nep-cna New Economics Papers
on China
Issue of 2009‒05‒02
six papers chosen by
Zheng Fang
Ohio State University

  1. Ricardo Meets China, India and U.S. Three Hundred Years Later By Yochanan Shachmurove; Uriel Spiegel
  2. The dynamics of spatial agglomeration in China: an empirical assessment By Ana Isabel Moreno-Monroy
  3. Asymmetric Intra-household Allocation of Calories in China: Implication for Demographic Bias and the Need for Demographic Targeting By Shimokawa, Satoru
  4. China's exchange rate policy and Asian trade By Alicia García-Herrero; Tuuli Koivu
  5. Health Human Capital, Height and Wages in China By Wenshu Gao; Russell Smyth
  6. Consumer Preferences for U.S. Pork in Urban China By Ortega, David L.; Wang, H. Holly; Wu, Laping

  1. By: Yochanan Shachmurove (Department of Economics, City College of The City University of New York and The Department of Economics, University of Pennsylvania); Uriel Spiegel (Department of Interdisciplinary Social Studies Bar Ilan University, and Department of Economics, University of Pennsylvania)
    Abstract: As our trading world becomes more globalized, who benefits and who gets hurt? This paper relies on the Ricardian model to explore the effects of technological improvements in underdeveloped countries on the welfare of developed countries. For example, trading between the United States and China, which has undergone a technological improvement in commodities which China imports and exports, may lead to different welfare implications for both countries. The paper models several scenarios to indicate and demonstrate the arguments for and against globalization. The findings suggest that certain policies should be implemented to maintain and enhance the competitiveness of developed countries.
    Keywords: International trade; Ricardian Model; Samuelson; Gainers and losers from trade; East-West trade; North-South Trade; China; India; United States; Outsourcing
    JEL: F0 F1 O O1 O3 D51
    Date: 2009–03–03
  2. By: Ana Isabel Moreno-Monroy (University of Groningen)
    Abstract: In this paper, I complement the application of New Economic Geography "NEG" models for the explanation of wage disparities in China by estimating the Helpman Hason model, which focuses on the role of consumer markets as an attraction force and housing prices as a dispersion force for economic agglomeration. I estimate the structural parameters of the model for 2000 and 2005 and devote special attention to the multiple estimation problems of the Helpman-Hanson equation. I find that the market potential is slightly lower for 2005 than for 2000, as a direct product of a higher value of the elasticity of substitution for the last year. I also find that the share of income spent on manufactures increases between the two periods, and that transport costs decrease. I show how these effects may cause dispersion or agglomeration of economic activity according to the original Helpman (1998) model. An application of income shock experiments on different economic centers across China shows that spatial externalities are not homogeneous across prefectures, so that income shocks may have different effects across the country. Based on these results, I argue that the size of existent agglomerations will increase in the near future, but with marked differences across regions. As China moves to a market economy, prices should reflect more the forces pulling for dispersion, which not only include housing and land prices, but also congestion, pollution and many other problems that come along with urbanization.
    Date: 2008–12
  3. By: Shimokawa, Satoru
    Abstract: This article questions the assumption of symmetric consumption behavior in the conventional analysis of intra-household calorie allocation. It proposes a framework that takes into account asymmetric consumption behavior due to liquidity constraints or loss aversion. Using panel data from China, we find that intra-household calorie allocation responds asymmetrically to expected declines and increases in household food availability, which is qualitatively consistent with the liquidity constraint model. Clarifying such asymmetric responses enables us to relate calorie elasticity estimates to the status of demographic groups within a household without requiring a full interpretation of the ordering of the estimates across demographic groups. Results also show that by ignoring such asymmetric responses, conventional analysis can underestimate demographic differences in calorie elasticity estimates and provide misleading implications about the need for demographic targeting in nutrition programs.
    Keywords: Intra-household Allocation, Nutrition, Calorie, Targeting, China, Agricultural and Food Policy, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, International Development, Research Methods/ Statistical Methods,
    Date: 2009
  4. By: Alicia García-Herrero; Tuuli Koivu
    Abstract: This paper shows empirically that China's trade balance is sensitive to fluctuations in the real effective exchange rate of the renminbi. However, the current size of the trade surplus is such that exchange rate policy alone will probably not be able to address the imbalance. The potential reduction in the trade surplus resulting from an increase in the renminbi exchange rate is limited mainly because Chinese imports do not react as expected to a renminbi appreciation - they tend to fall rather than increase. By estimating bilateral import equations for China and its major trade partners, we find that the reaction for imports is generally confirmed for China's trade with Southeast Asian countries. That result might be attributable to Asia's vertical integration, as a large share of Chinese imports from Southeast Asia are re-exported. We also find that total exports from a number of Asian countries react negatively to a renminbi appreciation, which points to a dependence of Asian countries' exports on those of China.
    Keywords: China, trade, exports, real exchange rate
    Date: 2009–04
  5. By: Wenshu Gao; Russell Smyth
    Abstract: We estimate the returns to height using data from 12 Chinese cities. We present both ordinary least squares (OLS) and two-stage least squares (TSLS) estimates. In the latter height is instrumented using proxies for health human capital accumulated in childhood and adolescence, which influence adult height. The OLS estimates suggest that an additional centimetre of adult height is associated with wages being 1.1 per cent higher for males and 0.9 per cent higher for females. The TSLS estimates suggest each additional centimetre of adult height is associated with wages being 4.8 per cent higher for males and 10.8 per cent for females. The difference reflects the fact that the OLS estimates are predominantly determined by the random genetic factors influencing height, while the TSLS estimates also take into account returns from investment in health human capital during childhood and adolescence. These results imply considerable returns to investment in health human capital.
    Keywords: China, health, height, wages
    JEL: I10 J15 J31 J71
    Date: 2009–04
  6. By: Ortega, David L.; Wang, H. Holly; Wu, Laping
    Abstract: Chinaâs transition into a developed economy is driving changes in consumer preferences and demand for foods. To evaluate consumer preferences for U.S. pork in urban China, primary data were collected in two metropolitan areas- Beijing and Shanghai. Estimated logit models revealed that an individualâs age, shopping location and food safety concerns significantly influenced their willingness-to-pay for U.S. pork. A proportional linear model was developed to evaluate factors affecting purchasing behavior of western-style pork cuts vs. traditional Chinese cuts. Food safety concerns were linked to a previous lean-meat additive scare and a lack of consumer confidence on the Chinese food inspection system.
    Keywords: China, U.S. Pork, Willingness-to-pay, Ordered Logit, food safety, Agricultural and Food Policy, Consumer/Household Economics, Marketing, D120, D190, M390, Q130, Q180,
    Date: 2009

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