nep-cna New Economics Papers
on China
Issue of 2017‒07‒30
four papers chosen by
Zheng Fang
Ohio State University

  1. The Economic Burden of Chronic Diseases: Estimates and Projections for China, Japan and South Korea By Bloom, David E.; Chen, Simiao; Kuhn, Michael; McGovern, Mark E.; Oxley, Les; Prettner, Klaus
  2. The Financing of Local Government in China: Stimulus Loan Wanes and Shadow Banking Waxes By Zhuo Chen; Zhiguo He; Chun Liu
  3. What does demand heterogeneity tell us about health care provider choice in rural China? By Martine AUDIBERT; Yong HE; Jacky MATHONNAT
  4. Giant and dwarf - China's two faces in wind energy innovation By Gandenberger, Carsten

  1. By: Bloom, David E. (Harvard University); Chen, Simiao (Harvard School of Public Health); Kuhn, Michael (Vienna Institute of Demography); McGovern, Mark E. (Queen's University Belfast); Oxley, Les (University of Waikato); Prettner, Klaus (University of Hohenheim)
    Abstract: We propose a novel framework to analyse the macroeconomic impact of non-communicable diseases. We incorporate measures of disease prevalence into a human capital augmented production function, which enables us to determine the economic costs of chronic health conditions in terms of foregone gross domestic product (GDP). Unlike previously adopted frameworks, this approach allows us to account for i) variations in human capital for workers in different age groups, ii) mortality and morbidity effects of non-communicable diseases, and iii) the treatment costs of diseases. We apply our methodology to China, Japan, and South Korea, and estimate the economic burden of chronic conditions in five domains (cardiovascular diseases, cancer, respiratory diseases, diabetes, and mental health conditions). Overall, total losses associated with these non-communicable diseases over the period 2010-2030 are $16 trillion for China (measured in real USD with the base year 2010), $5.7 trillion for Japan, and $1.5 trillion for South Korea. Our results also highlight the limits of cost-effectiveness analysis by identifying some intervention strategies to reduce disease prevalence in China that are cost beneficial and therefore a rational use of resources, though they are not cost-effective as judged by conventional thresholds.
    Keywords: non-communicable diseases, human capital, health interventions, aggregate output, ageing, East Asia
    JEL: H51 I15 I18 J24 O11
    Date: 2017–07
  2. By: Zhuo Chen; Zhiguo He; Chun Liu
    Abstract: China’s four-trillion-yuan stimulus package fueled by bank loans in 2009 has led to the rapid growth of shadow banking activities in China after 2012. The local governments in China financed the stimulus plan mainly through bank loans in 2009, and resorted to non-bank debt financing after 2012 given the mounting rollover pressure from bank debt coming due, a manifestation of the stimulus-loan-hangover effect. Cross-sectionally, provinces with abnormally greater bank loan growth in 2009 experienced more Municipal Corporate Bonds issuance during 2012-2015, as well as more shadow banking activities including Entrusted loans and Wealth Management Products. We highlight the market forces behind the regulation changes on local government debt post 2012, together with the expedited reform on interest rate liberalization during that period.
    JEL: F62 F63 G23 O16 O17 O53
    Date: 2017–07
  3. By: Martine AUDIBERT (FERDI); Yong HE (FERDI); Jacky MATHONNAT (Cerdi - Université d'Auvergne)
    Abstract: The objective of this paper is twofold: 1) to fill the gap in the health care literature with the estimation of the price and distance effects on health care provider choices by households in the presence of varying demand heterogeneity, 2) to contribute to estimation robustness by confronting the performance of the mixed multinomial logit (MMNL) and the multinomial logit (MNL). We built a database of two samples of patients surveyed within the same regions in rural China over a time interval of 18 years, and presumed varying demand heterogeneity due to income increase and people aging. We find that while the mean price and distance negative effects on patients choice were present in both time periods, their differences in heterogeneity, which were confirmed with the MMNL, could have crucial importance in avoiding erroneous policy making based merely on mean price and distance effects. We also find that while both the MNL and the MMNL are able to predict price and distance effects with low heterogeneity, only the MMNL appears able to detect the price effect when heterogeneity is high. This finding has policy implications and suggests using caution when interpreting estimation results with the MNL in cases of high heterogeneity.
    Keywords: price effect, distance effect, health care choice, preference heterogeneity, multinomial and mixed logit model, estimation robustness, Chinese rural households
    JEL: D1 C5 I1
    Date: 2017–07
  4. By: Gandenberger, Carsten
    Abstract: A functional analysis of the TIS for wind energy in China has revealed a great disparity in performance with respect to different functions of innovation. A particular strength of the Chinese TIS is the rapid diffusion of wind power equipment which presupposes the development of domestic production capabilities, the successful adoption of existing technology, the creation of markets and legitimacy as well as the ability to mobilize financial resources. Furthermore, Chinese universities and research institutes have quickly expanded their capabilities in the area of basic research. In contrast, China's performance in the area of applied research is mixed. Although the growth in the number of transnational and domestic wind energy patents indicates that China is now among the most inventive countries in the world, a more detailed analysis suggests that inventions are less focused on the most relevant technology subfields and that Chinese firms are reluctant to engage in innovation. The most prominent drawback of the centralized planning approach in China are governance deficits relating to the integration of wind energy into China's electricity grid as well as to the lack of complementary infrastructure for energy transmission and storage. These deficits result in high curtailment rates, low incentives for quality oriented innovation, and a low overall efficiency of wind energy in China.
    Keywords: Technological Innovation System,Functions of Innovation,China,Wind Energy
    Date: 2017

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