nep-cna New Economics Papers
on China
Issue of 2014‒08‒02
two papers chosen by
Zheng Fang
Ohio State University

  1. Gone for Good? Subsidies with Export Share Requirements in China: 2002-2013 By Fabrice Defever; Alejandro Riaño
  2. China's economic embrace of Africa: An international comparative perspective By Broich T.; Szirmai A.

  1. By: Fabrice Defever; Alejandro Riaño
    Abstract: This paper presents a simple model of subsidies with export share requirements (ESR) in a heterogeneous firm environment. A two-country general equilibrium version of the model with a single 100% ESR is calibrated using firm-level data from the 2002 wave of the Business Environment and Enterprise Performance Survey collected by the World Bank for China. The calibrated model is used to gauge the change in subsidies with ESR that is consistent with the fall in the share of 'pure exporters', firms exporting all their output, observed in China, from 25.7% in 2002 to 11.1% in 2013. Our results indicate that a 6.9% reduction in the ad-valorem subsidy rate available to firms that export all their output is consistent with the observed fall in their share of exporting firms. Expenditure in subsidies (as a share of value-added) falls by 66% and welfare in China increases by 1.76% while real income in the rest of the world falls by 0.59%.
    Keywords: Trade Policy, Export Subsidies, Export Share Requirements, China
    JEL: F12 F13 O47
    Date: 2014–07
  2. By: Broich T.; Szirmai A. (UNU-MERIT)
    Abstract: This paper discusses the entry of China into the game of foreign finance in Africa. It analyses the scope, destination and sectoral distribution of Chinese financial flows and trade in comparison with Western patterns and trends of aid, foreign direct investment FDI and trade. Chinas foreign aid and manufacturing investment flow to Africas physical infrastructure and productive sectors of agriculture and manufacturing fill the vacuum which emerged when Western financial flows shifted to other sectors and activities. In contrast, Chinas trade patterns with Africa highly resemble those of Africas leading Western trading partners. Africa imports manufactured goods and exports primary goods. Differences in relative factor endowments of labour, capital and natural resources are largely responsible for the pattern of Sino-African trade.
    Keywords: Trade: General; International Investment; Long-term Capital Movements; Foreign Aid; International Relations and International Political Economy: General; International Linkages to Development; Role of International Organizations; Economywide Country Studies: Asia including Middle East; Economywide Country Studies: Africa;
    JEL: F10 F21 F35 F50 O19 O53 O55
    Date: 2014

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