nep-cna New Economics Papers
on China
Issue of 2008‒02‒16
seven papers chosen by
Zheng Fang
Ohio State University

  1. Effective Demand, Local Governments and Economic Growth in Post-Mao China: A Spatial Econometrics Perspective By Yongbok Jeon
  3. Business Cycle Accounting for the Chinese Economy By Gao, Xu
  4. China and the Future of Asian Electronics Trade By Byron Gangnes; Ari Van Assche
  5. Standardisation Processes in China and the European Union explained by Regional Innovation Systems By Quirine van Voorst tot Voorst; Ruud Smits; John van den Elst
  6. ‘Separating the Roots of the Chrysanthemum’: Nishihara Kamezō and the Abortive China Loans, 1917-18 By Schiltz, Michael
  7. Effects of the New Cooperative Medical Scheme on village doctor’s prescribing behaviour in Shandong Province By Xiaoyun Sun; Sukhan Jackson; Gordon Carmichael; Adrian C. Sleigh

  1. By: Yongbok Jeon
    Abstract: The purpose of this study is to empirically test the validity of Kaldor’s laws of economic growth in China between 1978 and 2004 and to provide an alternative explanation of sources of Chinese economic growth in a Kaldorian perspective. First, in a spatial econometrics perspective using a regional data set, the present paper empirically verifies that Kaldorian hypotheses on economic growth hold in China during the sample period. Second, it suggests the empirical findings as proving the validity of a demand-side approach. Third, taking this implication, this study provides a more detailed alternative explanation of the sources and processes of economic growth in China during the sample period. Finally, considering a striking finding of the lack of spatial (regional) dependence among Chinese provinces, it also discusses the role of local governments in the development process in China. This study is expected to contribute to the literature as being one of the first studies that identifies sources of Chinese economic growth in demand side.
    Keywords: Economic growth in China, Kaldor’s laws, effective demand, Chinese local governments
    JEL: O11 O14 O53 R58
    Date: 2008–04
  2. By: Andreas Bausch (Friedrich-Schiller-Universität Jena, Germany); Duc Linh Van Tri (Jacobs University Bremen, Germany)
    Abstract: After its economic opening in 1978, China has become more and more attractive for foreign direct investments and has developed into a strong internationalization target for other countries. This study analyzes the internationalization-performance relationship of German companies entering the Chinese market. The analysis is carried out for a sample of 257 announcements of the internationalization of German firms into China between 1978 and 2005. The event study methodology is used to measure the German stock market reaction to this event in order to enable a conclusion on the creation or destruction of share-holder value of German firms internationalizing into China.
    Keywords: Internationalization, market entry, China, financial performance
    Date: 2007–12–21
  3. By: Gao, Xu
    Abstract: We evaluate sources of business cycle fluctuations in China after 1978 with business cycle accounting method developed by Chari, Kehoe, and McGrattan (2007). We find that efficiency wedge, which represents institutional change and technology advance, was the main source of economic fluctuations in 1978 - 2006. The amplitude of it fluctuation declined after 1992, which resulted in moderation of business cycle fluctuations. We also find that distortions manifest themselves as taxes on investment, which represents frictions in the capital market, became another economic fluctuation source after 1992, which is different from results of business cycle accounting on US and Japan data. Our results also show that government consumption and net exports played minor roles in generating business cycles. Our results point out several promising directions for future research on China’s business cycle.
    Keywords: Business cycle fluctuations; Business cycle accounting; Chinese economy
    JEL: O47 E32 O53 E37
    Date: 2007–11
  4. By: Byron Gangnes; Ari Van Assche
    Abstract: China’s emergence as a key player in the global electronics industry has ignited concerns among its East Asian neighbors. Upper and middle-income economies fear that China’s rise is hollowing out their electronics industrial base. Lower-income economies worry that they cannot compete with China’s seemingly endless supply of cheap labor. In this chapter, we describe the forces behind China’s rise in electronics, and we consider the implications for regional electronics trade and production patterns. Using a unique world electronics production data set, we investigate the upgrading trajectories of East Asian economies within the industry. Consistent with the theory of international production fragmentation, we find that Japan and the NIEs have a more sophisticated production mix than their lower-income neighbors. These latter economies, however, are upgrading their electronics industries more rapidly. <P>L'émergence de la Chine comme étant un joueur clé dans l'industrie électronique mondiale a suscité de l’inquiétude parmi ses voisins de l'Asie de l'Est. Les économies à revenus élevé et moyen craignent que la montée de