nep-cna New Economics Papers
on China
Issue of 2015‒07‒18
seven papers chosen by
Zheng Fang
Ohio State University

  1. Capital Markets in China and Britain, 18th and 19th Century: Evidence from Grain Prices By Wolfgang Keller; Carol H. Shiue; Xin Wang
  2. The Effect of Family Size on Education: New Evidence from China's One Child Policy By Argys, Laura M.; Averett, Susan L.
  3. How continuing exporters set the price? Theory and empirical evidence from China By Tan, Yong; Lin, Faqin; Hu, Cui
  4. Has trade openness reduced pollution in China? By José de Sousa; Laura Hering; Sandra Poncet
  5. Matching Food with Mouths: A Statistical Explanation to the Abnormal Decline of Per Capita Food Consumption in Rural China By Yu, Xiaohua; Abler, David G.
  6. What is the job satisfaction and active participation of medical staff in public hospital reform: a study in Hubei province of China By Pengqian Fang; Zhenni Luo; Zi Fang
  7. Structural Economic Reform in China: The Role of the Shanghai Free Trade Zone By Giovanni Palmioli; Adam Heal

  1. By: Wolfgang Keller; Carol H. Shiue; Xin Wang
    Abstract: Capital markets allow surplus income to be invested into productivity-enhancing projects. Despite their prominence in general accounts of growth little is known on their role in the emergence of modern economic growth. In this paper we ask whether capital market performance might explain why Britain surged ahead of China in the 18th century. We employ an asset-pricing model together with information on regional grain prices to derive interest rates, and then compare capital market development in large parts of Britain and China. We first calibrate the method and show that it can replicate key features of the United States’ early 19th century capital market, where more systematic data from bank interest rates is available. Using this approach we estimate interest rates for Britain that are at least 20% lower than those for China, for the years 1770 - 1860. Moreover, the regional integration of British capital markets, measured in terms of bilateral interest rate correlations, was far greater than it was in China. The Yangzi Delta correlations come close to the British average at distances below 200 kilometers, but at larger distances interest rate correlations in Britain are twice those of the Delta, and three or more times as high as elsewhere in China. We also find that Britain’s advantage over China in terms of market integration existed already in the late 18th century. Backcasting on the 19th century trends suggests capital market divergence started by the year 1690. Overall, our results provide support for the hypothesis that divergence in capital market development occurred before income divergence, and may therefore be an important factor in explaining the Great Divergence.
    JEL: G12 N10 N13 N25 O10
    Date: 2015–07
  2. By: Argys, Laura M. (University of Colorado Denver); Averett, Susan L. (Lafayette College)
    Abstract: Social scientists theorize that the inverse relationship between socio-economic status and family size represents a trade-off between the quality and quantity of children. Evaluating this hypothesis empirically requires addressing the simultaneity of the quality and quantity decisions. Researchers have used the unanticipated birth of twins as exogenous variation in family size or the sex composition of the first two children as an instrument for family size with mixed results. We exploit a different source of exogenous variation in family size. The One Child Policy (OCP) in China dramatically reduced Chinese fertility and we examine how the OCP has affected the educational attainment of Chinese migrants to the U.S. Using data from the American Community Survey (2009-2012) and a difference-in-differences strategy our results support the quality-quantity tradeoff theory. We find that education increased more for Chinese migrants born after the OCP than their counterparts from other East Asian countries.
    Keywords: education, migration, quality-quantity tradeoff, family size, One Child Policy
    JEL: I21 J18
    Date: 2015–07
  3. By: Tan, Yong; Lin, Faqin; Hu, Cui
    Abstract: In this paper, we build a dynamic game model of quantity competition to explain the price difference between continuing exporters and exits. Continuing exports are forward looking and they may intentionally set a lower price in the export market at current stage to crowd out the competitors to maximize the overall expected profit in their total life period. Using a large sample of matched panel data of Chinese firms from firm-level production data and product-level trade data, we find that after controlling the most important determinants of export price as well as the firm-year-specific effects, continuing exporters charge a price 42.4%-54.0% lower than the price level charged by future exits in China.
    Keywords: Export prices, Dynamic game, Quantity competition
    JEL: C73 F10
    Date: 2015–07
  4. By: José de Sousa; Laura Hering; Sandra Poncet
