Front Matter

Front Matter

Markus Rodlauer, and Alfred Schipke
Published Date:
September 2016
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Modernizing China

Investing in Soft Infrastructure

Edited by

W. Raphael Lam

Markus Rodlauer

Alfred Schipke

Note to Readers

This is an excerpt from Modernizing China: Investing in Soft Infrastructure. Unlike investments in physical infrastructure, the benefits of policy frameworks and institutions are often less well understood and more difficult to implement. This volume provides valuable information about policies and institutions in China today and looks at key principles that can help China navigate the road ahead. The book covers tax policy and administration, social security, state-owned enterprise reform, mediumterm expenditure frameworks, the role of local government finances, capital account liberalization, and renminbi internationalization, all vital issues for China’s transformation. As China moves toward a more pricebased allocation of resources, strengthening monetary policy frameworks and financial sector regulation will be particularly important in channeling resources to the most productive sectors and minimizing the risks of financial sector stress.

This excerpt is taken from uncorrected page proofs. Please check quotations and attributions against the published volume.

The views expressed in this excerpt are those of the authors and should not be reported as or attributed to the International Monetary Fund, its Executive Board, or the governments of any of its member countries.

Modernizing China: Investing in Soft Infrastructure

Edited by W. Raphael Lam, Markus Rodlauer, and Alfred Schipke

ISBN: 978–1-51353–994-2

Pub. Date: Fall 2016

Format: Digital; Paperback, 6x9 in., 236 pp.

Price: US$37

For additional information on this book, please contact:

International Monetary Fund, IMF Publications

P.O. Box 92780, Washington, DC 20090, U.S.A.

Tel: (202) 623–7430 Fax: (202) 623–7201


© 2016 International Monetary Fund

Advance praise for Modernizing China

“China has redoubled its reform efforts and advanced on a number of fronts, including in the fiscal area. For example, significant progress has been made in completing the value-added tax reform and local government imbalances are being addressed. This book is a comprehensive guide on critical reform issues and provides good insights into China’s fiscal policy frameworks.”

–ZHU Guangyao

Vice Minister, Ministry of Finance

“China needs to complement its extraordinary build-up of hardware (infrastructure, factories, housing) with development of the ‘software’ of a market economy—legal system, financial sector, budget management, environmental protection, and social safety net. This book is essential reading to understand China’s challenges and policy frameworks that can help the country meet those challenges.”

–David Dollar

Senior Fellow, China Center, Brookings Institution

“The Chinese economy, at another historical juncture in its development, faces a struggle between new and old. But this time, simply boosting investment would be insufficient to restore robust growth. Instead, the successful transformation of the economy lies in completing institutional reforms that began nearly four decades ago. This timely book provides guidance on how to accomplish this and can help China to achieve the highest possible, sustainable growth rates.”

–Yiping Huang

Professor, National School of Development, Peking University


  • Introduction

  • 1 China’s Economic Success and Reforms: The Path Forward

    • W. Raphael Lam, Markus Rodlauer, and Alfred Schipke

  • Fiscal Policy Frameworks

  • 2 Modern and Environmental-Friendly Tax Policy Regime

    • Ruud de Mooij, W. Raphael Lam, and Philippe Wingender

  • 3 Tax Administration

    • John Brondolo and ZHANG Zhiyong

  • 4 A Medium-Term Expenditure Framework for More Effective Fiscal Policy

    • Holger van Eden, David Gentry, and Sanjeev Gupta

  • 5 Social Security Reform for Sustainability and Equity

    • Sanjeev Gupta and Mauricio Soto

  • 6 Local Government Finances and Fiscal Risks

    • W. Raphael Lam, WEI Jianing, and Holger van Eden

  • Monetary and Financial Policy Frameworks

  • 7 Interest Rate Transmission in a New Monetary Policy Framework

    • MA Jun

  • 8 Capital Account Opening and Capital Flow Management

    • Karl Habermeier, Annamaria Kokenyne Ivanics, Salim M. Darbar, Chikako Baba, and ZHU Jing

  • 9 Renminbi Internationalization

    • Malhar Nabar and Camilo E. Tovar

  • 10 A Rapidly Changing Financial System

    • Naomi Griffin and James P. Walsh

  • State-owned Enterprise Frameworks

  • 11 State-Owned Enterprise Reform

    • W. Raphael Lam and Alfred Schipke

  • Macroeconomic Statistics for Policymaking

  • 12 Upgrading Macroeconomic Statistics

    • ZHAO Xiu-Zhen and Robert Dippelsman

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