|
on China |
| By: | Jinzhao Chen (The University of Hong Kong); Xingwang Qian (SUNY Buffalo State and Hong Kong Institute for Monetary Research) |
| Abstract: | Liberalizing China's capital account may have profound implications for the RMB exchange rate, monetary policy autonomy, and Chinese and the world economy. Owing to the scarcity of proper measurements of China's capital controls, rigorous studies on the effectiveness and implications of China's capital controls are limited. We contribute to the literature by creating a new data set of indices including de jure and hybrid measurements of the changes in China's capital controls, hoping to inspire a new avenue of research in this area. In contrasting to other capital control indices that are compiled in a yes-or-no style, we quantify the intensity of changes in China's capital controls. Our indices reveal a persistent but uneven process of capital account liberalization in China between 1999 and 2012. This paper describes the de jure and hybrid indices, including indices for capital controls on individual asset categories, gross flows, inflows and outflows, as well as for residents and nonresidents asset transactions. Understanding that China usually implements policies in a step by step gradualist style, we extract those gradual information from the lines of the text in the IMF's Annual Report on Exchange Arrangement and Exchange Restrictions (AREAER) and some supplementary material from other sources. |
| Keywords: | Capital Flows, China's Capital Controls, De Jure Index, Hybrid Index |
| JEL: | C82 F15 F21 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:hkm:wpaper:112015&r=cna |
| By: | Michael Funke (Hamburg University, CESifo, Munich, and Hong Kong Institute for Monetary Research); Petar Mihaylovski (Hamburg University); Haibin Zhu (JP Morgan Chase Bank) |
| Abstract: | The paper sheds light on the interplay between monetary policy, the commercial banking sector and the shadow banking sector in mainland China by means of a nonlinear stochastic general equilibrium (DSGE) model with occasionally binding constraints. In particular, we analyze the impacts of interest rate liberalization on monetary policy transmission as well as the dynamics of the parallel shadow banking sector. Comparison of various interest rate liberalization scenarios reveals that monetary policy results in increased feed-through to the lending and investment under complete liberalization. Furthermore, tighter regulation of interest rates in the commercial banking sector in China leads to an increase in loans provided by the shadow banking sector. |
| Keywords: | DSGE Model, Monetary Policy, Financial Market Reform, Shadow Banking, China |
| JEL: | E32 E42 E52 E58 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:hkm:wpaper:122015&r=cna |
| By: | Wenli Cheng; Yongzheng Wu |
| Abstract: | This paper investigates income inequality in the post-reform Chinese economy using both national time series and provincial panel data 1978 to 2011. We identify a Kuznets inverted-U relationship between economic development and income inequality and show that this relationship was driven by the process of urbanization. We find that, after controlling for urbanization, low productivity in agriculture relative to that of the economy as a whole (i.e., dualism) and inflation appear to have been significant contributing factors to income inequality. There is also some evidence to suggest that, the expansion of higher education may have widened income inequality, but the expansion of secondary education may have narrowed it. |
| Keywords: | Kuznets curve, income inequality in China, Theil index, urbanisation, dualism |
| JEL: | O15 O53 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2015-32&r=cna |
| By: | Haining Wang; Zhiming Cheng; Russell Smyth |
| Abstract: | This study examines the relationship between consumption and happiness, using panel data from China Family Panel Studies (CFPS). We find that total consumption expenditure has a significant and positive effect on happiness, but we find no evidence of a non-linear relationship between consumption and happiness. There are heterogeneous effects of consumption on happiness across subsamples and for different types of consumption expenditure. We find that relative consumption matters, irrespective if the reference group is defined in terms of consumption at the community or county level or on the basis of age, education and gender. However, the extent to which comparison effects are upward looking, or asymmetric, depend on how the comparison group is defined. We also find that comparison with one’s past consumption has no significant effect on an individual’s happiness. |
| Keywords: | happiness, consumption, China |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2015-29&r=cna |
| By: | Zhiming Cheng; Russell Smyth |
| Abstract: | China’s imbalanced sex ratio has increased the prevalence of hypergamous (marrying up) and hypogamous (marrying down) marriages. We explore the implications of this phenomena for satisfaction with one’s spouse in terms of sexual satisfaction along a range of dimensions, care received from one’s spouse, affection expressed to, and received from, one’s spouse and the prevalence of domestic violence in the home. The main argument that we develop in the paper is that assortative mating is associated with higher satisfaction levels with one’s spouse because those involved in homogamous marriages will have more shared values, have more empathy for each other and be better able to communicate with each other, both in terms of everyday living and in terms of their sex lives. We test this argument using data from the China Health and Family Life Survey. We find considerable support for the argument that marrying up, or down, lowers satisfaction with one’s spouse. |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2015-22&r=cna |
