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on China |
| By: | Andrés Rodríguez-Pose; Min Zhang |
| Abstract: | Economic growth in China in recent decades has largely rested on the dynamism of its cities. High economic growth has coincided with measures aimed at improving the efficiency of local governments and with a mounting political drive to curb corruption. Yet the connection between government institutions and urban growth in China remains poorly understood. This paper is the first to look into the connection between government efficiency and corruption, on the one hand, and urban growth in China, on the other and to assess what is the role of institutions relative to more traditional factors for economic growth in Chinese cities. Using panel data for 283 cities over the period between 2003 and 2014, the results show that urban growth in China is a consequence of a combination of favourable human capital, innovation, density, local conditions, foreign direct investment (FDI), and, city-level government institutions. Both government quality ? especially for those cities with the best governments ? and the fight against corruption at the city level have a direct effect on urban growth. Measures to tackle corruption at the provincial level matter in a more indirect way, by raising or lowering the returns of other growth-inducing factors. |
| Keywords: | Economic growth, cities, government efficiency, corruption, China |
| JEL: | O43 R11 R58 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1904&r=all |
| By: | Katja Hanewald; Hazel Bateman; Hanming Fang; Shang Wu |
| Abstract: | Reverse mortgages provide an alternative source of retirement funding by allowing older homeowners to borrow against their home. However, a recent pilot program of reserve mortgage products in several large Chinese cities saw almost no take up. To ascertain the demand for reverse mortgages in China, we conduct and analyze two online surveys that focus respectively on homeowners aged 45-65 as potential purchasers, and on adult children in the 20-49 age group representing children of potential purchasers. We address the reported shortcomings of the pilot reverse mortgage product by testing an improved product design presented in a clear and comprehensive format. In stark contrast, we find that 89% of older Chinese homeowners would be interested in this new reverse mortgage product, and 84% of adult children would recommend such a product to their parents. Participants in both surveys reported that they would use the reverse mortgage payments to fund a more comfortable retirement and to pay for better medical treatments and aged care services. Respondents' interest in reverse mortgages was associated with their familiarity and understanding of the product, and its perceived potential to address liquidity constraints in retirement. Health status, aged care preferences and proxies for intergenerational links were also important. Our results are contrary to the common perception of intergenerational expectations of wealth transfer in China, and provide new evidence in support of the potential development of China's reverse mortgage market. |
| JEL: | D14 G11 G21 G22 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25491&r=all |
| By: | Mardi Dungey; Denise R. Osborn |
| Abstract: | As China becomes more closely entwined with the US, positive shocks in the US translate into positive outcomes for China, but the extent of gain for the US during the convergence process is less clear. We develop an empirical framework of two interacting open economies in which Chinese GDP per capita moves towards convergence and cointegration with the US, resulting in a time-varying structural VAR model. As a result, the impulse responses of the two countries to shocks are sensitive to the timing of the shock. The changing effects of US shocks are evident in the analysis, which shows that over the convergence process both the US and China unambiguously benefit from the catch-up process. |
| Keywords: | China, SVAR, convergence, catch-up |
| JEL: | O11 O47 F41 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2019-07&r=all |
| By: | Kang, Lili (Shanghai Lixin University of Accounting and Finance); Peng, Fei (Shanghai Lixin University of Accounting and Finance); Zhu, Yu (University of Dundee) |
| Abstract: | Using the recent China Family Panel Studies, we identify the subjects studied by college (2–3 years) graduates and university (4–5 years) graduates. For the university graduates, we can further distinguish universities by the tier of selectivity (i.e., Key and Ordinary Universities). We take advantage of the rich information on the respondent's school cohort, hukou status at age 12, and the mother's age and education to estimate university applicants' simultaneous choice of subject and tier of prestige of higher education institutions (HEIs). Using the doubly robust Inverse Probability Weighted Regression Adjustment method to account for selection – on observables – into subjects and tiers, our treatment effect estimates suggest that pooled OLS and random-effect models substantially underestimate the effect of attending universities that are more prestigious for graduates of both genders in law, economics, and management (LEM). We also demonstrate that the recent massive expansion of the higher education sector resulted in reduced returns to HE for all graduates, except for graduates who studied LEM or Other non-STEM (sciences, technology, engineering and math/medicine) subjects at the most prestigious universities. The results are robust to treating subjects as predetermined for the selection into HEIs by tiers of prestige. |
| Keywords: | returns to university tier and subjects, China, inverse probability weighted regression adjustment, higher education expansion |
| JEL: | I23 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12071&r=all |
| By: | Nancy Kong; Lars Osberg; Weina Zhou (Department of Economics, Dalhousie University) |
| Abstract: | Reform of the Chinese state-owned enterprise (SOE) sector in the late 1990s produced massive layoffs (34 million employees) and marked the end of the “iron rice bowl” guarantee of employment security. An expanding international literature has documented the adverse health impacts of economic insecurity on adults but has usually neglected children. This paper uses the natural experiment of SOE reform in China to explore the causal relationship between increased parental economic insecurity and children’s BMI Z-score. Using provincial and year-level layoff rates and income loss from the layoffs, we estimate a generalized differences-in-differences model with individual fixed effects and year fixed effects. For a medium-built 10-year-old boy, a 10%-point increase in expected parental economic loss from layoff (largest treatment effect) implies a gain of 4 kg. The counterfactual analysis suggests a 4.5%-point increase in overweight rate due to the reform. The weight gain persists for boys whose parents kept their jobs, indicating the importance of anxiety about potential losses, as well as the experience of actual loss. Quantile regressions suggest that boys who were relatively overweight were more severely affected by parental economic insecurity. Girls are not significantly affected. Accounting for intergenerational effects therefore increases the estimated public health costs of greater economic insecurity. |
