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on China |
| By: | Chun- Yu Ho (Department of Economics, Boston University); Dan Li (Department of Economics, Boston University) |
| Abstract: | Abstract. Regional inequality is severe in China since regional development is uneven due to various initial conditions and government policies. We employ unit root tests allowing for structural breaks to alternative inequality measures from 1952 to 2000. Empirical results indicate that (1) the regional inequality is trend stationary with structural breaks rather than follow a random walk. Thus, ignoring structural changes might induce incorrect inference and misleading policy implications; (2) the break points are associated with episodic events in Chinese economic history such as the Cultural Revolution and market reforms. It implies that the policies had a long-lasting and fundamental effect on the inequality. |
| Keywords: | Structural break; unit root; inequality; China |
| JEL: | C22 O15 R58 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:bos:wpaper:wp2007-014&r=cna |
| By: | Rahardja, Sjamsu |
| Abstract: | This paper investigates the extent of China ' s export boom in machinery and analyzes trade in components and finished machinery between China and Southeast Asia. China has increased its world market share in machinery exports. The median relative unit value of its finished machinery exports has also risen. Yet the author finds no evidence that China ' s expansion in the world machinery market has squeezed the market shares of Southeast Asian machinery exports. Instead, components made by Southeast Asian countries are increasing in unit value and gaining market share in China. |
| Keywords: | Markets and Market Access,Economic Theory & Research,Free Trade,General Manufacturing,Debt Markets |
| Date: | 2007–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4297&r=cna |
| By: | Chang-Tai Hsieh; Peter J. Klenow |
| Abstract: | Resource misallocation can lower aggregate total factor productivity (TFP). We use micro data on manufacturing establishments to quantify the extent of this misallocation in China and India compared to the U.S. in recent years. Compared to the U.S., we measure sizable gaps in marginal products of labor and capital across plants within narrowly-defined industries in China and India. When capital and labor are hypothetically reallocated to equalize marginal products to the extent observed in the U.S., we calculate manufacturing TFP gains of 25-40% in China and 50-60% in India. |
| JEL: | O11 O47 O53 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13290&r=cna |
| By: | Rod Tyers; Jane Golley; Iain Bain |
| Abstract: | International pressure to revalue China’s currency stems in part from the expectation that rapid economic growth should be associated with a real exchange rate appreciation. This hinges on the Balassa-Samuelson hypothesis under which economic growth, stemming from improvements in traded sector productivity, causes non-traded prices to rise. The puzzle is that, while evidence on China’s productivity and prices supports this hypothesis, its real exchange rate has shown no long run tendency to appreciate. Resolution requires extension of the hypothesis to allow for effects on the real exchange rate due to non-traded productivity improvements or, in association with failures of the law of one price for traded goods, labour supply growth and growth-related demand switches due to changes in financial capital flows and trade distortions. The sensitivity of China’s real exchange rate to these determinants is reviewed with the results confirming that financial and capital outflows are dominant depreciating forces in the short run. Along with WTO accession trade reforms, it is shown that the heretofore rising surplus of Chinese domestic saving over its investment has restrained the real exchange rate from appreciating since the late 1990s. |
| JEL: | C68 C53 E27 F21 F43 F47 O11 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:acb:camaaa:2007-14&r=cna |
| By: | Luca, MARCHIORI |
| Abstract: | In this paper, different scenarios of increased cooperation between China and African countries are simulated. Recent intensification of political and economic ties between China and Sub-Saharan Afreican countries may give hope that an economic improvement in Sub-Saharan Africa (SSA) is possible. Three channels may lead to a catching-up for Africa with China : a reduction in AfricaÕs investment risk, an increase in its total factor productivity (TFP) and an improvement of its worker skills. A computable general equilibrium model of the world economy is used, that shares the world in 10 regions, among which Sub-Saharan Africa and China. Three scenarios are considered in which, by 2100, Africa will have reduced simultaneously its gaps in investment risk, TFP and eduction to China by either 20% (scenario 1), 40% (scenario2) or 60% (scenario3). The effects on the Sub-Saharan African economy are very promising. The results show that, already in 2050, Africa will have increased its per capita Gross Domestic Product (GDP) by 50% with scenario1, 80% with scenario 2 and by 125% with scenario 3. |