la Chine nuise à leur centre industriel électronique. Les économies plus pauvres, pour leur part, s'inquiètent du fait qu'elles ne pourront pas être compétitives face à la main d’œuvre bon marché sans limite de la Chine. Dans ce chapitre, nous décrivons les forces à l’origine de la montée de la Chine dans le domaine de l'électronique, et en étudions les conséquences pour le commerce électronique régional et les modèles de production. Employant une banque de données unique sur la production électronique mondiale, nous examinons les trajectoires de perfectionnement des économies de l’Asie de l’Est dans l’industrie. En accord avec la théorie de fragmentation de la production internationale, nous trouvons que le Japon et les nouvelles économies industrialisées détiennent une combinaison de production plus sophistiquée que leurs voisins à faible revenu. Ces derniers, cependant, voient leurs industries de l'électronique progresser plus rapidement.
    Keywords: China, trade, technological upgrading, electronics, Chine, commerce, perfectionnement technologique, électronique
    JEL: F14 O30 L63
    Date: 2008–02–01
  5. By: Quirine van Voorst tot Voorst; Ruud Smits; John van den Elst
    Abstract: Standardisation processes and policies demand increased attention due to their contribution to enterprise competitiveness and relation to trade barriers. However, standardisation differs considerably per region. In order to investigate these differences in more detail, the standardisation processes for digital terrestrial television in China and the European Union are compared in terms of actors involved, their roles and relations, and the institutions governing standardisation processes. The structure and underlying dynamics of these regional innovation systems are analysed and compared. The analysis is based on a set of functions describing the underlying dynamics of both systems. For every step in the standardisation process, the influence of innovation functions, actors and institutions is listed and evaluated in detail. Based on the results major differences between standardisation processes in China and the European Union are identified. It further will be pointed out that these differences can be related to major differences in the institutional set up and dynamics of the related innovation systems.
    Keywords: standardisation, regional innovation systems
    Date: 2008–02
  6. By: Schiltz, Michael
    Abstract: In the period between 1917 and 1918, a series of mysterious loans negotiated between Japanese middleman Nishihara Kamezō 西原亀三 and the government of warlord Duan Qirui 段祺瑞 amounted to the fabulous amount of ¥145,000,000. Although reporting about these loans at the time was confused to say the least, we now know that there existed definite and close relationships between Nishihara Kamezō on the one hand, and the Terauchi Cabinet in Tokyo, in the person of then Minister of Finance Shōda Kazue 勝田主計 in particular.1 Analyzing the Nishihara loans in their geopolitical and historical particularity and isolation is, however, to miss the point. In what context(s) were these infamous loans raised? What was, for instance the nature of their geopolitical climate and their international institutional character? Next, in what respect did the Nishihara loans differ from earlier, more 'official' instances of yen diplomacy? In what respect did they represent a break with former administrations, and, more importantly, did their exist a broad consensus about their objectives and appropriateness? And not in the least: how did China's turbulent politics contribute to their ill fate?
    Keywords: money doctoring; Japanese history; Chinese history. loans; warlordism; Nishihara; imperialism
    JEL: N5 N7 N4
    Date: 2007
  7. By: Xiaoyun Sun; Sukhan Jackson; Gordon Carmichael; Adrian C. Sleigh (School of Economics, The University of Queensland)
    Abstract: Objective: To assess the effects of China’s new community health insurance, the New Cooperative Medical Scheme (NCMS), on village doctors’ prescribing behaviour. NCMS began in 2003. Method, In 2005 we conducted a quasi-experimental case-control study in Shandong Province, and collected information from 2,271 patient visits in 30 village health stations. Results, NCMS has adversely influenced prescribing behaviour of village doctors. Average number of drugs prescribed, percentage of prescriptions containing antibiotics, number of antibiotics per prescription, percentage of patients given injections, and average per prescription cost were consistently higher in NCMS village health stations than non-NCMS. Within NCMS villages, prescribing behaviour towards insured patients was significantly different to the uninsured. Conclusion, Over-prescribing is common in villages with and without health insurance, with grave concerns for service quality and drug-use safety. Policy implications are NCMS should be redesigned to exert more influence on health providers, with incentives for cost containment and service quality. Stricter regulatory environment for prescriptions is necessary to counter irrational drug-use and ensure people’s access to effective care at reasonable cost.
    Date: 2008

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