    Abstract: We use recent detailed Chinese data on trade and pollution emissions to assess the environmental consequences of China’s integration into the world economy. We rely on a panel dataset covering 235 Chinese cities over the 2003-2012 period and examine whether environmental repercussions from trade openness depends on whether it emanates from processing or ordinary activities. In line with our theoretical predictions, we find a negative and significant effect of trade on emissions that is magnified for processing trade and activities undertaken by foreign firms: much lower environmental gains result from either ordinary trade activities or domestic firms, even though these are today the main drivers of China’s export and import growth. This result invites caution about the prospects for pollution in a context of decline role of processing trade.
    Keywords: Trade openness;Pollution;SO2 emissions;China
    JEL: F10 F14 O14
    Date: 2015–07
  5. By: Yu, Xiaohua; Abler, David G.
    Abstract: This study provides an alternative explanation for the unusual apparent decline in food consumption in rural China after 2000. We find that it is mainly attributable to significant measurement errors in the Chinese Rural Household Survey and the calculation of per capita food consumption. In a household survey, total consumption for a household in a certain period is often well recorded, and per capita consumption is obtained by dividing total consumption by household size. Such a calculation of per capita food consumption is vulnerable to a mismatch between food and mouths. Total consumption may be subject to measurement errors caused primarily by food away from home (FAFH). Also, the household size recorded in the survey is not necessarily the same as the number of mouths (consumption household size), who consume the food recorded in the survey. Our results indicate that food consumption in rural China is currently being underestimated by about 30%. Our results also indicate that income elasticities of food consumption are greater than measured elasticities based on the Rural Household Survey data.
    Keywords: Food demand, underreporting, rural China, food away from home, off-farm migration, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Q11, C81, O13,
    Date: 2015–02
  6. By: Pengqian Fang; Zhenni Luo; Zi Fang
    Abstract: Background: In China, public hospital reform has been underway for almost 5 years, and 311 pilot county hospitals are the current focus. This study aimed to assess the job satisfaction and active participation of medical staff in the reform. A total of 2268 medical staff members in pilot and non-pilot county hospitals in Hubei, China, were surveyed. Methods: Questionnaires were used to collect data. The Pearson chi-square statistical method was used to assess the differences between pilot and non-pilot county hospitals and identify the factors related to job satisfaction as well as the understanding and perception of the reform. Binary logistic regression was performed to determine the significant factors that influence the job satisfaction of medical staff in pilot county hospitals. Results: Medical staff members in pilot county hospitals expressed higher satisfaction on current working situation, performance appraisal system, concern showed by leaders, hospital management, and compensation packages (P < 0.05). They were exposed to work-related stress at a higher extent (P < 0.05) and half of them worked overtime. Within pilot county hospitals, less than half of the medical staff members were satisfied with current job and they have evidently less satisfaction on compensation packages and learning and training opportunities. The working hours and work stress were negatively related to the job satisfaction (P < 0.05). Satisfaction on the performance appraisal system, hospital management, compensation packages, and learning and training opportunities were positively related to job satisfaction (P < 0.05). Medical staff in pilot county hospitals exhibited better understanding of and more positive attitude towards the reform (P < 0.05). Conclusions: Pilot county hospitals have implemented some measures through the reform, but there still are deficiencies. The government officials and hospital administrators should pay attention to influencing factors of job satisfaction and focus on the reasonable demands of medical staff. In addition, the medical staff in pilot county hospitals exhibited a better understanding of the public hospital reform programme and showed more firm confidence, but there still were some medical staff members who hold negative attitude. The publicity and education of the public hospital reform still need improvement. Keywords: Medical staff, China, Public hospital reform, Working situation, Satisfaction, Understanding, Perception
    Keywords: Medical staff; China; public hospital reform; working situation; satisfaction; understanding; perception
    JEL: R14 J01
    Date: 2015
  7. By: Giovanni Palmioli (United Nations Economic and Social Commission for Asia and the Pacific (ESCAP)); Adam Heal (United Nations Economic and Social Commission for Asia and the Pacific (ESCAP))
    Abstract: This note reviews the emerging imbalances in the Chinese economy and the attendant need for structural reforms, including financial sector and services liberalization. The role that the recently launched Shanghai Free Trade Zone could play in accelerating these reforms is then considered, alongside an assessment of progress to date.
    Keywords: Economic growth, Shanghai Free Trade Zone, economic reform, foreign investment
    JEL: F1
    Date: 2014–11

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