| By: | Stephen B. Kaplan (Department of Economics/Institute for International Economic Policy, George Washington University) |
| Abstract: | How does a shifting economic power balance between the United States and China affect the strategic choices of Latin American governments? During the last several decades, Latin America has often relied on a Western development model that aimed to attract global market capital. After excessive borrowing led to financial busts, however, many countries have sought to insulate themselves from market volatility. Rising terms of trade and a commodity boom, driven in part by China, helped buttress economic growth during much of the 2000s. But, what accounts for the growing variation in national policy approaches, ranging from ongoing market orthodoxy to heavy government intervention? I argue that governments that tap new Chinese income streams – both non-conditional lending and taxable commodity flows – have reduced their reliance on conditionality-linked Western financing, giving them more autonomy to use budget deficits to intervene in their economies. Employing a systematic comparative analysis of three Latin American countries – Argentina, Brazil, and Venezuela – I find that Chinese non-conditional funding endows governments with greater budgetary discretion, making austerity less likely. These findings offer important new insights for the study of globalization, the Latin American left, and China-Latin American relations, by helping explain the structural conditions that enable nations to veer from Western governance models. |
| Keywords: | Economic Policy, Latin America, China, Investment, Lending, Fiscal Policy, Economic Governance |
| JEL: | F00 F30 F40 H00 H30 H60 N10 N20 N16 N26 O10 O54 P50 P51 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2015-3&r=cna |
| By: | Zhiming Cheng; Russell Smyth |
| Abstract: | We examine the relationship between happiness, crime victimization and neighbourhood safety in China. We find that being a victim of crime, and having an acquaintance who is a victim of crime, have a negative effect on happiness. The cost of compensating someone who is a victim of crime, such that they are returned to the same position as if they had not been victimized, is similar to the cost of compensating someone who has an acquaintance who is a victim of crime (around 60 per cent of annual household income). Females who are victims of crime, and victims of out-of-home theft and assault/threat, feel less victimized if they have an acquaintance who is also a victim of crime with whom to share their experience. Living in a safe neighbourhood has a positive effect on happiness. The amount needed to compensate someone for living in an unsafe, or neutral neighbourhood, as opposed to safe neighbourhood, is 1500 per cent of annual household income, which is much higher than the shadow price suggested by previous studies for the United States and United Kingdom. |
| Keywords: | China; Crime victimization; Neighbourhood safety; Happiness |
| JEL: | D60 I31 K42 O10 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2015-08&r=cna |
| By: | Jun Gu; Annika Mueller; Ingrid Nielsen; Jason Shachat; Russell Smyth |
| Abstract: | The last decade has seen a massive influx of Chinese migrants to sub-Saharan Africa, where many have opened small businesses to compete amongst local merchants. These Chinese have often met resistance from the local competition, resulting in a sharp social divide. The current paper draw’s on Allport’s (1954) contact hypothesis theory and reports on the results of two experimental studies that examined the effects of direct and imagined contact on indigenous Malawian shopkeepers’ willingness to spend future time with their Chinese counterparts. Results show that direct contact led to Malawians’ greater willingness to spend time with their Chinese counterparts, and this effect persisted over a time period of ten days, when a follow up survey was conducted. In contrast, imagined contact did not change Malawians’ willingness to spend future time with Chinese. Implications of these results for China’s ambitions to introduce its development model into Africa are discussed. |
| Keywords: | Chinese migrants in Africa, social contact, Chinese small business |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2015-04&r=cna |
| By: | Rudkin, Simon; Wong, Sen Min |
| Abstract: | As major financial crises, and the rise of China have shaped the new world order, so it is inevitable that those nations, especially in South East Asia, that once looked west for stability need to reappraise their situation. With the markets so intertwined in events, studying the propagation of equity price shocks within the wider set of macroeconomic variables allows us to say more about how relations are changing, and the likely impacts of any future crash. With data reaching into 2014, this paper is better able to reflect the post global financial crisis period. Using a Global Vector Autoregressive (GVAR) model we analyse these changes and what lies in store for South East Asia, and the ASEAN 4 in particular. Isolating three distinct trade patterns in our weight matrices responses to crises are clearly identifiable, and the opening up of China readily chartable. Indirect effects of China’s rise are highlighted; impacts on the ASEAN 4 being via other nations to date, but direct impact is appearing. |
| Keywords: | Financial Linkages, Global VAR, Equity Prices |
| JEL: | C51 F15 F36 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:65001&r=cna |