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on China |
| By: | Chia-Lin Chang (Department of Applied Economics, Department of Finance, National Chung Hsing University, Taiwan); Te-Ke Mai (Department of Economics, National Tsing Hua University, Taiwan); Michael McAleer (Department of Finance, Asia University, Taiwan) |
| Abstract: | The purpose of the paper is to provide a clear mechanism for determining carbon emissions pricing in China as a guide to how carbon emissions might be mitigated to reduce fossil fuel pollution. The Chinese Government has promoted the development of clean energy, including hydroelectric power, wind power, and solar energy generation. In order to involve companies in carbon emissions control, a series of regional and provincial carbon markets have been established since 2013. Since China’s carbon market was established in 2013 and mainly run domestically, and not necessarily using market principles, there has been almost no research on China’s carbon price and volatility. This paper provides an introduction to China’s regional and provincial carbon markets, proposes how to establish a national market for pricing carbon emissions, discusses how and when these markets might be established, how they might perform, and the subsequent prices for China’s regional and national carbon markets. Power generation in manufacturing consumes more than other industries, with more than 40% of total coal consumption. Apart from manufacturing, the northern China heating system also relies on fossil fuels, mainly coal, which causes serious pollution. In order to understand the regional markets well, it is necessary to analyze the energy structure in these regions. Coal is the primary energy source in China, so that provinces that rely heavily on coal receive a greater number of carbon emissions permits from the Chinese Government. In order to establish a national carbon market for China, a detailed analysis of eight important regional markets will be presented. The four largest energy markets, namely Guangdong, Shanghai, Shenzhen and Hubei, traded around 82% of the total volume and 85% of the total value of the seven markets in 2017, as the industry structure of the western area is different from that of the eastern area. The China National Development and Reform Commission has proposed a national carbon market, which can attract investors and companies to participate in carbon emissions trading. This important issue will be investigated in the paper. |
| Keywords: | Pricing Chinese Carbon Emissions; National Pricing Policy; Energy; Volatility; Energy Finance; Provincial Decisions |
| JEL: | C22 C58 G12 Q48 |
| Date: | 2018–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20180001&r=cna |
| By: | Song, Zheng (Michael); Xiong, Wei |
| Abstract: | Motivated by growing concerns about the risks and instability of China’s financial system, this article reviews several commonly perceived financial risks and discusses their roots in China’s politico-economic institutions. We emphasize the need to evaluate these risks within China’s unique economic and financial systems, in which the state and non-state sectors coexist and the financial system serves as a key tool of the government to fund its economic policies. Overall, we argue that: (1) financial crisis is unlikely to happen in the near future, and (2) the ultimate risk lies with China’s economic growth, as a vicious circle of distortions in the financial system lowers the efficiency of capital allocation and economic growth and will eventually exacerbate financial risks in the long run. |
| JEL: | E02 G01 |
| Date: | 2018–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofitp:2018_001&r=cna |
| By: | Bing Xu (Banco de España) |
| Abstract: | By allowing large classes of movable asstes to be used as collateral, the Property Law reform transformed the secured transactions in China. Difference-in-differences test show fi rms operating with ex-ante more movable assets expand access to bank credit and prolong debt maturity. However, the reform does not seem to improve the effi ciency of credit allocation, as debt capacity of ex-ante low quality fi rms expands the most following the reform. Credit expansion also does not lead to better fi rm performance. These findings are not driven by confounding factors such as improvements in creditor and property rights protection. Our results also cannot be explained by other important reforms which were introduced around the same time as the introduction of the Property Law. These include anti-tunneling and split-share reforms and amendments to the corporate tax structure in China. We conduct explicit robustness tests for these other reforms and hence contribute to the empirical literature on the reform process in China with new findings. |
| Keywords: | Collateral, movable assets, leverage, property law |
| JEL: | G21 G28 G32 K22 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1750&r=cna |
| By: | Xue, Jianpo; Yip, Chong K. |
| Abstract: | This paper examines the effects of China's One Child Policy (OCP) in a stylized unified growth model where demographic change plays a central role. Introducing a population constraint into Galor and Weil (2000) model, our theoretical analysis shows that parents are willing to invest in the education of their children immediately after the OCP intervention. Raising the education level, in turn, boosts rates of technological progress and economic growth over the short run, but the low population mass resulting from the OCP hampers the natural economic evolution. This eventually reduces the education gain and technology growth, retarding economic growth in the steady state. We next calibrate our model to match the key data moments in China. A permanent OCP is found to accelerate economic growth by up to 60% over the short run (40 years, or two generations under our assumed generation length), but depress long-run growth to 6:95% (8:94% under natural evolution). For a temporary OCP lifted after two generations, the economic growth shows an immediate decline of about 27%, followed by a gradual recovery to the steady state under natural evolution. While the OCP reduces welfare, the welfare loss from a temporary OCP is less than that from a permanent OCP. This suggests that the recent decision of the Chinese government to abandon the OCP and move to a two-child policy is likely to improve economic growth and welfare over the long run. |
