nep-cna New Economics Papers
on China
Issue of 2018‒04‒09
six papers chosen by
Zheng Fang
Ohio State University

  1. What Can We Learn about U.S.-China Trade Disputes from China’s Past Trade Retaliations? By Minghao Li; Wendong Zhang; Chad E. Hart
  2. Does Marital Status Affect How Firms Interpret Job Applicants' Un/Employment Histories? By Maurer-Fazio, Margaret; Wang, Sili
  3. Will China Collapse: A Review, Assessment And Outlook By Xiang Xu; Alice Siqi Han
  4. Public education expenditure, institution development, and regional innovations: An empirical evidence from China By Li, Chenhui; Lian, Xubei; Zhang, Zhi
  5. A Dangerous Alliance? The Relationship Between Ecuador and China By Salvatore Monni; Luca Serafini
  6. Trade Liberalization and Economic Development: Evidence from China's WTO Accession By Andrei Potlogea; Wenya Cheng

  1. By: Minghao Li; Wendong Zhang (Center for Agricultural and Rural Development (CARD)); Chad E. Hart (Center for Agricultural and Rural Development (CARD))
    Abstract: With the United States exporting over $24.1 billion worth of agricultural and related products to China every year, it is difficult to overestimate the importance of the trade relationship. This is why the trade issues that are currently brewing between the United States and China are making stakeholders in the U.S. agricultural industry nervous, fearing that agricultural products will be the target for China’s retaliatory measures. Just last week, China announced that it may enact 15% tariff on ethanol and 25% tariff on pork products in response to the U.S. steel and aluminum tariffs. In this article, we hope to shed light on some key guiding principles of China’s potential actions in the future by analyzing previous agricultural trade retaliations involving the United States and other countries. We argue that China’s previous choices of retaliation targets follow three principles: targeting products that are proportional in trade value, targeting products that are substitutable, and targeting products that inflict economic and political cost. Since the U.S. steel and aluminum tariffs only affects about $3 billion-worth Chinese exports and U.S. soybean exports exceeds $12 billion, soybeans is not part of China’s response this round because of the proportional retaliation principle. However, U.S. soybean exports, despite its critical significance to China and difficulties to substitute or displace, might be brought into the trade drama if the new proposed tariff on $50 billion Chinese goods are enacted.
    Date: 2018–03
  2. By: Maurer-Fazio, Margaret (Bates College); Wang, Sili (Columbia University)
    Abstract: This field experiment explores whether single and married female job candidates' un/employment histories differentially affect their chances of obtaining interviews through China's Internet job boards. It also considers whether firms' discrimination against, and/or preference for, candidates who are un/employed vary with the duration of unemployment spells. Resumes of fictitious applicants are carefully crafted in terms of realistic work histories and educational backgrounds. Candidates' experiences of unemployment and declaration of marital status are carefully controlled. Over 7000 applications are submitted to real job postings. Callbacks are tracked and recorded. Linear probability models are employed to assess the effects of particular resume characteristics in terms of obtaining interviews. The marital status of female candidates affects how recruiters screen their applications. While current spells of unemployment, whether short- or long-term, significantly reduce married women's chances of obtaining job interviews in the Chinese context, they strongly increase the likelihood that single women will be invited for interviews. Chinese firms appear to "forgive" long-term gaps in women's employment histories as long as those gaps are followed by subsequent employment. This paper is the first to explore how marital status affects the ways that firms, when hiring, interpret spells of unemployment in candidates' work histories. It is also the first to explore the effects of both marital status and unemployment spells in hiring in the context of China's dynamic Internet job board labor market.
    Keywords: field experiments, unemployment, discrimination in employment, hiring, chinese labor markets, internet job boards, résumé correspondence audit study, marital status
    JEL: C93 J71 J23 O53
    Date: 2018–02
  3. By: Xiang Xu; Alice Siqi Han
    Abstract: Since the dissolution of the Soviet Union, China’s economic and political stabilities have been repeatedly called into question. In this paper, we review long-lasting debates as to whether or not China will collapse and explain why we believe China is not going to collapse economically or politically. Our main argument is that Chinese authorities have applied a gradual anti-crisis approach to reform since 1978. This approach means that the Chinese government has both pursued modest reform measures and reacted quickly to internal and external shocks. Structurally speaking, the party and Chinese central government’s control over social resources represents an implicit guarantee against potential collapses. This paper then studies current risks of a sudden growth collapse in the form of a debt crisis, a housing bubble bust, and political disintegration, and lays forth why these events are not likely to happen and spark a major Chinese collapse in the near future. We also identify new instabilities in China’s economic and political system and discuss how the current gradual anti-crisis approach to reform can be upgraded to deal with these problems.
