nep-cna New Economics Papers
on China
Issue of 2007‒02‒24
eleven papers chosen by
Zheng Fang
Ohio State University

  1. The Role of Overseas Chinese in Europe in Making China Global: The Case of Portugal By Annette Bongardt; Miguel Santos Neves
  2. Technology Development and Job Creation in China By Lundin, Nannan; Sjöholm, Fredrik; Ping, He; Qian, Jinchang
  3. Bangladesh Apparels Export to the US Market: An Examination of Her Competitiveness vis-à-vis China By Mustafizur Rahman; Asif Anwar
  4. The Role of Small Firms in China's Technology Development By Lundin, Nannan; Sjöholm, Fredrik; Ping, He; Qian, Jinchang
  5. EE.UU.-China: Los ecos de la cumbre Bush-Hu By Xulio Rios
  6. Foreign direct investment and China's bilateral intra-industry trade with Japan and the US By Xing, Yuqing
  8. The Transition to Marked-Based Monetary Policy: What Can China Learn from the European Experience? By Oxelheim, Lars; Forssbæck , Jens
  9. The Unified Enterprise Tax and SOEs in China By John Whalley; Li Wang
  10. Catastrophic Payment and Health Protection in Rural China - Impact of New Cooperative Medical Scheme in Shandong Province By Dr Sukhan Jackson; Xiaoyun Sun1; Gordon Carmichael; Adrian C. Sleigh1.
  11. The Chinese Chaos Game By Raul, Matsushita; Iram, Gleria; Annibal, Figueiredo; Sergio, Da Silva

  1. By: Annette Bongardt (Universidade Moderna); Miguel Santos Neves (Universidade Moderna)
    Abstract: This paper aims at analysing the characteristics and dynamics of the Chinese business community in Portugal in the context of the growing phenomenon of Chinese migration flows to Portugal and to Europe. By means of original research based on primary data obtained through questionnaires and interviews applied to Chinese entrepreneurs and business associations the paper provides an in-depth analysis of the role that this community plays both as a facilitator of China’s integration in the world economy and a potential bridge between the European Union (EU) and China. The study concludes that the Chinese business community in Portugal is rather heterogeneous, dominated by immigrants from Zhejiang province, who operate predominantly in the service sector (retail and wholesale trade), taking advantage of the guanxi network within Europe so as to make use of the advantages of the European single market in order to consolidate competitive advantages. Moreover, this community plays a pro-active role in fostering China’s integration in the global economy by acting as windows for the penetration of Chinese exports on the one hand and by capturing and channelling foreign direct investment to China on the other hand.
    Keywords: Chinese business community in Portugal; Overseas Chinese network (guanxi); EU Single Market; EU-China trade and investment relations
    Date: 2007–02
  2. By: Lundin, Nannan (Örebro University); Sjöholm, Fredrik (Research Institute of Industrial Economics); Ping, He (National Bureau of Statistics of China); Qian, Jinchang (National Bureau of Statistics of China)
    Abstract: This paper examines how Science and Technology (S&T) contribute to job creation in the Chinese manufacturing sector. The ambition of transforming China into an innovation-oriented nation and the emphasis on indigenous innovation capacity building have placed Science and Technology (S&T) high on the Chinese policy agenda. At the same time, the need for job creation is pressing, both to absorb the huge supply of underemployed people, and to enable the annual 20 million new labor market entrants to find employment. We examine the relationship between S&T and job growth in the Chinese industrial sector. S&T can be expected to have both positive and negative effects on employment. For instance, new technology might increase competitiveness and enable Chinese firms to expand their labor force. On the other hand, new technology might be labor-saving, thereby enabling Chinese firms to produce more output with fewer employees. Based on a large sample of manufacturing firms in China between 1998 and 2004, we analyze how S&T affect employment growth. Our results suggest that S&T activities have no effect on job creation.
    Keywords: China; Science and Technology; Job-Creation
    JEL: J21 O14 O33
    Date: 2007–02–07
  3. By: Mustafizur Rahman; Asif Anwar
    Abstract: The paper tries to focus whether China's ascendancy will have any tangible impact on Bangladesh's export oriented RMG sector and identifies some of the apparel categories in which both the countries have common interests in the US market by analyzing the RCA index and recent performance of both the countries in view of the recent US-China MoU. The paper tries to assess the impact of China's accession to the WTO on Bangladesh's export oriented apparels sector by undertaking an indepth examination of the relative competitiveness correlates of Bangladesh and China in the US market and study their implications for Bangladesh's apparels export to the US market. Towards this, the study investigates the export performance of Bangladesh and China in the US market and price dynamics, and identifies the sources of strengths and weaknesses of Bangladesh vis-à-vis China.
