nep-cna New Economics Papers
on China
Issue of 2015‒05‒02
25 papers chosen by
Zheng Fang
Ohio State University

  1. Anti-Comparative Advantage: A Puzzle in U.S.-China Bilateral Trade By Jiandong Ju; Ziru Wei; Hong Ma
  2. An Adaptive Approach to Forecasting Three Key Macroeconomic Variables for Transitional China By Linlin Niu; Xiu Xu; Ying Chen;
  3. The Value of Political Ties versus Market Credibility: Evidence from Corporate Scandals in China By T.J. Wong; Mingyi Hung; Fang Zhang
  4. A lesson in market contestability : calculating the cost of Chinese state intervention in iron ore price negotiations By Luke Hurst
  5. Demystifying the Chinese Housing Boom By Hanming Fang; Quanlin Gu; Wei Xiong; Li-An Zhou
  6. Magnet High Schools and Academic Performance in China: A Regression Discontinuity Design By Albert Park; Xinzheng Shi; Xuehui An
  7. China’s road to a global scientific powerhouse By Dabo Guan; David M. Reiner; Zhu Liu
  8. Promotion Incentives in the Public Sector: Evidence from Chinese Schools By Albert Park; Naureen Karachiwalla
  9. Preference for Redistribution and Inequality Perception in China: Evidence from the CGSS 2006 By Zhou Xun
  10. Corporate Philanthropy in China: A Case of Doing Well by Doing Good? By Zhong Qin; Minghuan Huang; Wenli Cheng
  11. Trade policy and industrial policy in China: What motivates public authorities to apply restrictions on exports? By Stéphanie Monjon; Julien Gourdon; Sandra Poncet
  12. Global Technology Leadership: The Case of China By Naubahar Sharif
  13. Investment Liberalisation, Technology Take-off and Export Market Entry: Does Foreign Ownership Structure Matter? By Girma, Sourafel; Gong, Yundan; Görg, Holger; Lancheros, Sandra
  14. Relative Earnings and Firm Performance: Evidence from Publicly-listed Firms in China, 2005-2012 By Peiwen Bai; Wenli Cheng
  15. Can Conditional Grants Attract Better Students: Evidence from Chinese Normal Universities By Li Han; Jiaxin Xie
  16. The Impact of the Chinese Exchange Policy on Foreign Trade with the European Union By Ana Cardoso; António Portugal Duarte
  17. The Effect of Air Pollution on Mortality in China: Evidence from the 2008 Beijing Olympic Games By Guojun He; Maoyong Fan; Maigeng Zhou
  18. Firm-level Productivity Spillovers in China's Chemical Industry: A Spatial Hausman-Taylor Approach By Badi H. Baltagi; Peter H. Egger; Michaela Kesina
  19. Accounting for the Sources of Growth in the Chinese Economy By Harry WU
  20. Accounting for Labor Misallocation in China with Provincial Data 1980-2010 By Peiwen Bai; Wenli Cheng
  21. Credit Constraints, Quality, and Export Prices: Theory and Evidence from China By Haichao Fan; Yao Amber Li
  22. Permanent Income and Subjective Well-Being By Albert Park; Shu Cai
  23. The emission reduction effect and economic impact of an energy tax vs. a carbon tax in China : a dynamic CGE model analysis By Zou, Lele; Xue, Jinjun; Fox, Alan; Meng, Bo; Shibata, Tsubasa
  24. Testing the performance of technical trading rules in the Chinese market By Shan Wang; Zhi-Qiang Jiang; Sai-Ping Li; Wei-Xing Zhou
  25. Regional Linkages and Global Policy Alignment: The Case of China–Southeast Asia Relations By Pascal Abb; Georg Strüver

  1. By: Jiandong Ju (Shanghai University of Finance and Economics and Tsinghua University and Hong Kong Institute for Monetary Research); Ziru Wei (Tsinghua University); Hong Ma (Tsinghua University)
    Abstract: From 1992 to 2011, the total trade volume between the U.S. and China increased by 25 times, and China's share in U.S. total imports increased from 5% to 20%. However, the U.S.'s share in China's total imports dropped from 11% to 8% in the same period. In the major categories of U.S. exports to China, Waste & Scrap increased from 744 million dollars in 2000 to 7,562 million dollars in 2008, rising 916% times and becoming the No.1 product that the U.S exports to China. It is important to understand what explains these structural changes, and to ask whether the principle of comparative advantage determines the structure of U.S.-China bilateral trade. Interestingly, we find an "Anti-Comparative Advantage" puzzle: the U.S. exports less to China in sectors where it has greater comparative advantage, while China exports more to the U.S. in its sectors with greater comparative advantage. To further study this issue, we extend Eaton-Kortum model of bilateral trade to multiple sectors and test it empirically using US and China trade data. We find that after controlling for the importer's demand, trade costs and factor intensities, etc., comparative advantage cannot explain U.S.-China bilateral trade flows. The puzzle survives various robustness checks.
