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on China |
| By: | Liu, Zheng (Federal Reserve Bank of San Francisco); Spiegel, Mark M. (Federal Reserve Bank of San Francisco); Zhang, Jingyi (Shanghai University) |
| Abstract: | China maintains tight controls over its capital account. Its prevailing regime also features financial repression, under which banks are often required to extend a fraction of funds to state-owned enterprises (SOEs) at below-market interest rates. We incorporate these features into a general equilibrium model. We find that capital account liberalization under financial repression incurs a tradeoff between aggregate productivity and intertemporal allocative efficiency. Along a transition path with a declining SOE share, the second-best policy calls for a rapid removal of financial repression, but gradual liberalization of the capital account. |
| JEL: | G18 O41 |
| Date: | 2018–08–02 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2018-10&r=cna |
| By: | M.Emranul Haque; Paul Middleditch; Shuonan Zhang |
| Abstract: | This paper investigates the contrasting business cycle characteristics of China and the US, speci cally in terms of economic activity and total factor productivity. To help explain the differing pro les for these two variables for both countries, we build and estimate a DSGE model with extended fi nancial markets and endogenous technology creation to identify key structural parameters, comparing the decomposition of the shock processes in our analysis. We reveal stark differences in the contributing factors of business cycle fluctuations for both countries, and demonstrate the importance of the stock market for economic recovery after a sizable and persistent financial shock. Macroeconomic intervention in China works well but is unable to smooth total factor productivity (TFP) due to the presence of multiple shocks transmitted through the endogenous technology creation channel. Whilst the US achieves a similar pro le for economic activity with less volatility in TFP, it also contends with additional risks, fed in by the existence of the stock market. The stock market allows firms to hedge fi nance during periods of fi nancial instability, though this is not cost free. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:man:cgbcrp:244&r=cna |
| By: | Wei, X.; Ali, T.; Huang, J. |
| Abstract: | China is investing huge funds into Pakistan’s transport infrastructure under China Pakistan Economic Corridor. Both countries stand to benefit from these developments via improved trade and lower export prices. We use a global economics models (GTAP) to assess the effects of transport infrastructure by developing several policy scenarios in 2025. Our results show that both Pakistan and China will get positive effects in terms of GDP growth and welfare. The effects are particularly significant on Pakistan. In terms of mutual trade, Pakistan’s net exports of agricultural commodities to China will increase more than the exports non-agricultural commodities. On the other hand, non-agricultural exports from China will improve significantly to Pakistan. Due to changing trade relations, there will be some adjustment in Pakistan’s production structure. Pakistan could experience some leveling of income due to slight increase in rural incomes. The expected benefits can only be realized by speedy and smooth implementation of the projects under CPEC. |
| Keywords: | Agricultural and Food Policy, International Relations/Trade |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae18:276050&r=cna |
| By: | REN, Yanjun; CASTRO CAMPOS, Bente; LOY, Jens-Peter; BROSIG, Stephan |
| Abstract: | Previous literature has demonstrated that low-income people are more likely to settle for poor health choices in developed countries. By using income as a budget constraint and signal for future wellbeing in a life-course utility model, we examine the connection amongst income and overweight. The data used for this study are from the China Health and Nutrition Survey (CHNS). Estimations are conducted for overweight initiation, cessation, and participation mirroring a decision to begin and a past decision to not terminate. Our findings propose that body weight and the likelihood of overweight commencement rise with additional income but at a diminishing degree, representing a concave relation; while the likelihood of overweight discontinuance declines with additional income but at an accelerating degree, suggesting a convex relation. We presume that, as opposed to developed countries, low-income people are less inclined to be overweight in China, a country in transition. This could be explained by an income constraint for unhealthy foodstuff. Nevertheless, it will switch when income surpasses the critical threshold of the concave or inverted U-shape curve indicating that low-income people appear to receive not as much utility from future health. Specifically, this adjustment seems to occur earlier for females and inhabitants of urban areas. |
| Date: | 2018–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi18:275891&r=cna |
| By: | Zheng Li (School of Economics and Finance, Xi’an Jiaotong University, China); Jorge Martinez-Vazquez (International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State Univeristy) |
| Abstract: | Misallocation of factors of production has been recently viewed as a promising explanation accounting for the large difference in total factor productivity (TFP) across countries. This paper differs from previous studies by concentrating on interregional capital misallocation and by focusing on the role of fiscal decentralization in shaping misallocation. Using a municipal level panel data set, we measure intra-provincial and inter-municipal capital misallocation in China over 2003-2015. The empirical results based on provincial level panel data suggest that revenue decentralization mitigates interregional misallocation while expenditure decentralization fails to exert a significant impact. We further find that this positive effect is more significant and much larger when it is the market rather than government intervention that is driving the flow of capital. The results are robust to different specifications, IV estimations and alternative measurement of interregional misallocation. Our study complements the literature on the causes of misallocation and enriches the understanding of the consequences of fiscal decentralization, especially in terms of economic growth and interregional inequality. |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:ays:ispwps:paper1816&r=cna |