    Keywords: Apparels, Export, US market, China, Bangladesh
    Date: 2006–11
  4. By: Lundin, Nannan (Örebro University); Sjöholm, Fredrik (Research Institute of Industrial Economics); Ping, He (National Bureau of Statistics of China); Qian, Jinchang (National Bureau of Statistics of China)
    Abstract: Science & Technology (S&T) is high on the Chinese policy agenda but there are large uncertainties on the actual S&T development. For instance, previous studies tend to focus only on large and medium-sized enterprises (LMEs). The situation in Chinese small firms is far less explored. This paper aims to examine the role of S&T-based small firms. More precisely, we examine how much S&T that has been accounted for by small firms and how their S&T intensity differs across industries and ownership groups. We also analyze how various firm characteristics differ over size categories and S&T status. This study is based on newly processed micro level data provided by the National Bureau of Statistics with information on a large number of S&T indicators for small-, medium-, and large-sized manufacturing firms in China in 2000 and 2004. Our results suggest that small firms in Chinese S&T resemble their role in many other countries. They account for a comparably small share of total S&T and most small firms are not engaged in any S&T. However, those small firms that do engage in S&T tend to be more S&T intensive and have a higher output in terms of patents than larger Chinese S&T firms.
    Keywords: Technology; SMEs; China; S&T; R&D
    JEL: O30 O31 O53
    Date: 2007–02–06
  5. By: Xulio Rios
    Abstract: China se muestra cada vez más segura de sí misma en su actuar internacional. No se trata solo de poder económico. A diferencia de EE.UU., cuyos valores han perdido credibilidad en razón de un proselitismo militarizado y de acentuado doble rasero, su influencia va creciendo y ello provoca rivalidades estratégicas de profundo calado cuando aumentan por doquier las tensiones originadas por la búsqueda de la seguridad económica. A raíz de la cumbre, en Beijing se habla de un nuevo “consenso de Washington”. Pero en el Renmin Ribao (Diario del Pueblo) del 24 de abril también se advierte: “En adelante, es posible que haya reveses en la política de EEUU hacia China y se debe apreciar con lucidez esta situación”. La cosa no parece tener fácil arreglo. De entrada, China insiste en seguir su propio camino y ese ejercicio será leído en Washington en clave de postular una rivalidad.
    Keywords: China, Economy, bilateral relations, U.S.A., Diplomacy
  6. By: Xing, Yuqing (BOFIT)
    Abstract: This paper analyzes dynamic changes of China's intra-industry trade with its major trading partners, Japan and the US, from 1980 to 2004. It also investigates to what extent foreign direct investment promoted intra-industry trade. The empirical results show that, while shares of China's intra-industry trade with both Japan and U.S rose substantially, its intra-industry trade with Japan has reached 35 per cent of the overall trade, considerably larger than 10 per cent with the US. Sino-Japan intra-industry trade concentrated in the electrical and machinery sectors accounted for 52 per cent and 46 per cent of overall trade respectively. On the other hand, it is in the chemical and food sectors where intra-industry trade represented a relatively large proportion of Sino-US trade, 50 per cent and 30 per cent accordingly in each sector. In addition, the analysis indicates that Japanese direct investment in China performed a significant role in enhancing intra-industry trade between Japan and China. However, it found no evidence that the US direct investment in China contributed to the growth of the bilateral intra-industry trade between the two countries.
