nep-cna New Economics Papers
on China
Issue of 2009‒03‒14
seven papers chosen by
Zheng Fang
Ohio State University

  1. Is there an incipient turnaround in Asia's"missing girls"phenomenon ? By Das Gupta, Monica; Chung, Woojin; Shuzhuo, Li
  2. Does fast Growth in India and China harm U.S. Workers? Insights from Simulation Evidence By Alex Izurieta; Ajit Singh
  3. Access to Higher Education and Inequality: The Chinese Experiment By Wang, Xiaojun; Fleisher, Belton M.; Li, Haizheng; Li, Shi
  4. China’s Energy Economy: A Survey of the Literature By Hengyun Ma; Les Oxley
  5. Agglomeration economies and the location of Taiwanese investment in China By Chen, George Shih-Ku
  6. The impact of a common currency on East Asian production networks and China's exports behvior By Rahman, Mizanur
  7. Linkages between Shanghai and Hong Kong stock indices By David Peel; Ivan Paya; Shenqiu Zhang

  1. By: Das Gupta, Monica; Chung, Woojin; Shuzhuo, Li
    Abstract: The apparently inexorable rise in the proportion of"missing girls"in much of East and South Asia has attracted much attention amongst researchers and policy-makers. An encouraging trend was suggested by the case of South Korea, where child sex ratios were the highest in Asia but peaked in the mid-1990s and normalized thereafter. Using census data, we examine whether similar trends have begun to manifest themselves in the two large populous countries of this region, China and India. The data indicate that child sex ratios are peaking in these countries, and in many sub-national regions are beginning to trend towards less masculinization. This suggests that, with continuing vigorous efforts to reduce son preference, the"missing girls"phenomenon could be addressed in Asia.
    Keywords: Population Policies,Gender and Law,Gender and Health,Adolescent Health,Disease Control&Prevention
    Date: 2009–02–01
  2. By: Alex Izurieta; Ajit Singh
    Abstract: A major political and policy issue today is whether globalisation and rapid economic growth in India and China would have an adverse affect on labour markets in the U.S. and other advanced countries. Some leading economists have argued that even though the recent integration of India and China with the liberalised global economy has not so far had a serious negative impact on wages and employment in advanced countries, it is most likely to do so in the future in view of the growing technological and scientific capabilities in the two developing countries. This is also because it is suggested that this integration represents a sudden doubling of the world labour force without a concomitant increase in capital. The present paper argues against this plausible thesis, essentially on two grounds: (a) it does not take into account the demand side effects of fast growth in India and China; and (b) it abstracts from the dynamism of the U.S. real economy and its innovative large corporations. However, simulations of different scenarios on the CAM world econometric model indicate that at a disaggregated level there are severe supply side constraints on energy, raw materials and food which thwart the expansionary demand side effects of fast growth in India and China.
    Keywords: Globalisation; China and India; Simulation; U.S. Workers; Economic integration
    JEL: J20 J21 F01
    Date: 2008–12
  3. By: Wang, Xiaojun (University of Hawaii at Manoa); Fleisher, Belton M. (Ohio State University); Li, Haizheng (Georgia Tech); Li, Shi (Beijing Normal University)
    Abstract: We apply a semi-parametric latent variable model to estimate selection and sorting effects on the evolution of private returns to schooling for college graduates during China's reform between 1988 and 2002. We find that there were substantial sorting gains under the traditional system, but they have decreased drastically and are negligible in the most recent data. We take this as evidence of growing influence of private financial constraints on decisions to attend college as tuition costs have risen and the relative importance of government subsidies has declined. The main policy implication of our results is that labor and education reform without concomitant capital market reform and government support for the financially disadvantaged exacerbates increases in inequality inherent in elimination of the traditional "wage-grid."
    Keywords: return to schooling, selection bias, sorting gains, heterogeneity, financial constraints, comparative advantage, China
    JEL: J31 J24 O15
    Date: 2009–02
  4. By: Hengyun Ma; Les Oxley (University of Canterbury)
    Abstract: This paper reviews literature on China’s energy economics, focusing especially on: i) the relationship between energy consumption and economic growth, ii) China’s changing energy intensity, iii) energy demand and energy -capital and -labor substitution, iv) the emergence of energy markets in China, vi) and policy reforms in the energy industry. After reviewing the literature, the study presents the main findings and suggests some topics for further study.
    Keywords: China; Energy; Literature
    JEL: D24 O33 Q41
    Date: 2009–02–16
  5. By: Chen, George Shih-Ku
    Abstract: We investigate the effect of agglomeration economies on Taiwanese greenfield investors' location choice in China from 1996 to 2005. Using a nested logit model, we find that Taiwanese investors first select a region in China where he or she wants to invest, before selecting the best province within that region. Furthermore, we find evidence that, since 2000, market access, industrial linkages and monitoring costs have become important agglomeration forces driving Taiwanese investors' location choice in China. Finally, we discover that the nature of agglomeration economies varies extensively for Taiwanese investors across different industries. Taken together, these findings suggest that the Chinese government must formulate region-wide development strategies and industry-specific policies if it wants to attract more Taiwanese investment in the near future.
    Keywords: Agglomeration economies; China; Nested logit model; Taiwanese investment
    JEL: F23
    Date: 2009–01–05
  6. By: Rahman, Mizanur
    Abstract: Vertical fragmentation of product value chain across borders is the driving force of growing economic interdependency in East Asia. A common currency, not flexible exchange rates between national currencies, would reduce flexibility in relative prices within East Asia. Its impact would be far greater for exports that have stronger production network linkage. In order to test the hypothesis, the paper estimates the effect of a common currency on China’s processing and ordinary exports separately. The distinction is necessary because the processing exports, unlike the ordinary exports, are produced along the regional production networks, with final stages of assembly and exporting being increasingly concentrated in China. The short-run dynamics indicate that the effect on China’s processing exports is more than double the corresponding effect on China’s ordinary exports. The long-run effect on the processing exports of intra-regional RER flexibility, which is otherwise the lack of a regional currency, is almost nine times as large as the long-run effect of a unilateral RMB appreciation. By contrast, the corresponding long-run effect is statistically insignificant for the case of ordinary exports that are produced primarily by using local inputs. The long-run coefficient of this intra-regional RER flexibility implies that the actual volume of processing exports is 20 percent below the potential. The magnitudes of these effects are consistent with the hypothesis that a common currency would further integrate East Asian production networks and promote regional economic integration.
    Keywords: Production networks; fragmentation of value chain; optimum currency area; common currency; exchange rate flexibility; China
    JEL: F15 F42 F32 F14 F33 C33
    Date: 2008–03–17
  7. By: David Peel; Ivan Paya; Shenqiu Zhang
    Abstract: This paper examines the dynamics of the linkages between Shang- hai and Hong Kong stock indices. While the volatility linkage is anal- ysed by a multivariate GARCH framework, the linkage of returns is examined using a copula approach. Eight different copula functions are applied in this study including two time-varying copulas which capture the time varying process of the linkage. The results show sig- nificant tail dependence of the returns in the two markets.
    Date: 2009

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