Title page
Contents
About China Pathfinder 4
Mission 4
Partners 4
Authors 4
Acknowledgments 4
Resources and Contact 4
Foreword 5
Executive Summary 6
Introduction: Do China's Economic Challenges Make Market Reform More Likely? 8
CHAPTER 1. China in 2021: External Pressures and Internal Shocks 10
1.1. MAIN INTERNAL AND EXTERNAL DEVELOPMENTS THAT SHAPED THE DATA 10
1.2. UPDATES TO RESEARCH DESIGN AND METHODOLOGY 11
CHAPTER 2. Historical Baseline and 2021 Stocktaking 13
2.1. FINANCIAL SYSTEM DEVELOPMENT 13
Definition and Relevance 13
2021 Stocktaking: How Does China Stack Up? 13
Efficient Pricing of Credit 13
Direct Financing 14
State Ownership in Top Ten Financial Institutions 14
Financial Institutions Depth 14
Financial Markets Access 14
Composite Score 14
A Year in Review: China's 2021 Financial System Policies and Developments 15
2.2. MARKET COMPETITION 22
Definition and Relevance 22
2021 Stocktaking: How Does China Stack Up? 22
Market Concentration 22
SOE Presence in the Top Ten Firms 23
Foreign Direct Investment Restrictiveness 23
Rule of Law 23
Composite Score 23
A Year in Review: China's 2021 Market Competition Policies and Developments 24
2.3. MODERN INNOVATION SYSTEM 30
Definition and Relevance 30
2021 Stocktaking: How Does China Stack Up? 30
National Spending on Research and Development 30
Venture Capital Attractiveness 30
Private versus State-Funded Innovation 31
Triadic Patent Families Filed 31
International Attractiveness of a Nation's Intellectual Property 31
Strength of IP Protection Regime 31
Composite Score 31
A Year in Review: China's 2021 Innovation Policies and Developments 31
2.4. TRADE OPENNESS 38
Definition and Relevance 38
2021 Stocktaking: How Does China Stack Up? 38
Goods and Services Trade Intensity 38
Trade Barriers: Tariff Rates 38
Restrictions on Services Trade 39
Restrictions on Digital Services Trade 39
Composite Score 39
A Year in Review: China's 2021 Trade Policies and Developments 40
2.5. DIRECT INVESTMENT OPENNESS 47
Definition and Relevance 47
2021 Stocktaking: How Does China Stack Up? 47
FDI Intensity 47
Direct Investment Restrictiveness 47
Composite Score 48
A Year in Review: China's 2021 Direct Investment Policies and Developments 48
2.6. PORTFOLIO INVESTMENT OPENNESS 54
Definition and Relevance 54
2021 Stocktaking: How Does China Stack Up? 54
Internationalization of Debt and Equity Markets 54
Portfolio Investment Restrictiveness 54
Composite Score 55
A Year in Review: China's 2021 Portfolio Investment Policies and Developments 55
CHAPTER 3. Conclusions and Implications 61
Glossary 64
Appendix: Overview of Methodology 65
TABLE 1. SUMMARY OF CHINA PATHFINDER CLUSTERS AND INDICATORS, 2022 12
FIGURE 1. 2021 ANNUAL ECONOMIC BENCHMARKS 7
FIGURE 2/FIGURE 3. COMPOSITE INDEX: FINANCIAL SYSTEM DEVELOPMENT, 2021 13
FIGURE 2.1/FIGURE 3.1. ANNUAL INDICATORS: FINANCIAL SYSTEM DEVELOPMENT (2021) 16
FIGURE 2.2/FIGURE 3.2. SELECTED SUPPLEMENTAL INDICATORS: FINANCIAL SYSTEM DEVELOPMENT (2021) 19
FIGURE 3/FIGURE 4. COMPOSITE INDEX: MARKET COMPETITION, 2021 22
FIGURE 3.1/FIGURE 4.1. ANNUAL INDICATORS: MARKET COMPETITION (2021) 25
FIGURE 3.2/FIGURE 4.2. KEY SUPPLEMENTAL INDICATORS: MARKET COMPETITION (2021) 27
FIGURE 4/FIGURE 5. COMPOSITE INDEX: MODERN INNOVATION SYSTEM, 2021 30
FIGURE 4.1/FIGURE 5.1. ANNUAL INDICATORS: MODERN INNOVATION SYSTEM (2021) 33
FIGURE 4.2/FIGURE 5.2. KEY SUPPLEMENTAL INDICATORS: MODERN INNOVATION SYSTEM (2021) 36
FIGURE 5/FIGURE 6. COMPOSITE INDEX: TRADE OPENNESS, 2021 38
FIGURE 5.1/FIGURE 6.1. ANNUAL INDICATORS: TRADE OPENNESS (2021) 41
FIGURE 5.2/FIGURE 6.2. KEY SUPPLEMENTAL INDICATORS: TRADE OPENNESS (2021) 44
FIGURE 6/FIGURE 7. COMPOSITE INDEX: DIRECT INVESTMENT OPENNESS, 2021 47
FIGURE 6.1/FIGURE 7.1. ANNUAL INDICATORS: DIRECT INVESTMENT OPENNESS (2021) 49
FIGURE 6.2/FIGURE 7.2. KEY SUPPLEMENTAL INDICATORS: DIRECT INVESTMENT OPENNESS (2021) 51
FIGURE 7/FIGURE 8. COMPOSITE INDEX: PORTFOLIO INVESTMENT OPENNESS, 2021 54
FIGURE 7.1/FIGURE 8.1. ANNUAL INDICATORS: PORTFOLIO INVESTMENT OPENNESS (2021) 56
FIGURE 7.2/FIGURE 8.2. KEY SUPPLEMENTAL INDICATORS: PORTFOLIO INVESTMENT OPENNESS (2021) 58