    JEL: F11 F14 F15
    Date: 2015–04
  2. By: Linlin Niu; Xiu Xu; Ying Chen;
    Abstract: We propose the use of a local autoregressive (LAR) model for adaptive estimation and forecasting of three of China’s key macroeconomic variables: GDP growth, inflation and the 7-day interbank lending rate. The approach takes into account possible structural changes in the data-generating process to select a local homogeneous interval for model estimation, and is particularly well-suited to a transition economy experiencing ongoing shifts in policy and structural adjustment. Our results indicate that the proposed method outperforms alternative models and forecast methods, especially for forecast horizons of 3 to 12 months. Our 1-quarter ahead adaptive forecasts even match the performance of the well-known CMRC Langrun survey forecast. The selected homogeneous intervals indicate gradual changes in growth of industrial production driven by constant evolution of the real economy in China, as well as abrupt changes in interestrate and inflation dynamics that capture monetary policy shifts.
    Keywords: Chinese economy, local parametric models, forecasting
    JEL: E43 E47
    Date: 2015–04
  3. By: T.J. Wong (Department of Accounting, The Chinese University of Hong Kong); Mingyi Hung (Department of Accounting, Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology); Fang Zhang (Department of Accounting, Hong Kong Baptist University)
    Abstract: This paper compares the value of political ties and market credibility in China by examining the consequence of corporate scandals. We categorize Chinese corporate scandals by whether the scandal is primarily associated with the destruction of i) the firm’s political networks (political scandals), ii) the firm’s market credibility (market scandals), or iii) both (mixed scandals). Consistent with our hypothesis that scandals signaling the destruction of political ties are associated with greater losses in firm value than scandals signaling the destruction of market credibility, we find that the stock market reacts more negatively to political and mixed scandals than to market scandals. In addition, the greater negative market reactions associated with political and mixed scandals are primarily driven by firms that rely more on political networks. We also find that, compared to market scandals, political and mixed scandals lead to larger decreases in operating performance, greater reduction in loans from state-owned banks, and higher departure of political directors.
    Keywords: political economy, market credibility, corporate scandals, China
    JEL: G34 O17 P16 G32 G39
    Date: 2015–03
  4. By: Luke Hurst (East Asian Bureau of Economic Research)
    Abstract: This article analyses the motivation and impact of the 2009 intervention of the China Iron and Steel Association (CISA) in benchmark price negotiations. The impact of the transition from benchmark pricing to a spot market mechanism, which was a consequence of the CISA’s intervention, is examined using a constrained bilateral monopoly model to calculate the financial impact of switching pricing mechanisms on Australian exporters and Chinese importers.
