTENTS TTaabbllee ooff ccoonntteennttss Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Assessment and recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Chapter 1. Achievements, prospects andfurtherchallenges. . . . . . . . . . . . . . . . . . . . . . . 19 Keeping up robust growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Weathering the global crisis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 The social policy challenge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Chapter 2. Further monetary policy frameworkreform . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Monetary policy has come a long way . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 The modus operandi of the PBoC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 The influence of the PBoC on the interbank market . . . . . . . . . . . . . . . . . . . . . . . . . . 50 How responsive is bank lending to money-market conditions?. . . . . . . . . . . . . . . . . 53 The way forward for interest rate reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 How sensitive is the real economy to interest rate changes?. . . . . . . . . . . . . . . . . . . 56 Do changes in aggregate demand influence inflation in China? . . . . . . . . . . . . . . . . 59 China’s exchange rate regime . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 The benefits of moving towards a flexible inflation target . . . . . . . . . . . . . . . . . . . . . 65 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Chapter 3. Progress on financial reforms: anupdate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Financial reforms have accelerated and broadened since2005 . . . . . . . . . . . . . . . . . 72 Banking reforms are coming to fruition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 Capital market development is accelerating on a firmer foundation . . . . . . . . . . . . 81 Greater priority is being given to improving credit access for underserved segments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 The financial system is gradually opening up internationally. . . . . . . . . . . . . . . . . . 93 Conclusions and recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 Chapter 4. Product market regulation andcompetition . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 Product market regulation has been transformed but could be improved further . . 102 The OECD’s PMR indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 Product market regulation is still restrictive in China. . . . . . . . . . . . . . . . . . . . . . . . . 104 But competition is increasingly robust in most markets. . . . . . . . . . . . . . . . . . . . . . . 105 SOE governance has been comprehensively reformed . . . . . . . . . . . . . . . . . . . . . . . . 109 OECD ECONOMIC SURVEYS: CHINA © OECD 2010 3 TABLE OF CONTENTS SOE performance has improved but still lags the private sector . . . . . . . . . . . . . . . . 110 Detailed PMR indicator results and policy recommendations . . . . . . . . . . . . . . . . . . 113 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 Chapter 5. A pause in the growth of inequality? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129 Regional development policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 Policies in favour of rural areas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134 Government policies to reduce household income inequality. . . . . . . . . . . . . . . . . . 135 Measuring household inequality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 Measuring spatial inequality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 Chapter 6. A labour market in transition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 Labour market developments: job creation, migration and persistent segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 New labour laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169 Conclusions and recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178 Chapter 7. Providing greater old-age security. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181 The demographic and social context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182 The rural old-age support system. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 The urban old-age support system. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 Overall conclusion: further reform directions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 Chapter 8. Improving the health care system. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 Health performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210 The health system. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215 Financing of health care. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220 Government initiatives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222 Assessment and conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230 Boxes 1.1. Second Economic Census: China’s economic size revised up . . . . . . . . . . . . . . . 20 1.2. Improving energy efficiency and reducing pollution. . . . . . . . . . . . . . . . . . . . . . . 22 1.3. Enhancing innovation capacity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 1.4. How dependent on exports is China? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 3.1. China’s rules for calculation of capital adequacy and loan classification. . . . . . . . 73 3.2. Designing efficient deposit insurance schemes. . . . . . . . . . . . . . . . . . . . . . . . . . . 79 3.3. Reform of the non-traded shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 3.4. China’s informal financial facilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 3.5. International experience with credit guarantees for SMEs. . . . . . . . . . . . . . . . . . 91 4 OECD ECONOMIC SURVEYS: CHINA © OECD 2010 TABLE OF CONTENTS 3.6. Sketch of China’s capital control regime. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 5.1. Estimating continuous income distributions for China . . . . . . . . . . . . . . . . . . . . 138 5.2. Inequality indices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140 5.3. Inequalities in Guangdong province . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 6.1. Measuring unemployment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155 6.2. Measuring employment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 6.3. The hukou system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 6.4. Income tax and social insurance contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . 175 7.1. Property rights in rural areas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 8.1. The smoking epidemic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213 Tables 1.1. Level and improvement of living standards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 1.2. Factors contributing to output growth: 1988-2008. . . . . . . . . . . . . . . . . . . . . . . . . 25 1.3. R&D Intensity of Chinese companies by level of technology. . . . . . . . . . . . . . . . 26 1.4. Macroeconomic developments and prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 1.5. Saving, investment and the current account balance. . . . . . . . . . . . . . . . . . . . . . 31 1.6. Sectoral saving balances in China and the OECD area . . . . . . . . . . . . . . . . . . . . . 31 1.7. Spending plans and tax cuts announced between October2008 andApril2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 1.8. General government appropriation account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 1.9. Household appropriation account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 2.1. PBoC targets and outcomes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 3.1. Non-performing loans of commercial banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 3.2. Progress in meeting minimum capital adequacy. . . . . . . . . . . . . . . . . . . . . . . . . . 74 3.3. Pre-tax profits of commercial banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 3.4. Deposit insurance in selected countries: main features. . . . . . . . . . . . . . . . . . . . 80 3.5. Stock market profile. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 3.6. Outstanding bonds by type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 4.1. Market concentration in the industrial sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 4.2. Industry concentration and state ownership in the industrial sector . . . . . . . . 108 4.3. Various estimates of TFP growth over the reform period. . . . . . . . . . . . . . . . . . . 108 4.4. Comparison of SOEs and private firms in industry . . . . . . . . . . . . . . . . . . . . . . . . 110 4.5. State control in China, international comparison . . . . . . . . . . . . . . . . . . . . . . . . . 113 4.6. Policy goals on state ownership across sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 4.7. Industries with the highest degree of state ownership. . . . . . . . . . . . . . . . . . . . . 114 4.8. Barriers to entrepreneurship in China, international comparison . . . . . . . . . . . 119 4.9. Barriers to international trade and investment, international comparison. . . . . 123 4.10. Tariff rates and their dispersion in China and selected countries . . . . . . . . . . . 125 5.1. Aspects of the minimum living allowance system . . . . . . . . . . . . . . . . . . . . . . . . 136 5.2. Extent of poverty reduction through the minimum living allowanceprogramme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 5.3. Average earnings across Guangdong prefectures . . . . . . . . . . . . . . . . . . . . . . . . . 144 5.4. Urban-rural income differences by income source . . . . . . . . . . . . . . . . . . . . . . . . 146 6.1. Employment and unemployment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155 6.2. Estimates of urban employment by sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 6.3. Rural employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 6.4. Origin and destination of unofficial migrants: populationandemployment . . 165 OECD ECONOMIC SURVEYS: CHINA © OECD 2010 5 TABLE OF CONTENTS 6.5. Sector and occupational status of urban workers . . . . . . . . . . . . . . . . . . . . . . . . . 166 6.6. Employment status and earnings of urban workers . . . . . . . . . . . . . . . . . . . . . . . 167 6.7. Employees without contracts by type of enterprise . . . . . . . . . . . . . . . . . . . . . . . 170 6.8. Coverage of minimum wage rate in five major cities . . . . . . . . . . . . . . . . . . . . . . 174 7.1. Projections of elderly population and dependency ratios. . . . . . . . . . . . . . . . . . . 184 7.2. Labour force participation rates by age. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186 7.3. Odds ratios for feeling rich or poor in2005. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 7.4. A comparison of rural social pensions across emerging countries. . . . . . . . . . . 193 7.5. Economic structures when rural social insurance was introduced. . . . . . . . . . . 193 7.6. Income and assets of Social Security funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198 7.7. Social coverage for migrant workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199 7.8. Replacement rate under various assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 201 8.1. Staff size and education level of community health centres and stations . . . . 216 8.2. Number of doctors by level of training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 8.3. Training required to become a doctor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218 8.4. Reimbursement rules and benefits in different rural medical insurancesystems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224 8.5. The new urban health insurance system: coverage by city . . . . . . . . . . . . . . . . . 226 Figures 1.1. CO emissions and energy intensity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 2 1.2. Shares in world manufacturing output. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 1.3. Physical assets and employment in industry by ownership . . . . . . . . . . . . . . . . 27 1.4. Impact of changing sectoral employment shares onproductivitygrowth . . . . 29 1.5. Level of education by year of entry to primary school . . . . . . . . . . . . . . . . . . . . . 30 1.6. Evolution of exports and imports during the downturn. . . . . . . . . . . . . . . . . . . . 32 1.7. Government spending and deficit on a budgetary basis. . . . . . . . . . . . . . . . . . . . 36 1.8. Quarterly outlay path for infrastructure spending . . . . . . . . . . . . . . . . . . . . . . . . 36 1.9. Financial assets and liabilities of the government. . . . . . . . . . . . . . . . . . . . . . . . . 37 1.10. Proportion of urban households owning cars by income decile . . . . . . . . . . . . . 