nep-cna New Economics Papers
on China
Issue of 2014‒08‒28
five papers chosen by
Zheng Fang
Ohio State University

  1. Measuring Value Added in the People’s Republic of China’s Exports: A Direct Approach By Xing, Yuqing
  2. Differences in the Determinants and Targeting of Antidumping: China and India Compared By Ning Meng; Chris Milner; Huasheng Song
  3. China’s African financial engagement, real exchange rates and trade between China and Africa By Sylviane GUILLAUMONT JEANNENEY; Ping HUA
  4. Is China's Property Market Heading toward Collapse? By Li-Gang Liu
  5. Self-employment Choices of Rural Migrants in China: Distance and Social Network By Zhou, Yexin; Chen, Mo; Ye, Jingyi

  1. By: Xing, Yuqing (Asian Development Bank Institute)
    Abstract: We apply a direct approach to estimate domestic value added embedded in the People’s Republic of China’s (PRC) exports. The estimates suggest that the domestic value added of processing exports and processing high-tech exports gradually increased from 30% and 25%, to 44% and 45%, respectively, between 1997 and 2012. On the other hand, the domestic content of processing exports with supplied materials fell to 14% from the peak of 35%. In 2012, the domestic value added of the PRC’s total exports remained below 77%. Our estimates prove to be the upper limits of the corresponding trade in value added. Compared to our estimates, the Organisation for Economic Co-operation and Development’s Trade in Value Added database (TiVA) significantly overestimates the domestic content of the PRC’s exports. TiVA’s estimates are also inconsistent with the fact that the share of processing exports in the PRC’s total exports has decreased steadily. In addition, we show that the PRC’s processing exports demonstrate significant heterogeneity across its trading partners; processing exports account for a large portion of total exports to high income countries but a relatively small portion of exports to low income countries. This heterogeneity implies that the domestic content of the PRC’s exports varies significantly by destination.
    Keywords: People’s Republic of China; trade in value added; domestic value added
    JEL: F10
    Date: 2014–08–08
  2. By: Ning Meng; Chris Milner; Huasheng Song
    Abstract: Despite both being developing countries, China and India have markedly contrasting patterns in their use and targeting of antidumping (AD) measures. We explore the factors driving AD use by these two countries, considering in turn macroeconomic, strategic and other determinants. We find more regular or systematic features of AD use by China, while India displays a less systematic pattern of AD use. Economic growth, tariff protection and FTA participation are shown to constrain AD use by China. Compared to India, AD use by China is also more sensitive to international conditions. Furthermore, China targets developed countries more than developing countries, while India is less discriminating with respect to the country type it targets.
    Keywords: China; India; antidumping JEL classification: F1; F5
    Date: 2014
  3. By: Sylviane GUILLAUMONT JEANNENEY (Université d'Auvergne); Ping HUA (FERDI)
    Abstract: In the last decade China’s trade with Africa increased faster than its overall foreign trade. This paper focuses on the role of real exchange rates in this growth. A “bilateral real exchange rate” augmented trade gravity model applied to China’s trade with 49 African countries over the period 2000 to 2011 shows that the real appreciation of most African currencies relative to the renminbi favoured China’s exports to these countries, but had no impact on China’s imports from Africa. This real appreciation of African currencies is explained by three main factors: 1) the decision to peg them to other currencies (in particular to the euro), 2) the amount of export of raw materials from African countries, and 3) the amount of financial assistance from international donors including China. Thus, a kind of detrimental sequence exists in Africa’s relationship with China: China’s imports of raw materials and its economic cooperation are among the factors explaining the appreciation of African real exchange rates, which itself stimulates China’s exports of manufactured goods, and so restricts Africa’s own industrial development.
    JEL: F12 F14 F31 F35
    Date: 2014–08
  4. By: Li-Gang Liu (Peterson Institute for International Economics)
    Abstract: China's property market has slowed more than expected since the first half of 2014, leading many commentators to believe this could trigger a hard landing of the Chinese economy, even a financial crisis. However, China's nascent property market is experiencing another cyclical turn. The authorities can still use many policy instruments to avoid a major market downturn or collapse. In the short run, the government could simply phase out property curb policies imposed on some 46 largest cities in China and accelerate hukou reform. In the medium term, the government could reintroduce a public housing scheme to take care of low-income household needs. The public housing program could be funded partially by levying a property tax. Meanwhile, the maturity mismatch of the mortgage portfolio in the banking system could also be better managed by allowing banks to issue covered bonds. The authorities could encourage the development of real estate investment trusts to diversify funding sources of developers. This financial instrument will not only reduce the banking industry's exposure to the real estate market but also reduce funding costs for developers to ensure adequate supply of both commercial and residential properties. Therefore, it is premature to compare the Chinese property market now with the Japanese property bubble collapse in the early 1990s or the US housing market collapse in 2008. China's continuing urbanization, available policy options, and the stage of its property market development all suggest that China's property market is experiencing simply another cyclical adjustment. Indeed, the current slowdown could catalyze the phase-out of outdated and irrelevant policies and accelerate necessary institutional developments in China's property market.
    Date: 2014–08
  5. By: Zhou, Yexin (Stockholm China Economic Research Institute); Chen, Mo; Ye, Jingyi
    Abstract: In Chinese cities, rural migrants on average are less educated and poorer than the urban locals. Migration is costly, especially for those who choose to move to provinces faraway from their hometowns. A larger fraction of the rural migrants are self-employed than that of the urban locals. The social contacts of migrants in the host cities often help them to find jobs or to start businesses. We studied the choice of self-employment of rural migrants in Beijing, using a migrant dataset collected from 2007 to 2012. The result shows that the self-employed rural migrants in Beijing tend to be females, migrating from faraway provinces, with more social contacts, and either having the highest education or the lowest. Education and social capital are positively correlated with earning for both wage-earners and self-employed, with different magnitudes. We use a search model to explain this.
    Keywords: Self-employmen; Rural Migrants; Social Network
    JEL: J61 R23 Z13
    Date: 2014–08–20

This nep-cna issue is ©2014 by Zheng Fang. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.