    Keywords: iron ore, China
    JEL: F13 L16 L11
    Date: 2015–04
  5. By: Hanming Fang; Quanlin Gu; Wei Xiong; Li-An Zhou
    Abstract: We construct housing price indices for 120 major cities in China in 2003-2013 based on sequential sales of new homes within the same housing developments. By using these indices and detailed information on mortgage borrowers across these cities, we find enormous housing price appreciation during the decade, which was accompanied by equally impressive growth in household income, except in a few first-tier cities. While bottom-income mortgage borrowers endured severe financial burdens by using price-to-income ratios over eight to buy homes, their participation in the housing market remained steady and their mortgage loans were protected by down payments commonly in excess of 35 percent. As such, the housing market is unlikely to trigger an imminent financial crisis in China, even though it may crash with a sudden stop in the Chinese economy and act as an amplifier of the initial shock.
    JEL: R3
    Date: 2015–04
  6. By: Albert Park (Department of Economics, Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology); Xinzheng Shi (School of Economics and Management, Tsinghua University); Xuehui An (National Center for Education Development Research, China Ministry of Education)
    Abstract: This paper investigates the impact of high school quality on students’ educational attainment using a regression discontinuity research design based on entrance examination score thresholds that strictly determine admission to the best high schools. Using data from rural counties in Western China, we find that attending a magnet school significantly increases students’ college entrance examination scores and the probability of being admitted to college.
    Keywords: magnet high school, regression discontinuity design, academic performance
    JEL: I21 I28 O53
    Date: 2015–02
  7. By: Dabo Guan; David M. Reiner; Zhu Liu
    Abstract: Drawing on the wider ‘catching up’ literature, we examine the rapid growth in Chinese spending on science and technology, which, in spite of its growing infrastructure, remains heavily reliant on foreign inputs. We examine both the economic and political drivers behind China’s scientific development, making a distinction between domestic investments and international technology trade. Firms provide over two-thirds of total R&D funding, most of which has been spent on ‘high-tech’ sectors for export production. The fastest growing research area is in environmental sciences and energy technology. China’s technology imports are shifting away from ‘technologies for production’, towards ‘technologies for innovation’, encouraged by the national development strategy on enhancing scientific research capacities. In particular, we present evidence from China’s imported technology contracts. Energy is the second largest sector after manufacturing in terms of imported technology contracts.
    Keywords: China, R&D, science and technology, spillovers, imported technology contracts
    JEL: I23 I28 O31 O32 O38 N35 N75
    Date: 2014–04–20
  8. By: Albert Park (Department of Economics, Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology); Naureen Karachiwalla (International Food Policy Research Institute (IFPRI))
    Abstract: We provide the first evidence that promotion incentives can influence effort of employees in the public sector by studying China’s system of annual evaluations and promotions for teachers. Theoretical predictions from a tournament model of promotion incentives are tested using panel data on primary and middle school teachers in western China. Consistent with theory, we find that promotions are associated with significant wage increases, that higher wage increases are associated with higher effort, that teachers increase effort in the years leading up to promotion eligibility but reduce effort if they are repeatedly passed over for promotion, and that increasing the number of competitors reduces the relative performance of those at the extremes of the skill distribution. Evaluation scores are positively associated with time spent on teaching and with student test scores, diminishing concerns that evaluations are manipulated.
    Keywords: teacher incentives, promotions, China
    JEL: J31 J33 J45 M51
    Date: 2015–02
  9. By: Zhou Xun (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS, GREQAM)
    Abstract: In this paper I investigate the conditional correlation between preference for redistribution and the perceived role of "circumstances" and "effort" using the Chinese General Social Survey. I found very signi?cant correlations, thus validating the hypothesis of "sense of justice" for China. The migrant worker group who has dual identity (living/working in an urban area while being registered as a rural individual) is analysed in order to identify a discrimination effect (induced by the Chinese rural-urban segmentation policy) upon attitudes. However, being migrant is an endogenous variable to the attitude variables and the consistent estimate of this effect is much more important than the effect produced by a naïve estimate. The econometric model is a multivariate triangular LDV system with a binary endogenous explanatory variable estimated via a GHK simulator method. To implement the GHK calculations, I propose a parametric constraint to impose the positivity of the 3 × 3 correlation matrix. A generalisation for higher dimension cases is provided.
