nep-cna New Economics Papers
on China
Issue of 2015‒06‒05
five papers chosen by
Zheng Fang
Ohio State University

  1. The Local Impact of Typhoons on Economic Activity in China: A View from Outer Space By Robert J R Elliott; Eric Strobl; Puyang Sun
  2. Take-off, Persistence, and Sustainability : The Demographic Factor of Chinese Growth By Cai Fang, Lu Yang
  3. "Made in China" - How does it affect our understanding of global market shares? By Benkovskis, Konstantins; Wörz, Julia
  4. Efficiency or Equity? Simulating the Carbon Emission Permits Trading Schemes in China Based on an Inter-Regional CGE Model By Libo Wu; Weiqi Tang
  5. Valuing the environment: Happiness and willingness-to-pay By Cheng, Zhiming; Wang, Ben

  1. By: Robert J R Elliott; Eric Strobl; Puyang Sun
    Abstract: We examine the impact of typhoons on local economic activity in coastal China. To capture potential damages from an individual typhoon we use historical typhoon track data in conjunction with a detailed wind-field model. We then combine our damage proxy with satellite derived nightlight intensity data to contact a panel data set that allows us to estimate the impact of typhoons at a spatially highly disaggregated level (approx. 1km). Our results show that typhoons have a negative and significant, but short term, impact on local activity - a typhoon that is estimated to destroy 50% of the property reduces local economic activity by 20% for that year. Over our period of analysis (1992-2010) total net economic losses are estimated to be in the region of US$28.34 billion. To assess the damage risk from future typhoons we use simulated probability distributions of typhoon occurrence and intensity and combine these with our estimated effects. Results suggest that expected annual losses are likely to be around US$0.54 billion.
    Keywords: China, typhoons, wind field model, economic impact, nightlight imagery
    JEL: O17 O44 Q54
    Date: 2015–05
  2. By: Cai Fang, Lu Yang
    Abstract: With the reduction of the working-age population and the increase of the population dependency ratio as the main characteristics of the demographic dividend having disappeared, China’s potential growth rate decreases. And our results suggest that demographic dividend contributed to nearly one forth of the economic growth in China in the past three decades, while TFP growth explains another one third with the remainder mainly due to capital accumulation, explaining nearly half. China’s potential growth rate will slow down—from nearly 10 per cent in the past 30 years to 7.5 per cent on average during 2011-2015—due to the diminished demographic dividend, but reform measures are conductive to clearing the institutional barriers to the supply of factors and productivity, thereby slowing the declining trend of potential growth rate. The aggregate reform dividend (e.g., relax family planning policy, postpone the retirement age, improvement of education and training, tax cut, and improvement of TFP) could reach to 1-2 percentage points on average during 2016-2050.
    Keywords: potential growth rate, Demographic dividend, reform dividend, total factor productivity
    JEL: O47 J21 C53
    Date: 2015–04
  3. By: Benkovskis, Konstantins; Wörz, Julia
    Abstract: We propose a comprehensive decomposition of changes in a country’s global market shares that accounts for the value added content of trade. We perform the analysis by combining two datasets – disaggregated trade data from UN Comtrade with internationally integrated Supply and Use Tables from the WIOD. The inclusion of international fragmentation alters the underlying story behind changes in market shares. The ongoing global outsourcing affects market shares directly by shifting production from G7 to BRIC countries. Moreover, accounting for the providers of the value added alters the balance between price and non-price drivers of market shares. Changes in relative quality of countries’ exports are often due to the use of intermediate inputs. For instance, the seemingly improved relative quality of BRIC export goods largely arose from intermediate inputs rather than from improvements in the quality of domestic production. In most cases, the dynamics of the value- added market shares is dominated by price factors. JEL Classification: C43, F12, F15, L15, O47
    Keywords: BRIC, China, fragmentation, G7, non-price factors, value added content of trade
    Date: 2015–04
  4. By: Libo Wu (School of Economics, Fudan University); Weiqi Tang (School of Economics, Fudan University)
    Abstract: Energy conservation and greenhouse gas (GHG) abatement have been included in the national development strategy of China. However, the rigidity in command-and-control mechanisms and arbitrariness in assignment of GHG abatement burden across regions have caused unnecessary losses in both economic efficiency and social equity. In this paper, we use an Inter-Regional Dynamic CGE (IRD-CGE) model to simulate economic and welfare impacts of climate policies on national and regional level, including carbon intensity targets, regional emission constraints and cap-and-trade mechanism. Comparison among alternative emission reduction policy mechanisms indicates that emission trading scheme can not only moderate the economic and social welfare losses, but also improve social equity by decoupling the allocation of emission permits from economic optimization of emission reduction scheme. From this perspective, emissions trading bridges the concerns for economic efficiency and social equity, since emission permits could be reallocated as an income transfer so as to promote inter-regional equity, while economic efficiency is maintained. Keywords: greenhouse gas emissions; energy conservation; emission reduction; pollution; cap-and-trade mechanism
    JEL: Q54 Q56
    Date: 2015–05
  5. By: Cheng, Zhiming; Wang, Ben
    Abstract: This paper examines the impacts of subjective and objective measures of environmental quality on happiness and willingness to pay higher prices in China. We find that a higher level of happiness is associated with better air quality, but not necessarily with better water quality. The government can encourage willingness to pay for the former, but can only substitute it for the latter. Although perceived environmental quality is important for willingness-to-pay, it plays little role in rating happiness. However, a more highly perceived government effort increases both people’s life satisfaction and willingness-to-pay.
    Keywords: China; happiness; willingness-to-pay; environmental issues
    JEL: O13 Q53
    Date: 2015–05

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