nep-cna New Economics Papers
on China
Issue of 2014‒12‒19
ten papers chosen by
Zheng Fang
Ohio State University

  1. Has China’s Domestic Food Price Become More Stable? An Investigation Based on a Structural Break Regime Switching Model By LU, Jie; Tang, Zhong; Lin, Yujie; Zhu, Xinkai; Liu, Wenyong
  2. Grain Subsidy, Liquidity Constraints and Food security—Impact of the Grain Subsidy Program on the Grain-Sown Areas in China By Yi, Fujin; Sun, Dingqiang
  3. Energy poverty and solid fuels use in rural China: Analysis based on national population census By Xin Tang; Hua Liao
  4. The Local Government Crisis 2007-2014: When China's Financial Management Faltered By Leo F. Goodstadt
  5. Employment policy implementation mechanisms in China By Zeng, Xiangquan
  6. Supplemental Nutrition Assistance Program and Food Insecurity among Families with Children By Zhang, Jun; Yen, Steven
  7. Assessing the Design of Three Pilot Programs for Carbon Trading in China By Munnings, Clayton; Morgenstern, Richard; Wang, Zhongmin; Liu, Xu
  8. Asiaphoria Meets Regression to the Mean By Lant Pritchett; Lawrence H. Summers
  9. "As Rare as a Panda": How Facial Attractiveness, Gender, and Occupation Affect Interview Callbacks at Chinese Firms By Maurer-Fazio, Margaret; Lei, Lei
  10. Monetary Policy Effectiveness in China: Evidence from a FAVAR Model By John Fernald; Mark M. Spiegel; Eric T. Swanson

