nep-cna New Economics Papers
on China
Issue of 2016‒11‒06
eleven papers chosen by
Zheng Fang
Ohio State University

  1. Urbanization and Rural Development in the People’s Republic of China By Chen, Zhao; Lu, Ming; Ni, Pengtu
  2. The Changing Pattern of China’s Economic Relations with Southeast Asia By Anne Booth
  3. A Real Estate Boom with Chinese Characteristics By Edward Glaeser; Wei Huang; Yueran Ma; Andrei Shleifer
  4. The Impact of Credit Constraints on the Performance of Chinese Agricultural Wholesalers By Lifang Hu; Lopez, Rigoberto A.; Yinchu Zeng
  5. China?s Carbon Emissions Report 2016 By Zhu Liu
  6. Trade Liberalization and Child Labor in China By Zhao, Liqiu; Wang, Fei; Zhao, Zhong
  7. The Chinese Food Industry: development, constraints and policies By Maria Bruna Zolin; Matilde Cassin
  8. Factions in Nondemocracies: Theory and Evidence from the Chinese Communist Party By Patrick Francois; Francesco Trebbi; Kairong Xiao
  9. Property Rights, Labor Mobility and Collectivization: The Impact of Institutional Changes on China’s Agriculture in 1950-1978 By Sun, Shengmin; Lopez, Rigoberto A.; Xiaoou Liu
  10. Spatial Estimation of the Nexus between the PRC’s Foreign Direct Investment and ASEAN’s Growth By Uttama, Nathapornpan Piyaareekul
  11. Looking Back on the Lessons of "Higher Education and Developing Countries: Peril and Promise": Perspectives on China and India By Bloom, David E.; Altbach, Philip G.; Rosovsky, Henry

  1. By: Chen, Zhao (Asian Development Bank Institute); Lu, Ming (Asian Development Bank Institute); Ni, Pengtu (Asian Development Bank Institute)
    Abstract: This paper presents research findings on how urbanization enhances productivity and economic growth in both urban and rural sectors. Through agglomeration effects, employment opportunities and income levels can largely increase. In addition, the mechanisms of sharing, matching, and learning are much stronger in cities, especially large cities. However, in the People’s Republic of China (PRC), urbanization lags far behind industrialization. Institutional barriers against rural-to-urban and interregional migration, such as the hukou system, have reduced the ability of urban growth to absorb rural labor. As for rural development, urbanization has propelled agricultural productivity, rural income, and consumption levels. Moreover, agricultural productivity is driven to a large extent by capital accumulation, through capital deepening and remittance. Agricultural organizations, urbanization, and outflow of migrant workers make it possible for large-scale production and agricultural mechanization to occur.
    Keywords: Urbanization; rural development; PRC; China; hukou system; productivity; economic growth; 都市化; 農村開発; 経済成長; 中国
    JEL: E23 O14 R11
    Date: 2016–10–31
  2. By: Anne Booth (Department of Economics, SOAS, University of London, UK)
    Abstract: This paper examines the debates which have arisen in the ten countries of ASEAN about the impact of growing trade and investment ties with China, both before and after the full implementation of the ASEAN-China Free Trade Agreement in 2010. It examines the changes which have taken place in the country composition of trade and investment flows within the ASEAN countries, and between the ASEAN countries, China, and the rest of the world. The evidence indicates that while merchandise trade values have increased between China and ASEAN since 2010, the increase has not been as rapid as some predicted. But China is now running a substantial trade surplus with the ASEAN countries; the value of exports from China to ASEAN exceed the value of imports to China from the ASEAN countries. This surplus could lead to frictions in the future. Investment flows from China to ASEAN are still small in relation to flows into ASEAN from the rest of the world.
    Keywords: ASEAN, China, Trade, Investment, Migration
    JEL: F55
    Date: 2016–10
  3. By: Edward Glaeser; Wei Huang; Yueran Ma; Andrei Shleifer
    Abstract: Chinese housing prices rose by over 10 percent per year in real terms between 2003 and 2014, and are now between two and ten times higher than the construction cost of apartments. At the same time, Chinese developers built 100 billion square feet of residential real estate. This boom has been accompanied by a large increase in the number of vacant homes, held by both developers and households. This boom may turn out to be a housing bubble followed by a crash, yet that future is far from certain. The demand for real estate in China is so strong that current prices might be sustainable, especially given the sparse alternative investments for Chinese households, so long as the level of new supply is radically curtailed. Whether that happens depends on the policies of the Chinese government, which must weigh the benefits of price stability against the costs of restricting urban growth.
