nep-cna New Economics Papers
on China
Issue of 2017‒11‒19
eight papers chosen by
Zheng Fang
Ohio State University

  1. Misallocation, Selection and Productivity: A Quantitative Analysis with Panel Data from China By Tasso Adamopoulos; Loren Brandt; Jessica Leight; Diego Restuccia
  2. Rebalancing in China: a taxation approach By Damien Cubizol
  3. Revisiting Gender Differences in Ultimatum Bargaining: Experimental Evidence from the US and China By Shuwen Li; Xiandong Qin; Daniel Houser
  4. China's Economic Ties with Southeast Asia By Oh, Yoon Ah
  5. Profit or Environment? A System Dynamic Model Analysis of Waste Electrical and Electronic Equipment Management System in China By Qinxin Guo; Enci Wang; Yongyou Nie; Junyi Shen
  6. Trade exposure of Western Europe to China and Eastern Europe: A spatial econometric analysis of the effects on regional manufacturing employment from 1991-2011 By Badinger, Harald; Reuter, Wolf Heinrich
  7. Study on Modernization of Transport Governance Systems in China By Su, Fengming
  8. Chinese Industrial Development and Policy Adjustment in Anaphase of Industrialization By Xu, Jianwei

  1. By: Tasso Adamopoulos; Loren Brandt; Jessica Leight; Diego Restuccia
    Abstract: We use household-level panel data from China and a quantitative framework to document the extent and consequences of factor misallocation in agriculture. We find that there are substantial frictions in both the land and capital markets linked to land institutions in rural China that disproportionately constrain the more productive farmers. These frictions reduce aggregate agricultural productivity in China by affecting two key margins: (1) the allocation of resources across farmers (misallocation) and (2) the allocation of workers across sectors, in particular the type of farmers who operate in agriculture (selection). We show that selection can substantially amplify the static misallocation effect of distortionary policies by affecting occupational choices that worsen the distribution of productive units in agriculture.
    Keywords: Agriculture, misallocation, selection, productivity, China.
    JEL: O11 O14 O4 E02 Q1
    Date: 2017–11–13
  2. By: Damien Cubizol (Univ Lyon, CNRS, GATE L-SE UMR 5824, F-69130 Ecully, France)
    Abstract: The rebalancing of the Chinese economy is analyzed through a heterogeneous taxation of various types of firms. Based on a two-country dynamic general equilibrium model, the paper applies tax reforms to raise consumption, reduce some firms' overinvestment and maintain a high level of welfare. To rebalance consumption and investment, taxation may allow reallocating a part of the labor force to firms that are not overinvesting. Moreover, the correction of distortions in production factor costs (capital and labor) is necessary during certain reforms applied in the model; that is, on the one hand, higher credit costs for State-Owned Enterprises (SOEs) and, on the other hand, a catch-up of foreign firms' wages by domestic firms (public and private). In this model, firms' credit cost is a key channel because it impacts both firms' investment and household consumption (through returns on savings). These consumption and investment reforms bring welfare benefits to households, and the results are close to direct welfare maximization. In this framework, the rebalancing of the domestic demand does not require the readjustment of the external financial position because the aggregate savings rate remains high and the supply of domestic assets is reduced. Finally, another theoretical framework proposes a heterogeneous taxation of consumption across home and foreign goods to enhance consumption.
    Keywords: The Chinese economy, tax reforms, financial intermediation, consumption, investment, welfare, foreign assets
    JEL: F20 F30 H20 H30 P20 P30
    Date: 2017
  3. By: Shuwen Li (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Xiandong Qin (Department of Applied Economics, Shanghai Jiao Tong University); Daniel Houser (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University)
    Abstract: We report results from a replication of Solnick (2001), which finds using an ultimatum game that, in relation to males, more is demanded from female proposers and less is offered to female responders. We conduct Solnick’s (2001) game using participants from a large US university and a large Chinese university. We find little evidence of gender differences across proposer and responder decisions in both locations. We do however find that, in comparison to Chinese participants, US proposers are more generous, while US responders are more demanding.
    Keywords: gender differences, cultural differences, laboratory experiment, ultimatum game, bargaining
    JEL: C78 C92 J16 Z10
    Date: 2017–10
  4. By: Oh, Yoon Ah (Korea Institute for International Economic Policy)
    Abstract: In recent years, China has emerged as a key partner of Southeast Asia across trade, investment, and infrastructure development. Bilateral trade reached $395 billion in 2015, accounting for 15 percent of Southeast Asia's external trade and making China the region's top trading partner. The trade flows are strongly influenced by an extensive regional production network established across East Asia where China used to be the processing hub but now it is expanding its role to supply parts and components to Southeast Asia. China is the fourth-largest investor in Southeast Asia, although it only accounts for 7 percent of SEA's inbound FDI flows in 2011-2015. Its FDI flows to the region reached $6.4 billion in 2015. Infrastructure development is the most visible area of China's rising economic influence in Southeast Asia. Inadequate infrastructure is the