    Keywords: preference for redistribution, inequality perceptions, conditional correlation, Hukou and migrant worker, binary endogenous, GHK simulator
    JEL: C36 D19 H23 J18
    Date: 2015–04
  10. By: Zhong Qin; Minghuan Huang; Wenli Cheng
    Abstract: Based on panel data of 1891 Chinese listed companies over the period 2008-2013, we find a positive correlation between the companies’ philanthropic giving and their ability to obtain bank loans in the subsequent year. This result suggests that corporate philanthropy can be usefully seen as an investment in cultivating good relationships with the government and that the investment return comes in the form of better access to government-controlled financial resources. Thus regardless whether or not the companies were motivated by altruistic considerations, their philanthropic giving was in fact (handsomely) rewarded. In this sense, corporate philanthropy in China seems to be a case of doing well by doing good.
    Keywords: Corporate Philanthropy, Long-term Bank Loans, Political Connections
    Date: 2014–10
  11. By: Stéphanie Monjon; Julien Gourdon; Sandra Poncet
    Abstract: This work investigates the motivations behind the Chinese fiscal policy on exports. It relies on very detailed product level (HS 6 digit) data over the period 2002-12 covering both export tax and export VAT rebate. It aims to uncover the respective importance of the various policy motivations and how they evolved over time. Our empirical analysis relates the tax rates to proxies of official objectives pursued by the Chinese public authorities such as those related to the promotion of technology or protection of the environment but also other unstated motives pertaining to subsidization of downstream sectors and terms of trade. Our results suggest that the Chinese fiscal policy targeting exports follows a variety of objectives whose relative importance changed over the period 2002-2012.
    Keywords: Trade policy;industrial policy;China;VAT system;export tax
    JEL: F10 F14 Q56
    Date: 2015–04
  12. By: Naubahar Sharif (Division of Social Science, Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology)
    Abstract: Over the last century and a half, global technological leadership has shifted from Great Britain to the United States. In this paper we argue that China is positioning itself to assume global leadership in technology within the coming few decades. We identify three sources of competitive advantage for China’s ascent in the global technology stakes: its massive domestic market, its centralized power and willingness to employ state-sponsored industrial policy and government support, and the process of globalization that continues to transform markets worldwide. After acknowledging skeptical views of China’s capacity to achieve global technology leadership, we survey the present state of affairs and assess its prospects for growth based on statistical evidence and multiple illustrative examples. We argue that the three sources of competitive advantage we explicate offer China a path to imminent global technological leadership.
    Keywords: technology leadership, innovation, industrial policy, globalization, China
    JEL: Q55 O31 O32 O14
    Date: 2015–02
  13. By: Girma, Sourafel (University of Nottingham); Gong, Yundan (Aston University); Görg, Holger (Kiel Institute for the World Economy); Lancheros, Sandra (University of Nottingham)
    Abstract: Before and after its accession to the WTO in 2001, China has undergone a far-reaching investment liberalisation. As part of this, existing restrictions on foreign ownership structure and mandatory export and technology transfer requirements imposed on foreign firms have been lifted in a number of industries. Against this background we identify the causal effects of foreign acquisitions on export market entry and technology take-off and evaluate whether the level of foreign ownership plays a role in stimulating these changes. Using doubly robust propensity score reweighted bivariate probit regressions to control for the selection bias associated with firm level foreign acquisition incidences, we uncover strong but heterogeneous positive effects on export activity for all types of foreign ownership structure. We also find that minority foreign owned acquisition targets experience higher likelihood of R&D, providing evidence that joint ventures can contribute positively to China's "science and technology take-off".
    Keywords: investment liberalization, FDI, China, propensity score reweighting, doubly robust estimation
    JEL: F23
    Date: 2015–04
  14. By: Peiwen Bai; Wenli Cheng
    Abstract: This paper studies the relationship between three measures of relative earnings and firm performance based on data of 664 listed manufacturing companies in China over the period 2005-2012. It finds that (1) capital earnings relative to labor earnings and the overall average wage level relative to a firm’s average wage level had negative effects on firm performance; (2) the earnings of high-level managers relative to ordinary workers had a positive impact on firm performance; and (3) the effects of relative earnings on firm performance differed across regions, industry characteristics, and firm ownership structures, and over different time periods.