  1. By: LU, Jie; Tang, Zhong; Lin, Yujie; Zhu, Xinkai; Liu, Wenyong
    Abstract: The stability of grain prices relates closely to the development of China’s economy, social stability and quality of Chinese people’s life. However, with the gradual openness of China’s grain market and series of newly-issued China’s grain policies, the volatility characteristics of China’s grain price may experience some structural changes and whether it becomes more stable still remains controversial. In this paper, we investigate the fluctuation characteristics of some main grain prices during the past two decades by using Structural Break Regime Switching Model and the Structural Break Model. We find that China’s grain price has become more stable since 2004 with narrowing low and high growth regimes. The implementation of Minimum Purchasing Price Policy and the semi-separation of domestic and international grain markets may explain part of the reasons for the stabilization.
    Keywords: Agricultural and Food Policy,
    Date: 2014
  2. By: Yi, Fujin; Sun, Dingqiang
    Abstract: This study examined the effects of China’s grain subsidy program, the largest food self-sufficiency project in the developing countries, on grain-sown areas within a context of liquidity constraints. A large household level panel was used to evaluate how the subsidy affects the cultivation schedule of farm households through the relaxation of households’ liquidity con¬straints. Results suggest that in general, the grain subsidy program significantly improved farm households’ grain planting areas for liquidity-constrained households. This finding provides a more comprehensive understanding of the effects of China’s grain subsidy than previous studies
    Keywords: China grain subsidy, liquidity constraint, food security, land use, Agricultural and Food Policy, Crop Production/Industries, Food Security and Poverty, Land Economics/Use,
    Date: 2014
  3. By: Xin Tang; Hua Liao
    Abstract: China has basically achieved ubiquity of electricity access in rural areas during the latest three decades. However, solid fuels are still widely used in the rural areas, which is currently the main issue impinging upon energy poverty in China. There about 490 million rural residents in China using solid fuels for cooking. Based on national population census data, this research evaluates the current situation and long-term trend of solid fuel use for cooking in rural China. Firstly, over three-fourths of all rural households depend on solid fuels to meet their cooking demand, whilst in urban area and township this figure is as low as 8 % and 36 % respectively. Secondly, solid fuel use was linked closely to rural household income, i.e., those regions with low per capita household income use more solid fuel. Furthermore, rural households using solid fuel declined by 17 percent from 2000 to 2010, albeit with some significant regional differences. Finally, the proportion of rural residents using clean fuels remained low, and the proportion using gas remained nearly constant over last 10 years in many provinces. Improving access to affordable and reliable energy services for cooking remains a great challenge China need to address.
    Keywords: Energy Poverty, Solid Fuels, Cooking, Population Census, Rural Households, China
    JEL: Q40
    Date: 2014–05
  4. By: Leo F. Goodstadt (Hong Kong Institute for Monetary Research and Hong Kong Institute for the Humanities and Social Sciences and University of Dublin)
    Abstract: This paper investigates why China's leaders were unable to halt the mounting crisis in funding local government from 2009. The analysis traces a long history of co-option of the banking system by local officials. The national leadership was obstructed in monitoring and controlling the escalating dependence on banks to fund local administrations because of a long-standing failure to reform key legal, fiscal and administrative systems. The ideological reluctance to implement reforms in land ownership fostered an unauthorised and often unlawful symbiosis between local officials, property developers and bank executives. The paper argues that the Government's plans for restructuring local government finances through the use of bond flotations in particular will face considerable delay.
    Keywords: China, Local Government, Banking, Financial Crisis, Land Ownership, Reforms
    Date: 2014–10
  5. By: Zeng, Xiangquan
    Abstract: The paper discusses the NEPs implementation mechanism in China.
    Keywords: employment policy, promotion of employment, national plan, public finance, evaluation, China, politique de l'emploi, promotion de l'emploi, plan national, finances publiques, évaluation, Chine, política de empleo, fomento del empleo, plan nacional, hacienda pública, evaluación, China
    Date: 2014
  6. By: Zhang, Jun; Yen, Steven
    Abstract: The roles of Supplemental Nutrition Assistance Program (SNAP) and parental resources in household food insecurity are investigated with a endogenous ordered probability model. Data for husband-wife families with children from the 2010 and 2011 Current Population Survey are used. SNAP participation is found to reduce the probability of household food insecurity among adults by 8.8%,increases the probability of being low food security among children by 6.1%,and increases the probability of being very low food security among children by 2.7%.Parental resource and socio-demographic variables also play important roles in determining SNAP participation and household food insecurity.
    Keywords: Household food insecurity, SNAP participation, husband-wife households with children, ordered probability model, Agricultural and Food Policy, Food Security and Poverty, I12, I38, C31,
    Date: 2014–05–02
  7. By: Munnings, Clayton (Resources for the Future); Morgenstern, Richard (Resources for the Future); Wang, Zhongmin (Resources for the Future); Liu, Xu
    Abstract: China started seven carbon cap-and-trade pilot programs in order to inform the development of a future national cap-and-trade market. This paper assesses the design of three of the longer-running cap-and-trade pilot programs in Guangdong, Shanghai and Shenzhen. Based on extensive stakeholder interviews and a detailed literature review we formulate a series of recommendations to improve the design of these three pilots, including: strengthening the legal foundations for the cap-and-trade pilots, incorporating achievement of goals established by the cap-and-trade pilots into the performance reviews of participating government officials and executives of state-owned entities, further clarifying the cap-setting process, increasing the transparency of the cap, reducing or eliminating within-compliance period adjustments to enterprise-level allowance allocation, gradually moving away from free allocation toward auctioning, reforming enforcement policy, and adopting a symmetric safety valve to manage prices. By making these recommendations, we hope to shed light on ways that Chinese regulators might adapt cap and trade, a fundamentally market-based tool, to China's economy that has many non-market features.
    Keywords: emissions trading, carbon, China
    JEL: Q48 Q54 Q58
    Date: 2014–10–16
  8. By: Lant Pritchett; Lawrence H. Summers
    Abstract: Consensus forecasts for the global economy over the medium and long term predict the world's economic gravity will substantially shift towards Asia and especially towards the Asian Giants, China and India. While such forecasts may pan out, there are substantial reasons that China and India may grow much less rapidly than is currently anticipated. Most importantly, history teaches that abnormally rapid growth is rarely persistent, even though economic forecasts invariably extrapolate recent growth. Indeed, regression to the mean is the empirically most salient feature of economic growth. It is far more robust in the data than, say, the much-discussed middle-income trap. Furthermore, statistical analysis of growth reveals that in developing countries, episodes of rapid growth are frequently punctuated by discontinuous drop-offs in growth. Such discontinuities account for a large fraction of the variation in growth rates. We suggest that salient characteristics of China--high levels of state control and corruption along with high measures of authoritarian rule--make a discontinuous decline in growth even more likely than general experience would suggest. China's growth record in the past 35 years has been remarkable, and nothing in our analysis suggests that a sharp slowdown is inevitable. Still, our analysis suggests that forecasters and planners looking at China would do well to contemplate a much wider range of outcomes than are typically considered.
    JEL: E0 E6 F01 O4 O53
    Date: 2014–10
  9. By: Maurer-Fazio, Margaret (Bates College); Lei, Lei (Liberty Mutual Insurance)
    Abstract: This study explores how both gender and facial attractiveness affect job candidates' chances of obtaining interviews in China's dynamic Internet job board labor market. It examines how discrimination based on these attributes varies over occupation, location, and firms' ownership type and size. We employ a resume (correspondence) audit methodology. We establish the facial attractiveness of candidate photos via an online survey. 24,192 applications are submitted to 12,096 job postings across four occupations in 6 Chinese cities. We find sizable differences in the interview callback rates of attractive and unattractive job candidates. Job candidates with unattractive faces need to put in 33% more applications than their attractive counterparts to obtain the same number of interview callbacks. Women are preferred to men in three of our four occupations. Women on average need to put in only 91% as many applications as men to obtain the same number of interview callbacks.
    Keywords: beauty, gender, field experiments, discrimination, Chinese firms, hiring, facial attractiveness, internet job boards, resume correspondence audit study
    JEL: C93 J71 J23 O53
    Date: 2014–10
  10. By: John Fernald; Mark M. Spiegel; Eric T. Swanson
    Abstract: We use a broad set of Chinese economic indicators and a dynamic factor model framework to estimate Chinese economic activity and inflation as latent variables. We incorporate these latent variables into a factor-augmented vector autoregression (FAVAR) to estimate the effects of Chinese monetary policy on the Chinese economy. A FAVAR approach is particularly well-suited to this analysis due to concerns about Chinese data quality, a lack of a long history for many series, and the rapid institutional and structural changes that China has undergone. We find that increases in bank reserve requirements reduce economic activity and inflation, consistent with previous studies. In contrast to much of the literature, however, we find that central-bank-determined changes in Chinese interest rates also have substantial impacts on economic activity and inflation, while other measures of changes in credit conditions, such as shocks to M2 or lending levels, do not once other policy variables are taken into account. Overall, our results indicate that the monetary policy transmission channels in China have moved closer to those of Western market economies.
    JEL: C38 E43 E52
    Date: 2014–09

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.