nep-cna New Economics Papers
on China
Issue of 2016‒02‒29
seven papers chosen by
Zheng Fang
Ohio State University

  1. Measuring Changes in the Bilateral Technology Gaps between China, India and the U.S. 1979 - 2008 By Shen, Keting; Wang, Jing; Whalley, John
  2. Estimating the marginal abatement cost curve of CO2 emissions in China: Provincial panel data analysis By Du, Limin; Hanley, Aoife; Wei, Chu
  3. To get the prices right for food: a “Gerschenkron state” versus the market in reforming China, 1979–2006 By Jane Du; Kent Deng
  4. The impact of government policy on preference for NEVs: the evidence from China By Xian Zhang; Ke Wang; Yu Hao; Yi-Ming Wei; Jing-Li Fan
  5. Manufacturing Growth and Local Multipliers in China By Ting Wang
  6. Corporate Deleveraging and Macroeconomic Policies: Evidence from China By Sun, Lixin
  7. The Effects of the Minimum Wage on Earnings Inequality: Evidence from China By Lin, Carl; Yun, Myeong-Su

  1. By: Shen, Keting (University of Western Ontario, Canada and Zhejiang Gongshang University, China); Wang, Jing (University of Western Ontario, Canada); Whalley, John (University of Western Ontario, Canada)
    Abstract: Popular literature suggests a rapid narrowing of the technology gap between China and the U.S. based on large percentage increases in Chinese patent applications, and equally large increases in college registrants and completed PhDs (especially in sciences) in China in recent years. Little literature attempts to measure the technology gap directly using estimates of country aggregate technologies. This gap is usually thought to be smaller than differences in GDP per capita since the later reflect both differing factor endowments and technology parameters. This paper assesses changes in China’s technology gaps both with the U.S. and India between 1979 and 2008, comparing the technology level of these economies using a CES production framework in which the technology gap is reflected in the change of technology parameters. Our measure is related to but differs from the Malmquist index. We determine the parameter values for country technology by using calibration procedures. Our calculations suggest that the technology gap between China and the U.S. is significantly larger than that between India and the U.S. for the period before 2008. The pairwise gaps between the U.S. and China, and the U.S. and India remain large while narrowing at a slower rate than GDP per worker. Although China has a higher growth rate of total factor productivity than India over the period, the bilateral technology gap between China and India is still in India’s favor. India had higher income per worker than China in the 1970’s, and China’s much more rapid physical and human capital accumulation has allowed China to move ahead, but a bilateral technology gap remains.
    Keywords: JEL Classification:
    Date: 2016
  2. By: Du, Limin; Hanley, Aoife; Wei, Chu
    Abstract: This paper estimates the Marginal Abatement Cost Curve (MACC) of CO2 emissions in China based on a provincial panel for the period of 2001-2010. The provincial marginal abatement cost (MAC) of CO2 emissions is estimated using a parameterized directional output distance function. Four types of model specifications are applied to fit the MAC-carbon intensity pairs. The optimal specification controlling for various covariates is identified econometrically. A scenario simulation of China's 40-45 percent carbon intensity reduction based on our MACC is illustrated. Our simulation results show that China would incur a 559-623 Yuan/ton (roughly 51-57 percent) increase in marginal abatement cost to achieve a corresponding 40-45 percent reduction in carbon intensity compared to its 2005 level.
    Keywords: CO2 Emissions,Marginal Abatement Cost Curve,Model Selection,China
    JEL: Q52 Q54 Q58
    Date: 2015
  3. By: Jane Du; Kent Deng
    Abstract: This article provides an empirical assessment of China’s state price policies and strategies in relation to (1) market-rebuilding for the agricultural sector and (2) food security for China.1 It traces main changes in government grain pricing, urban food subsidies, grain procurement and the administrative control over food circulation from 1979 to 2006 in a bid to transfer a non-market economy to a market one, commonly known as the post-Mao reforms.
    Keywords: market reforms; food prices; food security; food policies
    JEL: N0
    Date: 2016–02
  4. By: Xian Zhang; Ke Wang; Yu Hao; Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology); Jing-Li Fan
