nep-cna New Economics Papers
on China
Issue of 2017‒03‒19
five papers chosen by
Zheng Fang
Ohio State University

  1. Monetary Policy, Hot Money and Housing Price Growth across Chinese Cities By Xiaoyu Huang; Tao Jin; Ji Zhang
  2. State-Owned Enterprise in China: Reform, Performance, and Prospects By Gary Jefferson
  3. How Well Did Facts Travel to Support Protracted Debate on the History of the Great Divergence between Western Europe and Imperial China? By Deng, Kent; O'Brien, Patrick
  4. China’s changing economy: implications for its carbon dioxide emissions By Fergus Green; Nicholas Stern
  5. Environmental regulations and competitiveness: evidence based on Chinese firm data By Ankai Xu

  1. By: Xiaoyu Huang; Tao Jin; Ji Zhang
    Abstract: We use a dynamic hierarchical factor model to identify the national, regional, and local factors of the city-level housing price growth in China from 2005 to 2014. We find that city-specific factors account for a large proportion of the variations in city-level housing price growth for most cities. However, the national factor also plays an important role in explaining the fluctuations of city-level housing price growth rates especially after 2009---the average explaining power of the national factor for housing price growth fluctuations reaches 18%. We use a VAR model to investigate the driving forces of the national factor and find that unexpected PBoC policy and hot money flow changes can affect the national housing prices significantly. A positive monetary policy shock has a significant negative impact on the national factor, which lasts for more than two years. Meanwhile, a positive hot money shock does cause a significant increase in the national factor. However, this effect is relatively transitory and reverses in half a year. Monetary policy also affects the national factor by responding positively to positive hot money and price shocks---the reversed effect of hot money shocks and the negative impact of positive price shocks on the national factor result from the tightening of monetary policy triggered by these shocks.
    Date: 2017–03
  2. By: Gary Jefferson (Brandeis University)
    Abstract: State-owned enterprise reform in China has travelled a long and uneven road. Throughout, its key driver has been the introduction of competition across China’s transforming economy, both the surge of new forms of domestic ownership and the ever-expanding access to technology and business methods from abroad. By highlighting the commons/public-good character of China’s SOEs, this paper underscores the importance of a clear Coasian assignment of property rights and reduced transaction costs. The paper then reviews the three stages of the reform of China’s state sector over the past 30 years, drawing on the literature that describes the intentions, achievements, and shortcomings of China’s reform program. Finally, the paper reviews the 2015 reform Guidelines and the recent literature assessing these guidelines, including their intent to clearly distinguish between the public service and commercial mission of individual SOEs, so that state-owned firms can be more rigorously accountable to their fiduciary responsibilities. Arguably, the key issue for China’s successful SOE reform is whether successful reform of China’s state sector can be achieved at the firm level on a firm-by-firm basis or if, instead, it can only be achieved through deep institutional and political reform.
    Date: 2016–08
  3. By: Deng, Kent; O'Brien, Patrick
    Abstract: This paper tackles the issue of how reliable the currently circulated 'facts' really are regarding the 'Great Divergence' debate. Our findings indicate strongly that 'facts' of premodern China are often of low quality and fragmented. Consequently, the application of these 'facts' can be misleading and harmful.
    Keywords: Great Divergence, evidence, GDP estimates
    JEL: N01 P5
    Date: 2017–02–01
  4. By: Fergus Green; Nicholas Stern
    Abstract: As China’s government finalises the country’s 13th Five Year Plan for economic development (2016–2020), this article takes stock of recent changes in China’s economy and energy system since the turn of the century, and looks ahead to the likely trajectory of China’s emissions over the next decade. The period 2000–2013, it is now clear, was a distinct and exceptional phase in China’s developmental history, during which the very high levels of greenhouse gases emitted were linked closely with the energy-intensive, heavy industry-based growth model pursued at that time. China is currently undergoing another major structural transformation — towards a new development model focused on achieving better quality growth that is more sustainable and inclusive — and it is also grappling with economic challenges associated with the transition. Data from 2014 and the first three quarters of 2015 illustrate the extent of these changes. Based on analysis of this data in light of the underlying changes occurring in China’s economy and policy, this article provides an updated forecast of the Kaya components of energy CO2 emissions (GDP, energy/GDP and CO2/energy) over the next decade to 2025. It concludes that China’s CO2 emissions from energy, if they grow at all, are likely to grow much slower than under the old economic model and are likely to peak at some point in the decade before 2025.
    Keywords: Carbon dioxide; China; coal; economy; emissions; energy; GDP
    JEL: N0
    Date: 2016
  5. By: Ankai Xu
    Abstract: This paper provides empirical evidence in support of the Porter hypothesis that tighter environmental regulations can increase productivity under certain circumstances. It builds on a theoretical model in which environmental regulations induce firms to adopt more efficient technologies. Using Chinese firm-level data covering a ten-year period, the empirical study examines the effects of two specific policy instruments - the pollution levy and regulatory standards - on firm productivity. It finds a bell-shaped relationship between pollution levies and the total factor productivity of firms, indicating that an increase in the pollution levy rate can be associated with higher productivity. In addition, the study investigates the effect of pollution emission standards on firm productivity and identifes an initial negative effect which diminishes after a period of two to three years.
    Keywords: Environmental regulations, Innovation, Productivity, Porter hypothesis, China.
    JEL: D2 F18 Q52 Q55 Q56
    Date: 2016–12–15

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