major obstacle to accelerated and sustained economic growth in the region and China's infrastructure development initiative provides a new and unprecedented momentum for tackling this challenge. External partners need to respond to the changing economic landscape in Southeast Asia proactively and constructively. China's deeper engagement in Southeast Asia may place competitive pressures on other foreign businesses and development partners, yet this may create more market opportunities and better infrastructure for everyone. External partners also need to pay greater attention to labor and environmental standards compliance in its FDI and infrastructure development in the region, taking lessons from some of the backlashes against China's investment activities. Finally, external partners and Southeast Asia share mutual interests in diversifying their economic relations away from over-dependency on China, as recent economic and security events have clearly suggested.
    Keywords: China; Southeast Asia; Trade; FDI; Infrastructure Development
    Date: 2017–09–18
  5. By: Qinxin Guo (Graduate School of Economics, Kobe University, Japan); Enci Wang (School of Economics, Shanghai University, China); Yongyou Nie (School of Economics, Shanghai University, China); Junyi Shen (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan, and School of Economics, Shanghai University, China)
    Abstract: In the past decade, sales of electrical and electronic equipment have undergone explosive growth worldwide, while at the same time, the life cycles of electrical and electronic equipment have been getting shorter. This has resulted in large numbers of waste electrical and electronic equipment (WEEE) being generated, which causes serious environmental problems that each country has to face. In this paper, we use the system dynamic method to analyze how China’s “WEEE processing fund” policy, wherein levies or subsidies are set on appropriate targets, influences the economic and environmental conditions of participants in the WEEE management system. The simulations results suggest that the “WEEE processing fund” policy could improve the economic status of those receiving subsidies without losing the economic revenue from levies and improve the entire system’s ability to recover and process waste equipment.
    Keywords: Waste electrical and electronic equipment management, Waste electrical and electronic equipment processing fund, System dynamic model, Economic and environmental effects, China
    Date: 2017–11
  6. By: Badinger, Harald; Reuter, Wolf Heinrich
    Abstract: This study analyzes the effects of increased trade with China and Eastern Europe on manufacturing employment in 1,146 NUTS-3 regions of 17 Western European countries from 1991 to 2011. Building on Autor et al. (2013) we aim at identifying the causal effects of an increase in import and export exposure on regional manufacturing employment, thereby, explicitly accounting for labor and product market spillovers. Overall, our results support previous findings of a negative effect of increased import exposure from China for our sample of Western European countries, whereas spatial spillover effects turn out to be positive, slightly mitigating the quantitative impact without changing results quantitatively. Moreover, our cross-country study highlights the pronounced heterogeneity of the estimated effects of trade exposure on manufacturing employment across countries with respect to the trade balance.
    Keywords: International Trade,Globalization,Western Europe,China,Eastern Europe,Employment
    JEL: F16 J31 R11
    Date: 2017
  7. By: Su, Fengming (Institute of Comprehensive Transportation)
    Abstract: The study is to outline an appropriate governance system for transport in China in order to further improve quality of transport system for the next stage. The development process of transport governance system in China is analyzed with the general economic reform and the setting of a Super-Ministry for transport in the background, so as to identify related problems. In addition to this, benchmarking of the USA, Japan etc. is done to provide references. Considering future development, an appropriate modern governance system for transport in China is suggested. The governance system should include multiple subjects, including governments, enterprises, social organizations and residents' autonomous organizations etc. And the mechanism of transport governance will transfer from an administrative system to a cooperative system.
    Keywords: Modernization of Transport Governance Systems; China
    Date: 2017–11–08
  8. By: Xu, Jianwei (National Development & Reform Commission (NDRC)
    Abstract: Through nearly forty years rapid development, China has entered the anaphase of industrialization. With the changes of factor conditions and development environment, the traditional industrial development model is encountering serious bottleneck restriction. Meanwhile, the growth power of industry tends to weaken gradually. The thirteenth five-year plan period is the key period of realizing industrialization. Industrial development formation will experience deep adjustment not only including the changes of proportion and speed, but also including the changes of industrial structure, development mode and driving factors. Therefore, the government should timely adjust industrial policy, focus on accumulation of innovation elements and optimization of innovation environmental, and allow the market to play a decisive role in resource allocation.
    Keywords: China; industrialization; industrial adjustment; Anaphase of Industrialization
    Date: 2017–11–08

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