    Keywords: relative income share of capital and labor, relative earnings of management and workers, relative wage, firm performance in China
    JEL: D24 J31
    Date: 2014–11
  15. By: Li Han (Division of Social Science, Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology); Jiaxin Xie (Division of Social Science, Hong Kong University of Science and Technology)
    Abstract: One recent policy tend to improve teacher quality is providing conditional grants to trainees in teacher colleges and commit them to working in disadvantaged areas upon graduation. Yet little is known whether such policies attract better trainees. This paper evaluates a conditional grant program in Chinese teachers' colleges, which commits students to teaching in their home province. Using a triple difference method, we find that teaching majors obtain better students due to the conditional grants. Exploring the heterogeneous treatment effects across regions, the policy effects not only increase as the costs of living during college decrease, but are larger in provinces with larger shares of disadvantaged students – i.e. rural, female, rural female, and with more siblings. These results suggest that the Chinese free teacher education program successfully attracts high quality students into the teaching force, and these high quality teacher trainees are likely to be credit constrained.
    Keywords: conditional grants, teacher quality, China
    JEL: P36 H52 H75
    Date: 2015–03
  16. By: Ana Cardoso (Faculty of Economics, University of Coimbra, Portugal); António Portugal Duarte (Faculty of Economics, University of Coimbra and GEMF, Portugal)
    Abstract: The aim of this paper is to analyze the impact of the Chinese foreign exchange policy on foreign trade with the European Union. After describing the importance of the exchange rate in an open economy and some of the methodologies employed to calculate its equilibrium value, we examine whether the Chinese competitiveness is due to the existence of misalignment (undervaluation) of its exchange rate, or rather, to other sources of competitiveness. For this purpose, we use a Vector Error Correction (VEC) model to estimate a long-run exports equation. The empirical results indicate that over the past few years, Chinese exports have benefited from an ‘unfair’ competitive advantage resulting from the manipulation of its currency value.
    Keywords: Competitiveness, China, European Union, foreign trade, misalignments, real exchange rate.
    JEL: C39 F10 O24
    Date: 2015–04
  17. By: Guojun He (Department of Economics, Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology); Maoyong Fan (Department of Economics, Ball State University); Maigeng Zhou (National Center for Chronic and Noncommunicable Disease Control and Prevention, Chinese Center for Disease Control and Prevention)
    Abstract: By exploiting exogenous variation in air quality during the 2008 Beijing Olympic Games, we estimate the effect of air pollution on mortality in China. We find that a 10-μg/m^3 (roughly 10%) decrease in PM_10 concentrations reduces monthly standardized all-cause mortality by 6.63%. The mortality reduction during the Olympics is mainly driven by fewer cardiocerebrovascular and respiratory deaths. Extrapolating our results to all urban areas in China, we estimate that the economic benefits from averted pre-mature deaths would range from 380 billion to 6 trillion Yuan annually if PM_10 concentrations were reduced to the WHO guideline level of 20 μg/m^3.
