nep-cna New Economics Papers
on China
Issue of 2008‒10‒28
five papers chosen by
Zheng Fang
Ohio State University

  1. Class Origin, Family Culture, and Intergenerational Correlation of Education in Rural China By Hiroshi Sato; Li Shi
  2. The Chinese Meaning of Just War and Its Impact on the Foreign Policy of the People’s Republic of China By Nadine Godehardt
  3. China's New Labour Contract Law:No Harm to Employment? By Yu-Fu Chen; Michael Funke
  4. The US-China Trade Conflict: A Game Theoretical Analysis By Hebatallah Ghoneim; Yasmine Reda
  5. How Do Heterogeneous Social Interactions Affect the Peer Effect in Rural-Urban Migration?: Empirical Evidence from China By Zhao Chen; Shiqing Jiang; Ming Lu; Hiroshi Sato

  1. By: Hiroshi Sato; Li Shi
    Abstract: This paper examines the intergenerational correlation of education in rural China. The focus is on the influence of family class origin (jiating chengfen), the political label hung on every family throughout the Maoist era. A nationally representative cross-sectional household survey for 2002 is used. It is shown that the effects of family class origin on family members' educational attainment varies across historical periods. Regarding the educational level of male heads of household with landlord/rich peasant background, we found a drop caused by the class-based discrimination in the Maoist era and a rebound in the postreform era. It was also found that family class origin remains significant for the educational achievement of the current younger generation. Children aged 16-18 who are of landlord/rich peasant and middle peasant origins are more likely to achieve higher educational attainment. We conclude that a class-specific, education-oriented family culture has been shaped first as a mixture of family cultural capital inherited from the pre-Maoist era and surfacing again in the postreform era, and, second, as intergenerational cultural reaction against class-based discrimination during the Maoist era.
    Keywords: education, intergenerational correlation, class origin, family culture, social discrimination
    JEL: D31 J24 N35 O15
    Date: 2008–10
  2. By: Nadine Godehardt (GIGA German Institute of Global and Area Studies)
    Abstract: The image of China’s peaceful rise, which the Chinese government is keen to enforce in the world, stands in contrast to the view of China’s ascent as a threat. China’s economic and military growth is perceived as a potential threat to the (East) Asian security structure and as a challenge to the preponderance of the United States. Even though the PRC is more active in international and regional organizations—and better integrated in the international community—than ever before, the ambiguity of China’s true political intentions is still dominant. The focus of this analysis is the Chinese tradition of Just War and its benefits for an enhanced understanding of contemporary Chinese foreign policy. The tradition of Just War has rarely been studied, but the search for an understanding of Just War in Chinese traditional thinking can, nevertheless, assist in the analysis of China’s current foreign policy. Whether China’s foreign policy is benign or malignant or whether China dominates Asia is, therefore, “profoundly uncertain.” With regard to foreign policy analysis, the differentiation between the regional and the international levels might help to transcend the predominant understanding of Chinese foreign policy in international relations theory.
    Keywords: China’s foreign policy, Just War theory, Confucianism, harmonious world
    Date: 2008–09
  3. By: Yu-Fu Chen; Michael Funke
    Abstract: In January 2008, China imposed a new labour contract law. This new law is the most significant reform to the law of employment relations in mainland China in more than a decade. The paper provides a theoretical framework on the inter-linkages between labour market regulation, option value and the choice and timing of employment. All in all, the paper demonstrates that the Labour Contract Law in it´s own right will have only small impacts upon employment in the fast-growing Chinese economy. On the contrary, induced increasing unit labour costs represent the real issue and may reduce employment.
    Keywords: China, Labour Contract Law, Real Options, Employment
    JEL: C61 D81 D92 J23
    Date: 2008–10
  4. By: Hebatallah Ghoneim (Faculty of Management Technology, The German University in Cairo); Yasmine Reda (Faculty of Management Technology, The German University in Cairo)
    Abstract: Game Theory has been gaining great importance in Economics, encouraging research in many theoretical and applied fields. This paper relies on simple game theory tools to set up a major international trade dispute. Using the backward deduction approach, the strategies of the United States and China in their recent trade conflict are analyzed.
    Keywords: Trade Conflict, Exchange Rate Policy, Game Theory
    JEL: F51 C7
    Date: 2008–10
  5. By: Zhao Chen; Shiqing Jiang; Ming Lu; Hiroshi Sato
    Abstract: In this paper, we use the "2002 Chinese Household Income Project Survey" (CHIP2002) data to examine how heterogeneous social interactions affect the peer effect in the rural-urban migration decision in China. We find that the peer effect, measured by the village migration ratio, significantly increases the individual probability of outward migration. We also find that the magnitude of the peer effect is nonlinear, depending on the strength and type of social interactions with other villagers. Interactions in information sharing can increase the magnitude of the peer effect, while interactions in mutual help in labor activities, such as help in housing construction, nursing and farm work in busy seasons, will impede the positive role of the peer effect. Being aware of the simultaneity bias caused by the two-way causality between social interaction strengths and migration, we utilize "historical family political identity in land reform" as an instrumental variable for social interactions. However, the hypothesis that probit and instrumental-variable probit results are not significantly different is not rejected. The existence of a nonlinear peer effect has rich policy implications. For policy makers to encourage rural-urban migration, it is feasible to increase education investment in rural areas or increase information sharing among rural residents. However, only an increase in the constant term in the regression, i.e., a "big push" in improving institutions for migration, can help rural Chinese residents escape the low equilibrium in migration.
    Keywords: labor migration, urbanization, peer effect, social interaction, social multiplier
    JEL: J61 O15 R23
    Date: 2008–10

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