    Abstract: To reduce gasoline consumption and emissions, the Chinese government has introduced a series of preferential policies to encourage the purchase of New-Energy Vehicles (NEVs). However, enthusiasm for the private purchase of NEVs appears to be very low. This timely paper addresses the need for an empirical study to explore this phenomenon by identifying purchase motivations of potential NEV consumers and examining the impact of government policies introduced to promote NEVs in China. A questionnaire survey was carried out. The acceptance of NEVs is measured in three different Logistic models: the willingness of consumers to purchase NEVs, the purchasing time and the acceptable price, the establishment of three multivariate logistic regression models. The results showed that financial benefits, performance attributes, environmental awareness and psychological needs are the four most important factors influencing consumers¡¯ acceptance of NEVs. Among these, performance attributes rather than financial benefits is the most important indicator. The moderating effect of government policies to relations between purchasing intention, time and price is not strong as respected while the policy implications are clear that the ¡®public awareness of government policy¡¯ functions as a moderator in the process of acceptance. These findings could give some hints to the government to make better NEV industry policy.
    Keywords: New Energy Vehicles, Government Policy, Purchasing Motivations
    JEL: Q54 Q40
    Date: 2016–02–03
  5. By: Ting Wang
    Abstract: In this paper, I study the impact of employment growth in manufacturing on employ- ment in the non-tradable sector for prefecture-level cities in China. Using the 2000 and 2010 Censuses of Population, I apply the shift-share approach to isolate the exogenous change of employment growth in manufacturing and investigate its impact on the non- tradable sector. I find that adding ten manufacturing jobs creates 3.4 additional jobs in the non-tradable sector. I also show that the effect is heterogeneous along a number of dimensions. More specifically, one new job in high-technology manufacturing creates more jobs in the non-tradable sector while low-technology manufacturing employment growth has no significant multiplier effect. Among the non-tradable industries, the multiplier is the largest for wholesale, retail, and catering. Finally, I find that the eect is also geographically heterogeneous, with the multiplier being greater for inland regions.
  6. By: Sun, Lixin
    Abstract: In this paper, we estimate the dynamic equilibrium debt level for China’s non-financial corporates using an error correction model (ECM), and then analyse China’s corporate deleveraging and its consequence. Furthermore, we examine the effects of macroeconomic policies on China’s corporate deleveraging with a VAR model. The empirical results suggest that contractive monetary policy and fiscal policy rather than easy macroeconomic policies help reduce the non-financial corporate leverage in China.
    Keywords: Corporate Deleveraging; VAR/VEC Model; Dynamic Equilibrium Debt Level; Macroeconomic Policies; China’s Economy
    JEL: E32 E62 E63
    Date: 2016–01–28
  7. By: Lin, Carl (Bucknell University); Yun, Myeong-Su (Inha University)
    Abstract: The minimum wage has been regarded as an important element of public policy for reducing poverty and inequality. Increasing the minimum wage is supposed to raise earnings for millions of low-wage workers and therefore lower earnings inequality. However, there is no consensus in the existing literature from industrialized countries regarding whether increasing the minimum wage has helped lower earnings inequality. China has recently exhibited rapid economic growth and widening earnings inequality. Since China promulgated new minimum wage regulations in 2004, the magnitude and frequency of changes in the minimum wage have been substantial, both over time and across jurisdictions. The growing importance of research on the relationship between the minimum wage and earnings inequality and its controversial nature have sparked heated debate in China, highlighting the importance of rigorous research to inform evidence-based policy making. We investigate the contribution of the minimum wage to the well-documented rise in earnings inequality in China over the period from 2004 to 2009 by using city-level minimum wage panel data and a representative Chinese household survey, and we find that increasing the minimum wage reduces inequality – by decreasing the earnings gap between the median and the bottom decile – over the analysis period.
    Keywords: minimum wage, China, earnings inequality
    JEL: J31 J38 O15 R23
    Date: 2016–02

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