    Keywords: air pollution, mortality, particulate matter, 2008 Beijing Olympic Games
    JEL: Q53 I15 I18
    Date: 2015–01
  18. By: Badi H. Baltagi (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244); Peter H. Egger (ETH Zurich); Michaela Kesina (ETH Zurich)
    Abstract: This paper assesses the role of intra-sectoral spillovers in total factor productivity across Chinese producers in the chemical industry. We use a rich panel data-set of 12,552 firms observed over the period 2004-2006 and model output by the firm as a function of skilled and unskilled labor, capital, materials, and total factor productivity, which is broadly defined. The latter is a composite of observable factors such as export market participation, foreign as well as public ownership, the extent of accumulated intangible assets, and unobservable total factor productivity. Despite the richness of our data-set, it suffers from the lack of time variation in the number of skilled workers as well as in the variable indicating public ownership. We introduce spatial spillovers in total factor productivity through contextual effects of observable variables as well as spatial dependence of the disturbances. We extend the Hausman and Taylor (1981) estimator to account for spatial correlation in the error term. This approach permits estimating the effect of time-invariant variables which are wiped out by the fixed effects estimator. While the original Hausman and Taylor (1981) estimator assumes homoskedastic error components, we provide spatial variants that allow for both homoskedasticity and heteroskedasticity. Monte Carlo results show, that our estimation procedure performs well in small samples. We find evidence of positive spillovers across chemical manufacturers and a large and significant detrimental effect of public ownership on total factor productivity.
    Keywords: Technology Spillovers, Spatial econometrics, Panel data econometrics, Firm-level productivity, Chinese firms
    JEL: C23 C31 D24 L65
    Date: 2014–12
  19. By: Harry WU
    Abstract: Using a newly constructed China Industrial Productivity (CIP) data set, this study adopts the Jorgensonian aggregate production possibility frontier (APPF) framework incorporating Domar weights to account for the industry origin of China's aggregate growth for the period 1980-2010. We show that 7.14 percentage points of China's gross domestic product (GDP) growth of 9.16% per annum can be attributed to the increase in labor productivity and 2.02 percentage points to the number of hours worked. The labor productivity growth can be further decomposed into 5.55 percentage points of capital deepening, 0.35 percentage points of labor quality improvement, and 1.24 percentage points of total factor productivity (TFP) growth. Across industries, those less prone to government intervention, such as agriculture and "semi-finished & finished" manufacturing industries, appear to be more productive than those subject to more government intervention, typically the "energy" industry group. The Domar aggregation scheme also reveals that only two-thirds of the 1.24% annual TFP growth, or 0.84 percentage points, are directly from industries and the remaining 0.40 percentage points are from a net factor reallocation effect in which labor played a positive role of 0.56 percentage points whereas capital played a negative role of -0.16 percentage points.
    Date: 2015–04
  20. By: Peiwen Bai; Wenli Cheng
    Abstract: This paper develops a simple accounting framework to measure the extent of labor misallocation in Chinese provinces over the period 1980-2010. It also investigates possible factors that influence labor misallocation. The main findings are: (1) the extent of labor misallocation fell substantially in the first half of 1980s. During the 25 years since 1985, labor allocation has improved somewhat but there was no monotonic trend of improvement over time. (2) In 2010, the Eastern region had the lowest level of labor misallocation, followed by the Central region, and the Western region. (3). Wage differentials cross primary, secondary and tertiary sectors accounted for a substantial portion of measured overall labor misallocation; the secondary sector’s wage deviations from VMPL also had the effect of raising labor misallocation, whereas the impacts of the primary and tertiary sectors’ wage deviation from VMPL differed over time. (4) A higher level of urbanization, the development of the tertiary sector and the growth of the non-state sector appear to have contributed to a reduction in labor misallocation.
    Keywords: accounting of resource misallocation; labor misallocation in China
    JEL: C43 J01
    Date: 2014–11
  21. By: Haichao Fan; Yao Amber Li (Department of Economics, Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology)
    Abstract: This paper presents ....
    Keywords: trade
    JEL: F42
    Date: 2015–01
  22. By: Albert Park (Department of Economics, Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology); Shu Cai (Department of Economics, Hong Kong University of Science and Technology)
    Abstract: We provide a new explanation for the stronger relationship between income and subjective wellbeing (SWB) found in cross-sectional versus panel studies based on the predictions of a rational expectations model of utility maximization with permanent and transitory income shocks. The model predicts that SWB is affected by unanticipated rather than anticipated income, and is more influenced by permanent rather than transitory income shocks. We hypothesize that share of cross-sectional income variation accounted for by permanent income is greater than the share of changes in income over time accounted for by unanticipated shocks to permanent income. We test our predictions using a unique panel dataset from rural China which includes subjective expectations of future income and actual income in each wave, enabling us to separately identify the effects of unanticipated permanent and transitory income shocks. The results confirm the predictions, providing support for the importance of permanent income in explaining SWB.