    Keywords: intra-industry trade; FDI; China
    JEL: F14 F23
    Date: 2007–01–16
  7. By: Sanjay G. Reddy (Dept. of Economics, Barnard College, Columbia University); Camelia Minoiu (Dept. of Economics and Institute for Social and Economic Research and Policy, Columbia University)
    Abstract: This Working Paper investigates how estimates of the extent and trend of consumption poverty in China between 1990 and 2001 vary as a result of alternative plausible assumptions concerning the poverty line and estimated levels of consumption. The exercise is motivated by the existence of considerable uncertainty about the appropriate poverty lines to apply and the level and distribution of resources in China. Our methodology focuses on the following sources of variation: alternative purchasing power parity conversion factors (used to convert an international poverty line), alternative estimates of the level and distribution of private incomes, alternative estimates of the propensity to consume of lower income groups, and alternative consumer price indices. It is widely believed that substantial poverty reduction took place in China in the 1990s, and we find this conclusion to be robust to the choice of assumptions. Moreover, there is no evidence that the rate of poverty reduction declined over time. China’s record of reducing consumption poverty has been dramatic. However, estimates of the extent of Chinese poverty in any year are greatly influenced by the assumptions made. The choice among these estimates is likely to have large implications for the perceived extent and trend of world poverty.
    Keywords: Consumption poverty, China, Sensitivity analysis
    JEL: I32 D31
    Date: 2006–07
  8. By: Oxelheim, Lars (Research Institute of Industrial Economics); Forssbæck , Jens (Lund University)
    Abstract: We discuss the prospects for Chinese money market development and transition to market-based monetary policy operations based on a comparative historical analysis of the present Chinese situation and the development in 11 European countries from 1979 up to the launch of European Economic and Monetary Union (EMU). Central banks in the latter group typically had an incentive to encourage the formation of efficient benchmark segments in the domestic money markets for the conduct of open market operations as traditional quantity-oriented instruments became increasingly ineffective. China is displaying many of the same symptoms as the European countries in the 1970s and 1980s, including poor monetary transmission due to excess liquidity and conflicts of interest due to unclear priority among multiple policy goals. We conclude that the current Chinese multiple-target monetary policy is counter-productive to efforts to develop an efficient money market that can serve as arena for an effective market-based monetary policy.
    Keywords: Monetary Policy Operations; Money Market; China; European Union; Deregulation
    JEL: E42 E52 F41
    Date: 2007–02–06
  9. By: John Whalley; Li Wang
    Abstract: Currently proposals are actively circulating in China to move to a unified enterprise tax structure with similar tax treatment of state-owned enterprises (SOEs), other private enterprises (OPE) and foreign investment enterprises (FIEs). FIEs presently receive significant tax preferences through a sharply lower tax rate, tax holidays and other provisions. Here we use analytical representations of SOE behavior, which differ from that of the competitive firm, to argue that a unified tax structure may not be a desirable tax change and that typically a higher tax rate on SOEs is called for on efficiency grounds. Using a worker control model with endogenously determined shirking, taxes on SOEs reduce shirking and a reduced SOE tax rate under a unified tax relaxes discipline on SOEs and losses result. Our results indicate a 0.26% of GDP welfare loss using 2004 data from a unified tax, and larger loss relative to an optimal tax scheme. Alternatively, if we use a managerial control model variant, we find a 0.19% welfare loss from a unified tax, and larger losses relative to initial higher SOE tax rates.
    JEL: H2 P3 P35
    Date: 2007–02
  10. By: Dr Sukhan Jackson; Xiaoyun Sun1; Gordon Carmichael; Adrian C. Sleigh1. (School of Economics, The University of Queensland)
    Abstract: In 2005, from a stratified cluster sample of 3,101 rural households we identified 375 households that might be at risk of catastrophic payments, by searching through NCMS claims and interviewing key informants. We interviewed these 375 households and confirmed that 239 had had catastrophic payments (= 40% of the household’s capacity to pay) during 2004. A validity test of our screening method found another 8 cases among immediate neighbours of these 375 households; by extrapolation, we obtained an adjusted total of 289 catastrophic households in the sample of 3,101. We measured the impact of the NCMS on hardship alleviation by counterfactual analysis, comparing catastrophic payments before and after NCMS reimbursements.
    Date: 2007
  11. By: Raul, Matsushita; Iram, Gleria; Annibal, Figueiredo; Sergio, Da Silva
    Abstract: The yuan-dollar returns prior to the 2005 revaluation show a Sierpinski triangle in an iterated function system clumpiness test. Yet the fractal vanishes after the revaluation. The Sierpinski commonly emerges in the chaos game, where randomness coexists with deterministic rules [2, 3]. Here it is explained by the yuan’s pegs to the US dollar, which made more than half of the data points close to zero. Extra data from the Brazilian and Argentine experiences do confirm that the fractal emerges whenever exchange rate pegs are kept for too long.
    JEL: G15
    Date: 2006

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