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China's Urban Unemployment: Exposed 'Disguised Unemployment' or Insufficient Aggregate Demand?

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  • Minqi Li

Abstract

China’s enterprise reform has resulted in large-scale layoff of workers from state and collective owned enterprises. Mainstream Chinese economists argue that many of the workers in these enterprises are “disguisedly unemployed” and have to be laid off to achieve better economic performance. In this paper, I argue that the productivity of state and collective owned enterprises to a large extent depends on capacity utilization and the level of aggregated demand. If the government undertakes active aggregate demand policy, the performance of state and collective owned enterprises can be substantially improved without large number of workers being laid off.

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  • Minqi Li, 2001. "China's Urban Unemployment: Exposed 'Disguised Unemployment' or Insufficient Aggregate Demand?," Working Papers wp22, Political Economy Research Institute, University of Massachusetts at Amherst.
    • Handle: RePEc:uma:periwp:wp22
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    Cited by:

    1. Elissa Braunstein & Gerald Epstein, 2002. "Bargaining Power and Foreign Direct Investment in China: Can 1.3 Billion Consumers Tame the Multinationals?," SCEPA working paper series. 2002-13, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.

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