nep-cna New Economics Papers
on China
Issue of 2017‒02‒12
five papers chosen by
Zheng Fang
Ohio State University

  1. Rural Land Transfer and Financial Impact: Evidence from China By Jiang, Meishan; Paudel, Krishna; Mi, Yunsheng
  2. Against the Wind: China's Struggle to Integrate Wind Energy into Its National Grid By Long Lam; Lee Branstetter; Ines M. L. Azevedo
  3. The impact of global uncertainty on the global economy, and large developed and developing economies By Wensheng Kang; Ronald A. Ratti; Joaquin Vespignani
  4. Airports, Market Access and Local Economic Performance: Evidence from China By Stephen Gibbons; Wenjie Wu
  5. Estimating the Impact of Central Winter Heating on Air Quality in China By Wang, Meijuan

  1. By: Jiang, Meishan; Paudel, Krishna; Mi, Yunsheng
    Abstract: Land is the most valuable capital that farmers own. Land transfer can improve income of farmers through an optimal allocation of factors of production. The land transfer is not only transferring of the ownership but also transferring of the management rights. Chinese rural land system has its unique characteristics: ownership, contract, and management rights. Ownership rights are owned by collectives, farmers have contract management rights which are divided into management transfer rights and contract rights. Since 2008, farmers are provided with both land contract rights and land management transfer rights. This reform has provided farmers with financial opportunities to obtain revenues using different channels. Transferring-in land needs additional capital thereby causing demand effects, but transferring-out land allows farmers to earn income thereby causing supply effects. Land transfer also changes farmer’s agricultural investment and insurance behavior. This paper uses 2014 data from nine Chinese provinces to test farmers’ financial behavior change between land management rights transfer-out and transfer-in. Results from doubly-robust estimator with inverse probability weighting estimator, regression-adjustment, and propensity score matching indicate a significant difference of financial selection between land transfer-in farmers and land transfer-out farmers. Land market gives an unblocked transmission channel to rural financial market through mechanism innovation.
    Keywords: Key words: doubly-robust estimator, financial impact, land management right, land transfer-in, land transfer-out, International Development, Land Economics/Use, JEL Classification: C01, Q15,
    Date: 2017–02–18
  2. By: Long Lam (Carnegie Mellon University); Lee Branstetter (Peterson Institute for International Economics); Ines M. L. Azevedo (Carnegie Mellon University)
    Abstract: China launched an unprecedented wind farm construction boom a decade ago to expand renewable energy’s share of its primary energy by exploiting its considerable wind energy resources. On the surface these efforts appeared to yield great success, with China’s wind generating capacity growing more than 100-fold in less than 10 years. But close examination of its aggressive top-down approach to the promotion of renewable energy reveals that China has fallen far short of its ambitious goals. Turbines were quickly installed—but many of them were not connected to the power grid. After some turbines were connected, the state-owned enterprises that operate the national grid often refused to accept energy from them. These problems led to inefficiencies that are without precedent in the Western world. The authors find that although its installed wind energy capacity is 75 percent larger than that of the United States, China produces 14 percent less wind energy than the United States. Even in a political system with a strong centralized government, China’s push for renewable power faltered in the face of entrenched interests, weak incentives, and conflicting policy priorities.
    Date: 2017–01
  3. By: Wensheng Kang; Ronald A. Ratti; Joaquin Vespignani
    Abstract: Global uncertainty shocks are associated with a sharp decline in global inflation, global growth and in the global interest rate. Over 1981 to 2014 global financial uncertainty forecasts 18.26% and 14.95% of the variation in global growth and global inflation respectively. Global uncertainty shocks have more protracted, statistically significant and substantial effects on global growth, inflation and interest rate than U.S. uncertainty shocks. U.S. uncertainty lags global uncertainty by one month. When controlling for domestic uncertainty, the decline in output following a rise in global uncertainty is statistically significant in each country, with the exception of the decline for China. The effects for the U.S. and for China are also relatively small. For most economies, a positive shock to global uncertainty has a depressing effect on prices and official interest rates. Exceptions are Brazil, Mexico and Russia, economies with large capital outflows during financial crises. Decomposition of global uncertainty shocks shows that global financial uncertainty shocks are more important than non-financial shocks.
    Keywords: Global, Uncertainty Shocks, Monetary Policy, FAVAR
    JEL: D80 E44 E66 F62 G10
    Date: 2017–01
  4. By: Stephen Gibbons; Wenjie Wu
    Abstract: In this paper we study the effect of airports on local economic performance that arises from better access to domestic markets, using China's recent rapid air network expansion. We estimate the effects of the implied changes in access to population on measures of economic performance using a panel of counties built from administrative records and micro data on industrial firms. To mitigate endogeneity concerns we focus on a subsample of 'incidentally' affected counties, whose location midway between existing and new airports implies they not were explicitly targeted for development nor directly affected by airport operations. We also decompose market access into land-side and air-side components. Our key finding is that improved population access due to land-side distance reductions to airports increased industrial output and GDP, with an elasticity of around 0.25. An instrumental variables strategy exploiting conversion of historical military airports to civil use yields higher elasticities.
    Keywords: airports, infrastructure, productivity, China
    JEL: H54 O21 P25 R41
    Date: 2017–02
  5. By: Wang, Meijuan
    Abstract: We use a difference in difference model to examine the impact of central winter heating on air pollution in China. The estimation includes how does the winter heating affect (i) air quality, and (ii) hazard level of pollutants. Our data are daily Air Quality Index (AQI) records in mid-November when the heat is turned on and mid-March when heat is turned off in over 150 cities. Both Ordinary Least Square (OLS) and Ordered Logit model show that winter heating contributes significantly to air pollution, especially in the period when central heating is switched on. The central heating causes 51.3% higher AQI, and the air is 13% more likely to be hazardous to the sensitive group (hazard level=3). Northern cities are more polluted than southern ones. It is also found that air quality in cities with higher GDP per capita is better; population, number of cars and electricity used by industry also contribute to air pollution.
    Keywords: Air pollution, winter heating, Huai-River policy, urban development, Environmental Economics and Policy, Public Economics, Resource /Energy Economics and Policy, Q53, Q58, R1,
    Date: 2016

This nep-cna issue is ©2017 by Zheng Fang. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.