    JEL: E60 G10 R21 R28 R31
    Date: 2016–10
  4. By: Lifang Hu (Renmin University of China); Lopez, Rigoberto A. (University of Connecticut); Yinchu Zeng (Renmin University of China)
    Abstract: Following market reforms and economic growth since the late 1970s, agricultural wholesale markets in China have developed substantially and become increasingly important in food distribution. This paper investigates the impact of credit constraints on the performance of agricultural wholesalers via a stochastic frontier approach (SFA) and a sample of 1,332 wholesalers nationwide. Empirical results show that relaxing credit constraints imposed by formal institutions results in an approximately 20-30 percent increase in the annual sales of agricultural wholesalers who are credit-constrained (40 percent of the sample). Credit constraints disproportionally impact the performance of micro and small wholesalers. Thus, policies aimed at providing credit access for these wholesalers would significantly boost the performance of smaller agricultural wholesalers while improving the functioning of these markets in China.
    Keywords: credit, credit access, agriculture, wholesalers, stochastic frontier, China
    JEL: Q14 Q13 O13
    Date: 2016–08
  5. By: Zhu Liu
    Abstract: Climate change driven by anthropengic carbon emissions is one of the most serious challenges facing human development. China is currently the world?s largest developing country, primary energy consumer, and carbon emitter. The nation releases one quarter of the global total of carbon dioxide (9.2 Gt CO2 in 2013), 1.5 times that from the US. Nearly three-quarters (73%) of the growth in global carbon emission between 2010 and 2012 occurred in China. Without mitigation, China?s emissions could rise by more than 50% in the next 15 years. Given the magnitude and growth rate of China?s carbon emissions, the country has become a critical partner in developing policy approaches to reduce global CO2 emissions.China is a country with significant regional differences in terms of technology, energy mix, and economic development. 1 Understanding the characteristics and state of regional carbon emissions within China is critical for designing geographically appropriate mitigation policies, including the provincial cap and trade system that is projected to be lanuched in 2017. In this study, I summarize the key features and drivers of China?s regional carbon emissions and conclude with suggestions for a low carbon policy for China.The principal findings are:Provincial aggregated CO2 emissions increased from 3 billion tons in 2000 to 10 billion tons in 2016. During the period, Shandong province contributed most to national emissions, followed by Liaoning, Hebei, and Shanxi provinces. Most of the CO2 emissions were from raw coal, which is primarily burned in the manufacturing and the thermal power sectors.Significant differences exist among provinces in terms of CO2 emissions. Analyses of per capita emissions and emission intensity indicate that provinces located in the northwest and north had higher per capita. CO2 emissions and greater emission intensities than the central and southeast coastal regions. Developing areas have intensive resource use and their economic structure is dominated by heavy industries with higher sectoral emission intensity. These areas contribute to most of the growth in national emissions and are the main drivers of China?s carbon intensive economic structure.An analysis of the factors that affect China?s CO2 emissions shows that technology heterogeneity is directly connected to China?s carbon growth. The dissimilar rate of adoption of energy efficient technologies among regions is a major barrier to China?s CO2 mitigation, and thus needs more attention from researchers and policy makers.
    Date: 2016–01
  6. By: Zhao, Liqiu (Renmin University of China); Wang, Fei (Renmin University of China); Zhao, Zhong (Renmin University of China)
    Abstract: This paper exploits a quasi-natural experiment – the U.S. granting of Permanent Normal Trade Relations (PNTR) to China after China's accession to the World Trade Organization – to examine whether trade liberalization affects the incidence of child labor in China. PNTR permanently set U.S. duties on Chinese imports at low Normal Trade Relations (NTR) levels and removed the uncertainty associated with annual renewals of China's NTR status. We find that the PNTR was significantly associated with the rising incidence of child labor in China. A one percentage point decrease in average export tariffs raises the odds of child labor by a 1.3 percentage point. The effects are greater for girls, older children, rural children, and children with less-educated parents. The effect of trade liberalization on the incidence of child labor, however, disappears in the long run, because trade liberalization can induce exporters to upgrade technology and thus have less demand for unskilled workers.