39 2.1. Bond market issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 2.2. Short-term money-market interest rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 2.3. Required and excess reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 2.4. Commercial lending rates and the repo rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 2.5. Equity and debt to total liability ratios in listed Chinese firms . . . . . . . . . . . . . . 57 2.6. Impact of a one percentage point increase in real policy rates oninvestment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 2.7. Changes in inflation and the output gap. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 2.8. Bilateral and effective exchange rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 2.9. The balance of payments and foreign exchange reserves . . . . . . . . . . . . . . . . . . 61 2.10. PBoC sterilisation and base money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 2.11. Inflation and business cycle volatility across countries . . . . . . . . . . . . . . . . . . . . 64 3.1. Loan-loss provisions of major commercial banks . . . . . . . . . . . . . . . . . . . . . . . . . 74 3.2. Consumer loans outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 3.3. Bank market shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 4.1. The structure of the PMR indicator system. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 4.2. The overall indicator of product market regulation (2008). . . . . . . . . . . . . . . . . . 104 4.3. Product market regulation in China, an international comparison (2008). . . . . 104 6 OECD ECONOMIC SURVEYS: CHINA © OECD 2010 TABLE OF CONTENTS 4.4. The relative size of the state-enterprise sector . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 4.5. Differences in total factor productivity by firm ownership . . . . . . . . . . . . . . . . . 111 4.6. Distribution of rates of return on physical assets . . . . . . . . . . . . . . . . . . . . . . . . . 112 4.7. Capital intensity and state ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 4.8. SOE penetration and market concentration, 1998-2007 . . . . . . . . . . . . . . . . . . . . 121 4.9. FDI inflows to China by sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 5.1. International comparison of inequality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 5.2. Investment share in the West. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 5.3. GDP per capita across China’s main regions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 5.4. Junior secondary school graduation rates by region . . . . . . . . . . . . . . . . . . . . . . . 134 5.5. National household income distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 5.6. National rural and urban Gini coefficients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 5.7. National rural and urban Atkinson inequality indicator. . . . . . . . . . . . . . . . . . . . 140 5.8. Gini coefficients of different measures of inter-provincial inequality . . . . . . . . 141 5.9. Extent of inter-province migrant flows by province . . . . . . . . . . . . . . . . . . . . . . . 142 5.10. Sources of the rural-urban income differential . . . . . . . . . . . . . . . . . . . . . . . . . . . 146 5.11. Inequality of health outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 6.1. Distribution of the population between work, studiesandunemployment . . . 159 6.2. Urban employment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 6.3. Composition of non-agricultural employment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 6.4. Absolute growth in employment by region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 6.5. Growth of average earnings by region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162 6.6. Sources of growth of the urban population. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 6.7. Strictness of employment protection laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171 6.8. Minimum wages in cities relative to local average wages . . . . . . . . . . . . . . . . . . 174 6.9. The estimated tax wedge in2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176 7.1. Sources of income for the elderly by age. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 7.2. Relative poverty amongst the elderly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 7.3. Coverage of the pension system in towns and cities. . . . . . . . . . . . . . . . . . . . . . . 198 7.4. Simulation of pension deficits under different assumptions. . . . . . . . . . . . . . . . 202 7.5. Pension replacement rates in the government and enterprise sector . . . . . . . . 203 8.1. Cases of infectious diseases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211 8.2. Years of life lost due to non-communicable diseases. . . . . . . . . . . . . . . . . . . . . . 211 8.3. Expected healthy years of life at birth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212 8.4. Cigarette consumption per capita and affordability . . . . . . . . . . . . . . . . . . . . . . . 213 8.5. Provision of care by level of institution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216 8.6. Health care spending by consumers relative to total health care andtotalconsumer spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220 8.7. Health care insurance: the extent of coverage. . . . . . . . . . . . . . . . . . . . . . . . . . . . 222 OECD ECONOMIC SURVEYS: CHINA © OECD 2010 7 This Survey was prepared in the Economics Department, with Richard Herd as the main author under the supervision of Vincent Koen. The other contributors were PaulConway, SamHill, Yu-WeiHu, CharlesPigott and AndersReutersward. Consultancy support was provided by YufeiPu. Analysis of Chinese microeconomic data was undertaken by PingHe and Jianxun Yu of the Chinese National Bureau of Statistics. Technical assistance was provided by ThomasChalaux, and secretarial assistance by NadineDufour and LillieKee. The Survey was discussed at a special seminar of the Economic and Development Review Committee on 16November2009, with participation of representatives of the Chinese government. The Survey is published on the responsibility of the Secretary-General of theOECD. This book has... StatLinks2 A service that delivers Excel® files from the printed page! Look for the StatLinks at the bottom right-hand corner of the tables or graphs in this book. To download the matching Excel® spreadsheet, just type the link into your Internet browser, starting with the http://dx.doi.org prefix. If you’re reading the PDF e-book edition, and your PC is connected to the Internet, simply click on the link. You’ll find StatLinks appearing in more OECD books.