nep-cna New Economics Papers
on China
Issue of 2008‒01‒05
nine papers chosen by
Zheng Fang
Ohio State University

  1. The determinants of household saving in China: a dynamic panel analysis of provincial data By Charles Yuji Horioka; Junmin Wan
  2. The Shifting Structure of China's Trade and Production By Li Cui; Murtaza H. Syed
  3. China's Changing Trade Elasticities By Jahangir Aziz; Xiangming Li
  4. In the Shadow of the China–Australia FTA Negotiations: What Australian Business Thinks about IP By Anne Leahy; Donald MacLaren; David Morgan; Kimberlee Weatherall; Elizabeth Webster; Jongsay Yong
  5. The Role of Provincial Policies in Fiscal Equalization Outcomes in China By Jorge Martinez-Vazquez; Baoyun Qiao; Li Zhang
  6. SME financing in China By Chen Xiang Liu
  7. Fiscal Decentralisation, Chinese Style: Good for Health Outcomes? By Hiroko Uchimura; Johannes P. Jütting
  8. Land rental markets in the process of rural structural trans formation : productivity and equity impacts in China By Jin, Songqing; Deininger, Klaus
  9. Securing property rights in transition: lessons from implementation of China ' s rural land contracting law By Jin, Songqing; Deininger, Klaus