    Keywords: subjective well-being, permanent income, transitory income
    JEL: O12 I31
    Date: 2015–02
  23. By: Zou, Lele; Xue, Jinjun; Fox, Alan; Meng, Bo; Shibata, Tsubasa
    Abstract: Chinese government commits to reach its peak carbon emissions before 2030, which requires China to implement new policies. Using a CGE model, this study conducts simulation studies on the functions of an energy tax and a carbon tax and analyzes their effects on macro-economic indices. The Chinese economy is affected at an acceptable level by the two taxes. GDP will lose less than 0.8% with a carbon tax of 100, 50, or 10 RMB/ton CO2 or 5% of the delivery price of an energy tax. Thus, the loss of real disposable personal income is smaller. Compared with implementing a single tax, a combined carbon and energy tax induces more emission reductions with relatively smaller economic costs. With these taxes, the domestic competitiveness of energy intensive industries is improved. Additionally, we found that the sooner such taxes are launched, the smaller the economic costs and the more significant the achieved emission reductions.
    Keywords: China, Energy policy, Environmental policy, Taxation, Climatic change, Econometric model, Economic conditions, Energy tax, Carbon tax, Climate change, CGE model, Energy intensive industry
    JEL: C13 C15 E37 J21 K32 Q54 C54 O44
    Date: 2015–01
  24. By: Shan Wang (ECUST); Zhi-Qiang Jiang (ECUST); Sai-Ping Li (Academia Sinica); Wei-Xing Zhou (ECUST)
    Abstract: Technical trading rules have a long history of being used by practitioners in financial markets. Their profitable ability and efficiency of technical trading rules are yet controversial. In this paper, we test the performance of more than seven thousands traditional technical trading rules on the Shanghai Securities Composite Index (SSCI) from May 21, 1992 through June 30, 2013 and Shanghai Shenzhen 300 Index (SHSZ 300) from April 8, 2005 through June 30, 2013 to check whether an effective trading strategy could be found by using the performance measurements based on the return and Sharpe ratio. To correct for the influence of the data-snooping effect, we adopt the Superior Predictive Ability test to evaluate if there exists a trading rule that can significantly outperform the benchmark. The result shows that for SSCI, technical trading rules offer significant profitability, while for SHSZ 300, this ability is lost. We further partition the SSCI into two sub-series and find that the efficiency of technical trading in sub-series, which have exactly the same spanning period as that of SHSZ 300, is severely weakened. By testing the trading rules on both indexes with a five-year moving window, we find that the financial bubble from 2005 to 2007 greatly improve the effectiveness of technical trading rules. This is consistent with the predictive ability of technical trading rules which appears when the market is less efficient.
    Date: 2015–04
  25. By: Pascal Abb (GIGA German Institute of Global and Area Studies); Georg Strüver (GIGA German Institute of Global and Area Studies)
    Abstract: This paper uses the case of Sino–Southeast Asian relations to gain insights on China’s ability to muster support for its global agenda. The analysis focuses on the regional–global nexus of interstate relations and explores the extent to which the quality of two states’ regional relations influences the likelihood of behavioral alignment in global politics. To this end, we consider a range of potentially influential aspects of Sino–Southeast Asian relations (the quality of bilateral relations based on recent event data, alliance policy, regime similarity, development level, and economic ties) and employ a statistical model to search for correlations with observed trends of voting coincidence in the United Nations General Assembly during the period 1979–2010. We find a strong correlation between the quality of regional bilateral relations and global policy alignment, which indicates that patterns of regional cooperation and conflict also impact the trajectory of China’s rise in world affairs.
    Keywords: regional cooperation and conflict, Southeast Asia, China, event data, UN voting analysis, panel data
    Date: 2015–03

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