| Keywords: | OLG-CGE Model, Catching-up, sSmulations, Africa, China |
| JEL: | E27 J11 O47 O55 O57 |
| Date: | 2007–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvec:2007014&r=cna |
| By: | Rod Tyers; Jane Golley |
| Abstract: | International pressure to revalue China’s currency stems in part from the expectation that rapid economic growth should be associated with a real exchange rate appreciation. This hinges on the Balassa-Samuelson hypothesis under which economic growth, stemming from improvements in traded sector productivity, causes non-traded prices to rise. More generally, real depreciations can stem from non-traded productivity improvements or, in association with failures of the law of one price for traded goods, labour supply growth and growth-related demand switches due to changes in the saving rate, trade distortions or investment risk premia. This chapter examines the sensitivity of China’s real exchange rate to these determinants. The results confirm that financial capital inflows are a dominant appreciating force in the short run, helping to explain why it is the surplus of Chinese domestic saving over its investment that has restrained the real exchange rate from appreciating during the past decade. In the long term, the appreciating effect of the inevitable fall in the saving rate is likely to be at least partially offset by the depreciating effects of skill acquisition and services productivity growth. Indeed, if future Chinese growth is propelled by these factors, a long term real depreciating trend could be in store. |
| JEL: | C68 C53 E27 F21 F43 F47 J11 J13 J26 O11 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:acb:cbeeco:2007-479&r=cna |
| By: | Chun-Yu Ho (Department of Economics, Boston University); Dan Li (Department of Economics, Boston University) |
| Abstract: | This paper analyzes the evolution of Chinese urban income distribution across space and time in post-reform era. Our results suggest no evidence on income convergence across cities during the period 1984-2003. We find that cities with comparable income level are likely to be co-located in the same region; further, cities tend to mirror the mobility of their counterparts located in the same province, but not the same region. The divergence in urban income across the nation will continue if the current economic growth pattern persists in the future. |
| Keywords: | City Income Distribution; Convergence; Markov Process; Spatial Dependence; China |
| JEL: | O15 O18 R12 R58 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:bos:wpaper:wp2007-23&r=cna |
| By: | Dimaranan, Betina; Ianchovichina, Elena; Martin, Will |
| Abstract: | Although both China and India are labor-abundant and dependant on manufactures, their export mixes are very different. Only one product-refined petroleum-appears in the top 25 products for both countries, and services exports are roughly twice as important for India as for China, which is much better integrated into global production networks. Even assuming India also begins to integrate into global production chains and expands exports of manufactures, there seems to be opportunity for rapid growth in both countries. Accelerated growth through efficiency improvements in China and India, especially in their high-tech industries, will intensify competition in global markets leading to contraction of the manufacturing sectors in many countries. Improvement in the range and quality of exports from China and India has the potential to create substantial welfare benefits for the world, and for China and India, and to act as a powerful offset to the terms-of-trade losses otherwise associated with rapid export growth. However, without efforts to keep up with China and India, some countries may see further erosio n of their export shares and high-tech manufacturing sectors. |
| Keywords: | Economic Theory & Research,Trade Policy,Free Trade,Emerging Markets,Currencies and Exchange Rates |
| Date: | 2007–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4304&r=cna |
| By: | Ravallion, Martin |
| Abstract: | The central governments of many developing countries have chosen to decentralize their anti-poverty programs, in the expectation that local a gents are better informed about local needs. The paper shows that this potential advantage of decentralized eligibility criteria can come at a large cost, to the extent that the induced geographic inequities undermine performance in reaching the income- poor nationally. These issues are studied empirically for (probably) the largest transfer-based poverty program in the world, namely China ' s Di Bao program, which aims to assure a minimum income through means-tested transfers. Poor municipalities are found to adopt systematically lower eligibility thresholds, reducing the program ' s ability to reach poor areas, and generating considerable horizontal inequity. |
| Keywords: | Inequality,Services & Transfers to Poor,Poverty Monitoring & Analysis,,Economic Theory & Research |
| Date: | 2007–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4303&r=cna |