  1. By: Charles Yuji Horioka; Junmin Wan
    Abstract: In this paper, we conduct a dynamic panel analysis of the determinants of the household saving rate in China using a life cycle model and panel data on Chinese provinces for the 1995-2004 period from China's household survey. We find that China's household saving rate has been high and rising and that the main determinants of variations over time and over space therein are the lagged saving rate, the income growth rate, and (in some cases) the real interest rate and the inflation rate. However, we find that the variables relating to the age structure of the population usually do not have a significant impact on the household saving rate. These results provide mixed support for the life cycle hypothesis as well as the permanent income hypothesis, are consistent with the existence of inertia or persistence, and imply that China's household saving rate will remain high for some time to come.
    Keywords: Saving and investment - China
    Date: 2007
  2. By: Li Cui; Murtaza H. Syed
    Abstract: This paper uses disaggregated trade data to assess how the expansion of China's production capacity and its changing production structure may be affecting its trade linkages with other countries. It finds that China is moving away from traditional assembly operations in its processing activities and its exports have started to rely more on domestically sourced components. In turn, China's imports and exports have begun to delink, with increased domestic sourcing contributing to the recent increase in its trade balance. In addition, as China moves up the value chain, both its imports and exports have become more sophisticated than in the past. As a result of these shifts, China may be becoming more exposed to fluctuations in the strength of the global economy, and changes in its exchange rate could have a bigger impact on the trade balance and the domestic economy than commonly believed.
    Keywords: Working Paper , Balance of trade , China , Production , Exchange rates , Imports , Exports , Exchange rate instability , Industrial structure ,
    Date: 2007–09–07
  3. By: Jahangir Aziz; Xiangming Li
    Abstract: China's sectoral trade composition, product quality mix, and import content of processing exports have all changed substantially during the past decade. This has rendered trade elasticities estimated using aggregate data highly unstable, with more recent data pointing to significantly higher demand and price elasticities. Sectoral differences in these parameters are also very wide. All this suggests greater caution in using historical data to simulate the response of the China's economy to external shocks and exchange rate changes. Analyses based on models whose estimated coefficients largely reflect the China of the 1980s and 1990s are likely to turn out to be wrong, perhaps even dramatically.
    Keywords: Trade , China, People's Republic of , Balance of trade , Exchange rates ,
    Date: 2007–11–29
  4. By: Anne Leahy (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Donald MacLaren (Department of Economics, University of Melbourne); David Morgan (Faculty of Law, University of Melbourne and Department of Foreign Affairs and Trade); Kimberlee Weatherall (T C Beirne School of Law, University of Queensland and Australian Centre for Intellectual Property in Agriculture); Elizabeth Webster (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Jongsay Yong (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)
    Abstract: This study collated responses from a survey of over 2,100 businesses across Australia to assess the extent of both their business dealings with China and their commercial interest in IP. The survey results reveal that among Australian businesses which have direct business dealings with China, IP issues (registration, examination and enforcement) are of less concern than Chinese regulations and legal transparency. Among the IP issues covered in the survey, IP enforcement poses the greatest problem for Australian businesses.
    Date: 2007–09
  5. By: Jorge Martinez-Vazquez (Andrew Young School of Policy Studies); Baoyun Qiao (Andrew Young School of Policy Studies, Georgia State University); Li Zhang (Andrew Young School of Policy Studies)
    Abstract: In this paper, we use pooled data for central-provincial and provincial-local governments in 2000-01, overall involving over 4000 sub-provincial governments, to assess China 's sub-national fiscal equalization practices and outcomes. Our goal is to explain horizontal fiscal disparities between and within provinces, with a special focus on the role played by intermediate-level governments, particularly the provincial governments, on overall equalization outcomes in China . The significant policy implication of our findings is that if the goal of the central government is to improve equity in the distribution of fiscal resources throughout the entire national territory, it will not be enough to improve the design and size of central-provincial transfers. There will be a need to re-structure and control the structure and practices of provincial-local government transfers.
    Keywords: Fiscal Equalization, central-Provincial, China, sub-national fiscal equalization
    Date: 2007–03–01
  6. By: Chen Xiang Liu
    Abstract: SMEs have a great contribution in China’s economic expansion. However, the financing predicament currently faced by SMEs constitutes a great bottleneck for their development. Banks are reluctant to lend to them, mainly due to the lack of collateral and their poor capability in pricing risk. This is the reason why credit guarantee institutions play a key role in SME financing and the perfection of the credit guarantee system is important for promoting their access to credit. In addition, the lifting of the ceiling on lending rates as well as other steps taken by banking authorities will encourage bank lending to SMEs. Finally, informal finance has a significant part in SME financing.
    Keywords: SME financing, credit guarantee, informal finance
    JEL: E26 E51 G21 O53
    Date: 2007
  7. By: Hiroko Uchimura; Johannes P. Jütting
    Abstract: This paper analyses the effect of fiscal decentralisation on health outcomes in China using a panel data set with nationwide county-level data. We find that counties in more fiscally decentralised provinces have lower infant mortality rates than counties where the provincial government remains the main spending authority, if certain conditions are met. Spending responsibilities at the local level need to be matched with county governments’ own fiscal capacity. For county governments that have only limited revenues, the ability to spend on local public goods such as health care depends crucially upon intergovernmental transfers. The findings of this paper, therefore, support the common assertion that fiscal decentralisation can lead to more efficient production of local public goods, while also highlighting the conditions required for this result to be obtained. <BR>Ce papier analyse l’effet de la décentralisation fiscale sur la santé en Chine, à partir d’une analyse de panel avec des données de district recueilli au niveau national. Les auteurs trouvent que, sous certaines conditions, les districts aux systèmes plus décentralisés ont des taux de mortalité infantiles moins élevés que ceux où le gouvernement provincial reste la principale autorité. Les responsabilités pour les dépenses au niveau local doivent toutefois être accompagnées de capacités fiscales adéquates. Pour les gouvernements de districts à bas revenus, la capacité à investir dans des biens publics comme les services de santé, dépend principalement des transferts intergouvernementaux. Les analyses confirment l’argument selon lequel la décentralisation fiscale peut mener à une plus grande efficacité des biens publics, en soulignant les conditions nécessaires pour atteindre ce résultat.
    Keywords: health, santé, fiscal decentralisation, décentralisation fiscale, China, Chine, Health-care finance, financement des services de santé
    JEL: H51 H72 H75 I18
    Date: 2007–11
  8. By: Jin, Songqing; Deininger, Klaus
    Abstract: The importance of land rental for overall economic development has long been recognized in theory, yet empirical evidence on the productivity and equity impacts of such markets and the extent to which they realize their potential has been scant. Representative data from China ' s nine most important agricultural provinces illustrate the impact of rental markets on households ' economic strategies and welfare, and the productivity of land use at the plot level. Although there are positive impacts in each of these dimensions, transaction costs constrain participation by many producers, thus preventing rental markets from attaining their full potential. The paper identifies factors that increase transaction costs and provides a rough estimate of the productivity and equity impacts of removing them.
    Keywords: Banks & Banking Reform,Political Economy,Economic Theory & Research,Rural Development Knowledge & Information Systems,Labor Policies
    Date: 2007–12–01
  9. By: Jin, Songqing; Deininger, Klaus
    Abstract: This paper is motivated by the emphasis on secure property rights as a determinant of economic development in recent literature. The authors use village and household level information from about 800 villages throughout China to explore whether legal reform increased protection of land rights against unauthorized reallocation or expropriation with below-average compensation by the state. The analysis provides nation-wide evidence on a sensitive topic. The authors find positive impacts, equivalent to increasing land valu es by 30 percent, of reform even in the short term. Reform originated in villages where democratic election of leaders ensured a minimum level of accountability, pointing toward complementarity between good governance and legal reform. The paper explores the implications for situations where individuals and groups hold overlapping rights to land.
    Keywords: Common Property Resource Development,Municipal Housing and Land,Access to Finance,Political Economy,Land and Real Estate Development
    Date: 2007–12–01

This nep-cna issue is ©2008 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.
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