nep-cna New Economics Papers
on China
Issue of 2017‒10‒08
seven papers chosen by
Zheng Fang
Ohio State University

  1. Do government transfers reduce poverty in China?: Micro evidence from five regions By Ben Westmore
  2. Capital Accumulation, Private Property and Rising Inequality in China, 1978-2015 By Thomas Piketty; Li Yang; Gabriel Zucman
  3. Food security, food safety and pesticides: China and the EU compared By Maria Bruna Zolin; Matilde Cassin; Ilda Mannino
  4. Imports and Intellectual Property Rights on Innovation in China By Chu, Angus C.; Shen, Guobing; Zhang, Xun
  5. Words vs. actions: International variation in the propensity to fulfil investment pledges in China By Abigail S. Hornstein
  6. Carbon emission effect of urbanization at regional level: Empirical evidence from China By Niu, Honglei; Lekse, William
  7. Trade effects of ASEAN-plus-China and -Japan free trade agreements by production stage and industry By Taguchi, Hiroyuki; Nishi, Emiko, Darcy

  1. By: Ben Westmore (OECD)
    Abstract: This paper estimates urban and rural poverty rates across five Chinese administrative regions (Shanghai, Liaoning, Guangdong, Henan and Gansu) in 2014 using representative household level data from the China Family Panel Studies survey. The types of government transfer payments that households in poverty received and the ability for such payments to lift households from poverty are also assessed. Consistent with official estimates, the results highlight substantial disparities in poverty rates between administrative regions. Smaller differences exist between urban and rural locations within the same administrative region. In 2014, the most common types of government transfer received by households in poverty were agricultural subsidies or social assistance - principally the dibao. Regarding the latter, the results suggest some improvement in payment targeting in rural areas, but most dibao recipients had income above the poverty line (as defined in this paper) in 2014. Furthermore, across all administrative regions, the vast majority of households living below the defined poverty line did not receive social assistance at that time.
    Keywords: China, development, poverty, social assistance policies
    JEL: I30 I32 I38 O53 R20 R28
    Date: 2017–10–04
  2. By: Thomas Piketty (Paris School of Economics); Li Yang (World Bank); Gabriel Zucman (University of California at Berkeley)
    Abstract: This paper combines national accounts, survey, wealth and fiscal data (including recently released tax data on high-income taxpayers) in order to provide consistent series on the accumulation and distribution of income and wealth in China over the 1978-2015 period. We find that the aggregate national wealth-income ratio has increased from 350% in 1978 to 700% in 2015. This can be accounted for by a combination of high saving and investment rates and a gradual rise in relative asset prices, reflecting changes in the legal system of property. The share of public property in national wealth has declined from about 70% in 1978 to 30% in 2015, which is still a lot higher than in rich countries (close to 0% or negative). Next, we provide sharp upward revision of official inequality estimates. The top 10% income share rose from 27% to 41% of national income between 1978 and 2015, while the bottom 50% share dropped from 27% to 15%. China’s inequality levels used to be close to Nordic countries and are now approaching U.S. levels.
    Date: 2017–04
  3. By: Maria Bruna Zolin (Department of Economics, University Of Venice Cà Foscari); Matilde Cassin (Department of Economics, University Of Venice Cà Foscari); Ilda Mannino (Venice International University)
    Abstract: To control pests that may damage crops during production, storage or transportation, chemical pesticides are usually used. On the one hand, the use of pesticides can help to reduce yield losses caused by pests, pathogens, and weeds and thereby help feed the world’s population; on the other hand, such agricultural practices can profoundly affect limited natural resources. Starting from these premises, the main objective of this paper is to explore the relationship between food security and food safety, while pointing out the role played in this relationship by pesticides, focusing on the case studies of the EU and China. To this purpose, the paper outlines the international framework on pesticides and the legal framework in the EU and China, analyzes pesticide markets, and considers the concerns related to their use. The overview of the situation in the EU and China allows us to identify challenges and opportunities for future developments in terms of food security and safety and food trade relationships between Europe and China. Tension and mutual disputes have occurred in the past due to increasing risks for consumers and workers handling pesticides, food scandals and difficulties in the mutual recognition of food quality certification schemes, which call for sustainable production methods.