    Keywords: political collapse; economic collapse; approach to reform
    JEL: H63 H68 O17 P16 P21
    Date: 2018–04
  4. By: Li, Chenhui; Lian, Xubei; Zhang, Zhi
    Abstract: This paper investigates the relationship between government education expenditure and regional innovation, a key engine of China's long-term economic growth as the nation undergoes massive economic restructuring and deep transformations. In an attempt to inform a whole-of-government approach in promoting indigenous knowledge generation, the authors examined the effect of two additional institutional factors, financial market development and Intellectual Property protection, as well as their interaction with education expenditure on regional innovation levels. By employing a sample of provincial panel data from 1998 to 2014, the authors find a significant positive correlation between education expenditure and regional innovation levels, an effect most pronounced in the Western provinces of China. Their analysis also revealed that financial market development augments the pro-innovation effect of education spending whereas a stronger IP protection regime could potentially mitigate such effect. The findings indicate that government investments in education as well as the creation of a more developed financial landscape will be effective ways to enhance regional innovation levels. However, attention should be paid to the nuances of the current IP protection system as well as the conduct of market players to pre-empt exploitations and enable greater incentives for sustained innovations.
    Keywords: education expenditure,innovation,financial market development,intellectual property protection
    JEL: I21 I28
    Date: 2018
  5. By: Salvatore Monni (Dipartimento di Economia Università degli Studi Roma Tre, Italia); Luca Serafini (Facultad de Economía y Empresa, Universidad de Murcia, Murcia, España)
    Abstract: The aim of this paper is to outline the relationship between Ecuador and China, highlighting its main threats to the development of the Ecuadorian Republic, and in particular how the implementation of the buen vivir economic paradigm which Ecuador is experimenting with may be affected if it does not change the terms of engagement with the Asian giant. The paper is structured as follows: in the introduction, we present an overview of the historical framework of the Chinese relationship with Ecuador. There follows an analysis supported by data on the commercial situation between the two countries, and its implications for the development of the Latin American state. In our final remarks we present the possible routes that Ecuador could follow to secure its path to development, whilst highlighting possible conditions under which Ecuador could cooperate with China while avoiding a state of dependency.
    Keywords: Buen Vivir; China; Dependency; Ecuador; Productive Matrix; Sovereignty;
    JEL: B59 O10 O20 O54
    Date: 2018–03
  6. By: Andrei Potlogea (University of Edinburgh); Wenya Cheng (University of Manchester)
    Abstract: We study the effect of improvements in foreign market access brought by China’s WTO accession on Chinese local economies. We exploit cross-city variation in these improvements stemming from initial differences in sectoral specialization and exogenous cross-industry differences in US trade liberalization that originate from the elimination of the threat of a return to Smoot-Hawley tariffs for Chinese imports. We find that Chinese cities that experience greater improvement in their access to US markets following WTO accession exhibit faster population, output and employment growth as well as increased investment and FDI inflows. The benefits of WTO membership for Chinese local economies are augmented by significant local spillovers. These spillovers operate both from the tradable to the non-tradable sector and within the tradable sector. Within the tradable sector, spillovers are transmitted primarily via labor market linkages. We find important local demand linkages from the tradable to the nontradable sector. Most local service sectors benefit from trade liberalization. In particular, our evidence suggests that increased investment demand caused by trade liberalization drives financial sector growth. We find little effect of trade liberalization on local wages. Alongside our results on population and employment, this indicates that local labor supply elasticities are high in our setting. Our findings can be explained by a Lewis model of urbanization that combines geographic mobility with an abundant reserve of labor.
    Date: 2017

This nep-cna issue is ©2018 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.