nep-cna New Economics Papers
on China
Issue of 2007‒05‒19
ten papers chosen by
Zheng Fang
Ohio State University

  1. Determinants of China’s Energy Imports: An Empirical Analysis By Xingjun Zhao; Yanrui Wu
  2. Financial Aspects of Transactions with FDI: Trade Credit Provision by SMEs in China By Ito, Seiro; Watanabe, Mariko; Yanagawa, Noriyuki
  3. Technology Progress, Efficiency, and Scale of Economy in Post-reform China By Kui-Wai Li; Tung Liu; Lihong Yun
  4. Service Sector Growth in China and India: A Comparison By Yanrui Wu
  5. FDI and credit constraints : firm level evidence in China By Jérôme Héricourt; Sandra Poncet
  6. Forest management policies and resource balance in China: an assessment of the current situation By Sylvie Demurger; Hou Yuanzhao; Yang Weiyong
  7. Diversification and agrarian change under environmental constraints in rural China: Evidence from a poor township of Beijing municipality By Sylvie Demurger; Martin Fournier; Yang Weiyong
  8. Does energy efficiency label alter consumersf purchase decision? A latent class approach on Shanghai data By Junyi Shen; Tatsuyoshi Saijo
  9. The Flowchart Model of Cluster Policy: The Automobile Industry Cluster in China By Kuchiki, Akifumi
  10. Technology integration and seed market organization: The case of GM Cotton diffusion in Jiangsu Province (China) By Michel Fok; Naiyin Xu

