Contents ��. Introduction......................................................................................................... 1 1.1 Purpose.................................................................................................... 1 1.2 Object and Scope................................................................................... 5 1.3 Methodology......................................................................................... 10 ��. Theoretical Background and Analytical Framework............................... 12 2.1 Rent-seeking Theory........................................................................... 12 2.1.1 Conventional Theory of Rent-seeking............................... 12 2.1.2 Rent-seeking in the Developing Countries........................ 18 2.2 Rent-seeking in China’s Plan-based Economy.............................. 24 2.2.1 Rent-seeking in the Transitional Economy after Reform 25 2.2.2 Rent-seeking in the Centrally Planned Economy before Reform........................................................................ 29 2.3 Analytical Model of Rent Utilization for the Plan-based Economy........................................................................... 33 2.3.1 Institutional Context for the Analytical Model................. 33 2.3.2 Analytical Model of Rent Utilization.................................. 34 ��. Rent Utilization in China’s Auto Industry: Before Reform................... 38 3.1 The Development of Auto Industry in the Centrally Planned Economy before Reform................................................... 38 3.2 Rents and Rent Creation ................................................................. 42 3.3 Rent Allocation.................................................................................... 48 3.3.1 Fragmented Structure of Rent Allocation in the Central Level........................................................................... 50 3.3.2 Multilayered Structure of Rent Allocation between Central Level and Local Level.......................................... 56 3.3.3 Institutional Arrangements of Local Governments Being Rent-seekers .................................. 58 3.4 Rent-seeking ....................................................................................... 62 3.4.1 Local Governments as the Principal Rent-seekers 62 3.4.2 State-owned Enterprises Became Rent-seekers with the Help of Local Governments...................... 67 ��. Rent Utilization in China’s Auto Industry: After Reform ................... 70 4.1 The Development of Auto Industry in the Transitional Economy of After Reform Stage..................................................... 70 4.2 Rents and Rent Creation.................................................................... 77 4.3 Rent Allocation.................................................................................... 89 4.3.1 The Disappearance of Traditional Rent-allocators ....... 90 4.3.2 The Fragmented Authority of Project Approval .......... 95 4.4 Rent-seeking ....................................................................................... 99 4.4.1 Rent-seeking by Local Governments ............................... 99 4.4.2 Rent-seeking by Enterprises ............................................. 105 ��. Comprehensive Analysis.............................................................................. 116 5.1 Rent Utilization in the Auto Industry........................................... 116 5.1.1 Rents and Rent Creation..................................................... 116 5.1.2 Rent Allocation..................................................................... 118 5.1.3 Rent-seeking........................................................................... 120 5.2 Diachronic Comparison................................................................... 124 ��. Conclusions..................................................................................................... 130 References.............................................................................................................. 137 List of Tables Table 1 Estimates of the Welfare Losses from Rent-seeking.................... 16 Table 2 Relevant Growth and Efficiency Implications of Different Rents..................................................................................... 19 Table 3 Interest Rate of Industrial Credit Adjustments(Monthly rate)... 45 Table 4 Exchange Rate Adjustments (US$100 and Sterling ��100=RMB ¥)........................................... 46 Table 5 Central and Local Investment in the Auto Industry, 1949~1978 (RMB Billion)................................................................. 65 Table 6 Total Automobile Output and Sedan Output, 2002~2015........ 76 Table 7 Tariffs for Imported Automobiles, 1986~2006........................... 82 Table 8 Joint ventures Built in China from 1984 to 2010...................... 111 Table 9 Major Actors of Rent Utilization and Their Functions and Strategies in China’s Auto Industry before and after Reform 124 List of Figures Figure 1 Institutional Rent under a Low-Price Control.............................. 31 Figure 2 Analytical Model of Rent Utilization.............................................. 35 Figure 3 Number of Auto Plant and Special Vehicle Factories, 1956~1978......................................................................... 40 Figure 4 Output of Automobiles, 1956~1978............................................. 41 Figure 5 Governing Structure of Soviet Union’s Auto Industry............. 50 Figure 6 Fragmented Structure of Rent Allocation in the Central Level 55 Figure 7 Multilayered Structure of Rent Allocation between Central and Local Level...................................................................... 57 Figure 8 Imports of sedans, 1979~2001....................................................... 71 Figure 9 Output of Total Automobiles and Sedans, 1979~2001............ 72 Figure 10 Number of Auto Plants, 1979~2001.......................................... 74 Figure 11 The Fragmented Structure and Rent Allocation Mechanism. 97 Figure 12 Rent Utilization Before Reform.................................................. 126 Figure 13 Rent Utilization After Reform.................................................... 126