    Keywords: child labor, trade liberalization, trade policy uncertainty, difference-in-differences, China
    JEL: F14 F16
    Date: 2016–10
  7. By: Maria Bruna Zolin (Ca’ Foscari University of Venice, Department of Economics); Matilde Cassin (Ca’ Foscari University of Venice, Department of Economics)
    Abstract: Given the phenomenon of growing urbanization, the pressure on food demand for a rising population as well as changing diets, China has had to resort to imports, becoming a net importer of food. In absence of external flows, this scenario is set to continue and could then materialize in a future Malthusian scenario. Improved efficiency and productivity, reform of land use rights, but also the policy of "going out" or land grabbing are some of the plausible strategies that the country could improve to avoid an inexorable stabilization or, at worst, a decline in domestic production, as well taking into account the impact of climate change on agricultural commodities. Starting from these premises, the paper aims to analyze the existing scenario identifying constrains and policies that could prevent the development of the Chinese food industry.
    Keywords: Food demand, Food supply, China, Food industry, Food security, Food safety
    JEL: Q11 Q15 Q18 Q31 O13 R14
    Date: 2016
  8. By: Patrick Francois; Francesco Trebbi; Kairong Xiao
    Abstract: This paper investigates theoretically and empirically the factional arrangements and dynamics within the Chinese Communist Party (CCP), the governing political party of the People's Republic of China. Our empirical analysis ranges from the end of the Deng Xiaoping era to the current Xi Jinping presidency and covers the appointments of both national and provincial officials. We present a set of new empirical regularities within the CCP and a theoretical framework suited to model factional politics within single-party regimes.
    JEL: P3 P48
    Date: 2016–10
  9. By: Sun, Shengmin (Shandong University); Lopez, Rigoberto A. (University of Connecticut); Xiaoou Liu (Renmin University of China)
    Abstract: This paper evaluates the impact of property rights, labor mobility barriers and degrees of collectivization on China’s agricultural growth in 1950-1978. Using a semi-Bayesian stochastic frontier analysis, we find that collective production with free labor mobility and private property rights was the most efficient institutional setting. Although deviations from the two institutions resulted in a decline in agricultural production, the loss in agricultural production from labor mobility barriers was up to five times greater than loss from depriving farmers of private property rights.
    Keywords: economic growth, institutions, agriculture, property rights, labor mobility, China
    Date: 2016–04
  10. By: Uttama, Nathapornpan Piyaareekul (Asian Development Bank Institute)
    Abstract: Forging closer economic relations between the People’s Republic of China (PRC) and the Association of Southeast Asian Nations (ASEAN) over the last 2 decades has contributed to building a stronger ASEAN economy. It is particularly important to know how the PRC’s foreign direct investment responds to ASEAN’s economic performance. This study investigates the causal relationship between the PRC’s foreign direct investment and economic growth among the 10 ASEAN member countries from 1995 to 2013. Panel unit root tests, a spatial panel vector autoregressive model, and spatial Granger causality are employed as empirical techniques for spatial panel estimation. The empirical results reveal that the PRC’s direct investment in ASEAN caused economic growth in ASEAN, and economic growth in ASEAN resulted in the PRC’s direct investment in ASEAN. This finding raises potentially interesting external investment policy implications.
    Keywords: foreign direct investment; direct investment; investment; the People’s Republic of China; Association of Southeast Asian Nations; economic growth
    JEL: C33 F23 O47
    Date: 2016–11–01
  11. By: Bloom, David E. (Harvard University); Altbach, Philip G. (Boston College); Rosovsky, Henry (Harvard University)
    Abstract: In 2000, Higher Education in Developing Countries: Peril and Promise was published. This influential report, cosponsored by The World Bank and UNESCO, came at a time of transition in higher education worldwide and had some influence on higher education policy and thinking in several developing countries. This article looks at some of the main arguments in Peril and Promise. It focuses particularly on how two key countries, China and India, have developed in light of the key recommendations in Peril and Promise.
    Keywords: higher education, developing countries, higher education policy, peril and promise, China, India
    JEL: I25 I28 I29
    Date: 2016–10

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