    Keywords: Agriculture, Sustainability, Pesticides, Integrated Pest Management, Food security, Food safety, EU, China
    JEL: I18 N65 O13 O53 Q15 Q18 Q24 Q25
    Date: 2017
  4. By: Chu, Angus C.; Shen, Guobing; Zhang, Xun
    Abstract: In an open-economy R&D-based growth model with two intermediate production sectors, we find that strengthening intellectual property rights (IPR) has a positive effect on innovation in the sector that uses domestic inputs but both positive and negative effects on innovation in the sector that uses foreign inputs. We test these results using an empirical analysis of matching samples that combine Chinese provincial IPR data with industrial enterprises database and customs database.
    Keywords: Intellectual property rights; imports; knowledge spillovers; innovation
    JEL: F43 O31 O34
    Date: 2017–09
  5. By: Abigail S. Hornstein (Department of Economics, Wesleyan University)
    Abstract: We examine whether companies from certain countries are more likely to fulfil investment pledges. Using data on contracted and utilized FDI in China, we find that firms fulfil an average of 59% of their pledges within two years. The propensity to fulfil pledges is lower for firms from countries with greater uncertainty avoidance, power distance, and egalitarianism; higher if the source country is more traditional; and is unaffected by popular attitudes towards China. Prior literature has found that these cultural characteristics are associated with higher levels of utilized FDI. We extend this to show that announcements of planned corporate activity may be more reliable for firms from countries with certain cultures.
    Keywords: Foreign direct investment (FDI), China, Culture, Institutions, Policy
    JEL: F21 F23 G18 G31 Z13
    Date: 2017–07
  6. By: Niu, Honglei; Lekse, William
    Abstract: Historically, global urbanization has been an essential ingredient for national economic growth and beneficial social transformation. However, with the global urban population currently generating two-thirds of all carbon emissions, global policymakers are urging mayors and regional leaders to make difficult decisions to reduce the negative impacts of urbanization on the environment. The authors begin their examination of the implications of local and regional factors by applying the Dynamic Spatial Durbin Panel Model to empirically examine aspects of developing low-carbon strategies for the rapidly expanding size and number of the world's urban areas. Their results indicate that the contribution of urbanization to carbon emissions can be positively affected when regional policy makers collaborate to focus on spillover effects to simultaneously manage the scope, diversity, and complexity of economic and environmental issues from the perspective of creating a balance between rapid urbanization and relevant regional factors. Regional leaders can make a difference by creating both short-term goals and long-term strategies for maintaining low-carbon urbanization, nurturing regional coordination, monitoring and managing eco-friendly regional spillover effects, supporting low-carbon technology innovations, and maintaining optimal city size.
    Keywords: carbon emission effect,urbanization,local and regional focus,STIRPAT,dynamic spatial Durbin error model,panel data
    JEL: Q51 R11
    Date: 2017
  7. By: Taguchi, Hiroyuki; Nishi, Emiko, Darcy
    Abstract: This article examines the trade creation and diversion effects of ASEAN-Plus-China (ACFTA) and -Japan (AJFTA) free trade agreements with focuses on production stage and machinery industry by estimating the gravity trade model for the recent two decades between 1993 and 2015. The purpose for focusing on the trade flows by production stages (final goods and intermediate goods) and by industries (machinery and non-machinery) is to uncover the effects of ACFTA and AJFTA on the expanding international production networks in East Asia. The main findings are summarized as follows. First, regarding industry total, the trade creation effects of ACFTA and AJFTA are identified not in intermediate goods but in final goods. It might come from the larger tariff gaps between the Most Favored Nation (MFN) rates and the preferential rate for ASEAN in final goods than in intermediate goods, reflecting the structure of “tariff escalation”. Comparing the effects of ACFTA and AJFTA, the larger trade creation effects are found in ACFTA than in AJFTA, probably due to the larger tariff gaps with the higher MFN rates in China. As for machinery industry, the trade creation effects are verified on ACFTA probably due to the large tariff gaps with the still-existing high MFN in China, while no trade creation effects are found because of no tariff gaps with almost zero MFN rates in Japan.
    Keywords: ASEAN-plus-China and –Japan free trade agreement, Production stage, Machinery industry, trade creation and diversion effects
    JEL: F13 F14 O53
    Date: 2017–09

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.