  1. By: Xingjun Zhao (Department of International Economics and Trade, Nankai University, PR China); Yanrui Wu (UWA Business School, The University of Western Australia)
    Abstract: Sustained economic growth in China has triggered a surge of energy imports, especially oil imports. This paper investigates the determinants of China’s energy import demand by using cointegraiton and VECM techniques. The findings suggest that, in the long run, growth of industrial production and expansion of transport sectors affect China’s oil imports, while domestic energy output has a substitution effect. Thus, as the Chinese economy industrializes and the automotive sector expands, China’s oil imports are likely to increase. Though China’s domestic oil production has a substitution effect on imports, its growth is limited due to scarce domestic reserve and high exploration costs. It is anticipated that China will be more dependent on overseas oil supply regardless of the world oil price.
    Keywords: Energy consumption, energy imports, China and VECM
    Date: 2007
  2. By: Ito, Seiro; Watanabe, Mariko; Yanagawa, Noriyuki
    Keywords: Incomplete contract, Trade credit, Spillover of technology, FDI, Government-owned firms, China, Foreign investments, Credit, Small and medium-scale enterprises
    JEL: G2 K0 O5 P31
    Date: 2007–04
  3. By: Kui-Wai Li (City University of Hong Kong, Hong Kong SAR); Tung Liu (Department of Economics, Ball State University); Lihong Yun (City University of Hong Kong, Hong Kong SAR)
    Abstract: This paper analyzes the productivity change of the thirty provinces in China’s post-reform economy. The productivity change is estimated from the stochastic frontier model, in which the maximum likelihood estimation is applied to an augmented logarithmic production function incorporated with a human capital variable. The empirical results show technical progress is the main contributor to productivity growth and the scale of economy became important in recent years, but technical efficiency has edged downwards in the sample period. We also found that the physical capital is the important factor for economic growth and human capital is inadequate even though it has a positive and significant effect on growth. The relevant policy implication for a sustainable post-reform China economy is the need to promote human capital accumulation and improvement in technical efficiency.
    Keywords: technical efficiency, technical progress, human capital, China economy
    Date: 2007–04
  4. By: Yanrui Wu (UWA Business School, The University of Western Australia)
    Abstract: China and India have recently achieved spectacular economic growth. However, services in these two Asian giants have played a very different role. In India, the service sector contributes to more than 54 per cent of GDP while its GDP share in China is much smaller (below 41 per cent in 2004). To provide an explanation for the contrasting trajectories, this paper examines and compares service sector developments in these two Asian giants. It investigates the determinants of demand for services and sheds light on the outlook for service sector growth in the two countries.
    Keywords: China and India, Asia, service sector, growth determinants and regression analysis
    Date: 2007
  5. By: Jérôme Héricourt (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I], EQUIPPE - Université de Lille - [Université des Sciences et Technologie de Lille - Lille I]); Sandra Poncet (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I], CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - [Centre d'analyse stratégique])
    Abstract: In this paper, we analyze whether incoming foreign investment in China plays an important role in alleviating domestic firms' credit constraints. Access to external finance is a crucial determinant of business expansion. Using firm-level data on 2,200 domestic companies for the period 1999-2002, we investigate the extent to wich firms are financially constrainted and whether direct foreign investment relaxes financing constraints of firms. When we split domestic firms into public and private firms, we find that public firms' investment decisions are not sensitive to debt ratios or the cost of debt. Nor is there any evidence that public firms are affected by foreign firms presence. We interpret this as evidence in support of the notion of a soft budget constraint for public firms. In contrast, private domestic firms appear more credit constrained than state-owned firms but their fincancing constraints tend to ease in a context of abundant foreign investment.
    Keywords: Financial constraint, corporate finance, Foreign Direct Investment.
    Date: 2007–05–04
  6. By: Sylvie Demurger (GATE - Groupe d'analyse et de théorie économique - [CNRS : UMR5824] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines]); Hou Yuanzhao (Chinese Academy of Forestry - [Chinese Academy of Forestry]); Yang Weiyong (University of International Business and Economics - [University of International Business and Economics])
    Abstract: Using the latest forest inventory, this paper provides a comprehensive analysis of China's forest sector by focusing on new forest trends, forest policy changes and challenges to achieve a sustainable forest management. We analyze the dynamics of forest resources and provide an impact assessment of forest policies on China's forestry development over the last decades. Moreover, the analysis of the forest market highlights substantial disequilibria marked by a limited domestic supply potential and a growing demand for forest products satisfied by increasing imports. Internal and external solutions are explored and their implications for China and supplying countries are assessed.
    Keywords: China ; Forest management ; Forest resources
    Date: 2007–05–07
  7. By: Sylvie Demurger (GATE - Groupe d'analyse et de théorie économique - [CNRS : UMR5824] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines]); Martin Fournier (GATE - Groupe d'analyse et de théorie économique - [CNRS : UMR5824] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines]); Yang Weiyong (University of International Business and Economics - [University of International Business and Economics])
    Abstract: This article illustrates the impact of changes related to market reforms and environmental policies on the economic structure in rural China by providing a comparative analysis of several villages in a poor township in Beijing municipality. Two main concomitant phenomena are affecting agricultural and non-agricultural choices in the studied area. First, the introduction of market mechanisms is encouraging local population to engage in new activities that are closer to local comparative advantages. Second, rural households are facing new constraints in the form of environmental protection measures, which have weakened traditional insurance channels provided by forest resources and cattle stock. Drawing on household-level survey data and interviews with village heads conducted in ten villages of Labagoumen township in December 2003, this article analyzes households decisions in response to market reforms and environmental constraints. We find large disparities both between villages and households in the diversification process and discuss the reasons of observed inertia in the region, most households still heavily relying on corn production.
    Keywords: agrarian change ; Environmental protection ; Income-source diversification ; rural China
    Date: 2007–05–07
  8. By: Junyi Shen (OSIPP,Osaka University); Tatsuyoshi Saijo (ISER,Osaka University)
    Abstract: In this paper we apply hypothetical choice experiments through a field survey in Shanghai of China to examine whether China Energy Efficiency Label affects consumersf choices of air conditioner and refrigerator. A latent class approach is used to observe both heterogeneities among the respondents and product brands. The results suggest that the effect of energy efficiency label on consumersf preferences is twofold. First, more energy efficient air conditioners or refrigerators are preferred by consumers, no matter whether they are with foreign brands or domestic brands and whether they are new or second-hand. Second, energy efficiency label per se is recognized by consumers. In addition, presence of a (hypothetical) label that indicates the electricity billfs difference comparing to a standard model is significantly preferred by the respondents in most of the cases, suggesting that more information provided to consumers makes them much happier. Finally, the class probability weighted willingness to pay values for one rank upgrading in energy efficiency of refrigerator are higher than those of air conditioner, implying that consumers have an incentive to pay more for appliances used more frequently.
    Keywords: Energy efficiency label, Consumersf purchase decision, Latent class model, Willingness to pay, China
    JEL: C25 C93 D12 Q49
    Date: 2007–05
  9. By: Kuchiki, Akifumi
    Abstract: This paper proposes a general model of the flowchart approach to industrial cluster policy and applies this model to Guangzhou's automobile industry cluster. The flowchart approach to industrial cluster policy is an action plan for prioritizing policy measures in a time-ordered series. We reached the following two conclusions. First,we clarified the effects of Honda, Nissan, and Toyota on agglomeration in Guangzhou's automobile industry cluster. Second, we established that local governments play a crucial role in successful industrial cluster policy, and that the mayor of the local government should be offered incentives in order to target industrial clustering and implement cluster policy.
    Keywords: Prioritization of cluster policy, Linearization of policy measures, Flowchart model, Inductive method, Anchor firm, Capacity, China, Industrial estates, Industrial policy, Automobile industry
    JEL: G18 O18 R11
    Date: 2007–04
  10. By: Michel Fok (UPR10 - Systèmes cotonniers en petits paysannats - [CIRAD]); Naiyin Xu (RIIC - Research Institute of Industrial Crops - [Jiangsu Academy of Agricultural Sciences])
    Abstract: Plusieurs articles ont contribué à faire passer l'idée selon laquelle les avantages spécifiques du coton-Bt sont responsables du succès de la diffusion du coton génétiquement modifié en Chine. L'efficience du coton-Bt varie cependant entre les régions cotonnières du pays. Dans la Province du Jiangsu, le long de la Vallée du Fleuve Yangtze, il n'y a pas d'augementation de rendement, la réduction de l'utilisation des insecticides est faible et il n'y a pas de gain de rendement associé spécifiquement à l'utilisation du coton-Bt. <br />L'utilisation du coton-Bt est néanmoins quasi générale. Une approche plus globale, en ne se focalisant pas seulement sur les effets spécifiques du coton-Bt, permet de comprendre ce paradoxe apparent. Dans la Province du Jiangsu, la diffusion du coton-Bt a bénéficié de son intégration dans les cultivars hybrides qui sont parfaitement adaptés à la technique de transplantation. Ce cas chinois indique que l'évaluation de l'utilisation du coton-Bt dans les autres pays devrait considérer le degré de compatibilité avec les techniques existantes de production.<br />En Chine, la commercialisation du coton-Bt a induit la modernisation du marché des semences . Les paysans ont d'abord bénéficié de ce processus avant de pâtir des effets négatifs des stratégies de commercialisation des semences au prix élevé. Si le coton-Bt doit donner plus aux paysans qu'il ne leur retire, une certaine regulation du marché des semences est souhaitable.
    Keywords: Agriculture, Biotechnologies, Industrie des semences, variétés, concurrence, marketing des semences
    Date: 2007–05–06

This nep-cna issue is ©2007 by Zheng Fang. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.