| JEL: | J13 O43 |
| Date: | 2017–12–29 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofitp:2017_022&r=cna |
| By: | Chia-Lin Chang (Department of Applied Economics, Department of Finance, National Chung Hsing University, Taiwan); Shu-Han Hsu (Department of Applied Economics, National Chung Hsing University, Taiwan); Michael McAleer (Asia University, Taiwan) |
| Abstract: | The number of Chinese tourists visiting Taiwan has been closely related to the political relationship across the Taiwan Strait. The occurrence of political events and disasters or accidents have had, and will continue to have, a huge impact on the Taiwan tourism market. To date, there has been relatively little empirical research conducted on this issue. In this paper, tourists are characterized as being involved in one of three types of tourism: group tourism (group-type), individual tourism (individual-type), and medical cosmetology (medical-type). We use McAleer’s (2015) fundamental equation in tourism finance to examine the correlation that exists between the rate of change in the number of tourists and the rate of return on tourism. Second, we use the event study method to observe whether the numbers of tourists have changed abnormally before and after the occurrence of major events on both sides of the Strait. Three different types of conditional variance models, namely, GARCH (1,1), GJR (1,1) and EGARCH (1,1), are used to estimate the abnormal rate of change in the number of tourists. The empirical results concerning the major events affecting the changes in the numbers of tourists from China to Taiwan are economically significant, and confirm which types of tourists are most likely to be affected by such major events. |
| Keywords: | Event study; Abnormal rate of change; Chinese tourists; OLS; GARCH; GJR; EGARCH; Tourism finance. |
| JEL: | G14 C22 C52 C58 |
| Date: | 2018–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20180003&r=cna |
| By: | Yiwen Chen (CREA, Université du Luxembourg) |
| Abstract: | This paper examines whether the decision of migrant parents on children’s migration affect their school performance. Empirical evidence based on the 2009 wave of the Rural-Urban Migration Survey in China (RUMiC) data suggests that migrant children outperform left-behind children, especially for Chinese test scores. Further analysis interacting children’s migration status with their age shows that, in terms of school performance, younger children having migrated with parents to the city have advantage over their leftbehind counterparts in rural hometown, but this gap disappears with the age of children. Among children in junior high school, school performance of left-behind children are better than that of migrant children. |
| Keywords: | Chinese internal migrant workers; left-behind children; migrant children; school performance |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:18-02&r=cna |
| By: | Robert C. Feenstra; Hong Ma; Yuan Xu |
| Abstract: | We examine the employment responses to import competition from China and to global export expansion from the United States, both of which have been expanding strongly during the past decades. We find that although Chinese imports reduce jobs, at both the industry level and the local commuting zone level, the global export expansion of US products also creates a considerable number of jobs. On balance over the entire 1991-2007 period, job gains due to changes in US global exports were slightly less than job losses due to Chinese imports. Using data at both the industry level and the commuting zone level, we find a net loss of around 0.2-0.3 million jobs. When we extend the analysis to 1991-2011, we find the net job effect of import and export exposure is roughly balanced at the commuting zone level. |
| JEL: | F14 F16 J23 R23 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24056&r=cna |
| By: | Alicia Garcia-Herrero (Chief Economist for Asia Pacific, NATIXIS; Department of Economics , The Hong Kong University of Science and Technology; Institute of Emerging Market Studies, The Hong Kong University of Science and Technology); Jianwei Xu (Beijing Normal University) |
| Abstract: | This paper makes a mid-term assessment for China’s Belt and Road Initiative (BRI) from the perspective of trade, investment and finance, respectively. We will discuss the economic progress of the Belt and Road Initiative from the trade, investment and financial perspectives, respectively. Trade is most accessible field for China to breakthrough as it can be instantly affected by short-term policies such as removing tariff or non-tariff barriers. Our findings also confirm the rapid progress in trade, though the development was not equally distributed in the area, with the ASEAN, Middle East, South Asia and Russia constitute the largest trade share with China. Our analysis on the BRI’s spillover effect on the US and the EU reveals that the BRI plan poses actually very little substitution effect but under some scenarios even positive impact on the EU-China trade. We especially assess the impacts on the EU, which sits at the other end of the BRI area, and find that better connectedness within the BRI area will bring higher economic benefits to the EU than free trade agreements. |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:hku:wpaper:201850&r=cna |