| By: | Hao, Jinghui; Heerink, Nico; Heijman, Wim; Bijman, Jos |
| Abstract: | Cooperatives are regarded as an institutional vehicle to help farmers mitigate market imperfections and improve smallholder welfare. Though much research has been done on what effect cooperatives have on farmers’ welfare, the question of how cooperatives affect farmers’ welfare remains largely unanswered. By using the case of apple farmers in China, we seek to answer this question by examining the effect of cooperative membership on yield and profit. The empirical analysis is based on field survey data collected among 551 apple farm households in Shaanxi and Shandong. An endogenous treatment regression model is employed to assess the average treatment effects of cooperative membership on the yield and profits per unit area. Our research shows that cooperative membership has a significantly positive effect on yields, but no significant effect on profits per unit area. Two pathways explain the different effects. First, cooperative services change members’ production practices, especially the use of inputs that lead to higher land productivity. Second, members on average spend more on fertilizers and use more hired labor than non-members, which results in higher production costs. The extra revenues generated by the increased yields roughly compensates the extra production costs of the members. |
| Keywords: | Agribusiness |
| Date: | 2017–08–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae17:260914&r=cna |
| By: | Barth, Mary E. (Stanford University); Clinch, Greg (University of Melbourne); Ma, Paul (University of Minnesota) |
| Abstract: | We address whether mandatory forecasts of earnings announcement dates are informative and what are the informational tradeoffs between mandatory and voluntary forecasts. We find China mandatory forecasts predict actual earnings announcement dates and yet-to-be-announced firm performance, and the market reacts to the initial and revised forecasts accordingly. Regarding informational tradeoffs we find the following. China mandatory forecasts are informative, even by firms less likely to issue a voluntary forecast; this information is unavailable in a voluntary regime. The act of US voluntary forecasting and its timing reveal information incremental to the forecasted announcement date, which is unavailable in a mandatory regime. Perhaps surprisingly, US voluntary and China mandatory initial forecasts convey a similar amount of earnings news, which is noteworthy because the China forecasts are issued substantially earlier and suggests the amount of information in the act and timing of voluntary forecasts is small. |
| JEL: | D84 G14 M48 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:3661&r=cna |
| By: | Hu, R.; Deng, H. |
| Abstract: | China used to zealously embrace genetically modified (GM) technology, but debates, scandals and misleading news on GM technology increase consumers’ risk perceptions of GM foods and influenced their trust in different actors involved in biotechnology. A better understanding of consumer trust in different actors or source of information can improve effectiveness of biotechnology policy and better practice in risk communication with respect to GM foods. This paper employs bivariate Probit models and IV Probit model to examine the relationships between consumers’ trust in different actors / source of information and their attitudes toward GM foods. The surveys conducted in 2015 in China showed that most consumers reject GM foods and tend to distrust in scientists who are engaged in biotechnology research. Meanwhile, they revealed a high level of trust in non-GM scientists or individuals and high levels of belief in misleading news or rumors regarding GM food safety. Consumer trust in GM scientists are positively associate with their acceptance of GM foods while their trust in non-GM scientists or individuals and belief in misleading news or rumors are important constraints for consumer acceptance of GM foods. |
| Keywords: | Agricultural and Food Policy, Research and Development/Tech Change/Emerging Technologies |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae18:276047&r=cna |
| By: | Moustier, P. |
| Abstract: | The purpose of this paper to empirically document the role and impact of agri-business development in the case of apple chains in China, and to investigate the role that the provision of services and marketing plays in this impact. We compare some performance indicators, including yields and profits between farmers belonging to chains with and without dragon-head companies, i.e. companies which invested in various infrastructures, and provide services to farmers including extension services, storage and input provisioning. The data is based on a survey of 355 apple farmers in Shandong and Shaanxi provinces. Dragon-head companies have no significant impact on the yield and profit obtained by farmers, in contrast with belonging to a cooperative. They do not have a significant impact on training relative to cooperatives. They do not propose higher prices for farmers, even though farmers’ practices may be more eco-friendly and reduce the use of chemical pesticides. The conclusion is that the optimal conditions for agri-business development to be conducive to economic development as shown by the literature do not seem to be gathered in the apple sector of China. |
| Keywords: | Agricultural and Food Policy, Crop Production/Industries, International Relations/Trade |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae18:276037&r=cna |