| Date: | 2018–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:dal:wpaper:daleconwp2018-01&r=all |
| By: | Grafström, Jonas (The Ratio Institute) |
| Abstract: | China has in recent decades expanded its wind power generation capacity and become the world leader. Still, despite robust government support, wind power in China is obstructed by various barriers (e.g. quality deficiencies, inability to export, missing grid connections, and permit delays from central government for grid construction etc.). This paper synthesises the literature that has discovered weaknesses in the Chinese wind power development and suggests improvements. One energy policy relevant observation is that when the Chinese government sets command-and-control construction targets over new installed capacity, actors delivered to target – but with several power plants without grid connectivity and severe quality problems. The article contributes to the academic debate over the role of policy making in renewable energy development and argues that China should improve their incentive structure and coordination of regulations. |
| Keywords: | China; Wind power; Generation; Policy; Energy; Innovation |
| JEL: | O11 O21 O53 |
| Date: | 2019–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0317&r=all |
| By: | Weina Zhou (Department of Economics, Dalhousie University) |
| Abstract: | This paper uses the send-down movement during the Chinese Cultural Revolution to study the impact of forced migration during youth on individuals’ outcomes in later years. The massive send-down movement (1968-1978) forced more than 16 million urban youths to move to rural areas to carry out agricultural field work. I utilize a rich set of family background information when the youths were 18 years old, and compare the send-downs with their closest counterparts—non-send-downs. Multiple surveys provide consistent evidence that the send- downs are 7 percentage points more likely to have had re-schooling after their return to urban areas; children of the send-downs are 9 percentage points more likely to attend college and have 0.5 more years of education. Evidence also suggests that compared to the non-send-downs, the send-downs spend more on their children’s education. This paper presents a unique outcome of resilience for youths after forced migration. |
| Keywords: | Education; Forced Migration; Adolescent Development; Resilience; Send-down Movement |
| Date: | 2017–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:dal:wpaper:daleconwp2017-04&r=all |
| By: | Chen, Kaiji (Emory University); Zha, Tao (Federal Reserve Bank of Atlanta) |
| Abstract: | The Chinese economy has undergone three major phases: the 1978–97 period marked as the SOE-led economy, the 1998–2015 phase as the investment-driven economy, and the new normal economy since 2016. All three economies have been shaped by the government financial policies, defined as a set of credit policy, monetary policy, and regulatory policy. We analyze the macroeconomic effects of these financial policies throughout the three phases and provide the stylized facts to substantiate our analysis. The stylized facts differ qualitatively across different phases or economies. We argue that the impacts of China's financial policies work through transmission channels different from those in developed economies and that a regime switch from one economy to another was driven mainly by regime changes in financial policies. |
| Keywords: | marketized tools; regime change; growth; investment; capital intensity; local governments; regulations; shadow banking; debts; real estate; preferential credits; industrialization; SOEs; POEs; heavy and light sectors; monetary stimulus; trends and cycles |
| JEL: | E5 G1 G28 O2 |
| Date: | 2018–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2018-12&r=all |
| By: | Simbarashe Mhaka (Department of Economics, Nelson Mandela University); Leward Jeke (Department of Economics, Nelson Mandela University) |
| Abstract: | South Africa’s (SA) largest trading partner is China. The bilateral trade flows between these two economies have been increasing since the end of the global financial crisis. There are several factors that determine the trade flows between these two economies. Research studies the impact of the real exchange rate, market size and economic size on the trade flows between SA and China, applying the gravity model of trade. Time series data for the period of 1995–2014 have been used and a multiple linear regression model was employed in the evaluation process. To determine the impact of the three underlying variables on the bilateral trade flows of SA and China, the ordinary least squares method was used. The explanatory variables consist of the product of SA’s gross domestic product (GDP) and China’s GDP, which act as the proxy for economic size, the product of South Africa’s population and China’s population, which act as the proxy for market size, and the real exchange rate between SA and China. Results revealed that the economic size and the market size have a strong positive impact on trade flows between SA and China and this is consistent with economic theory. On the other hand the real exchange rate has a negative impact on trade flows between SA and China. If two countries each have a large economic and population size trade, this results in high trade flows between the countries as compared to trading with smaller economies. Trade volume is also reduced if the countries trading have a highly volatile exchange rate. Based on the findings of the research, the article recommends that the Department of Trade and Industry should target trade with countries of big economic and market size. The research also shows that the absolute and comparative advantages are not the only basis of trade but other factors should be considered, such as exchange rate, economic size and market size. The central bank should maintain a stable exchange rate between the SA rand and partner countries’ currencies before trading. This enhances trade and leads to strong economic growth. |
| Keywords: | trade flows, economic size, market size, exchange rate, gravity model |
| JEL: | C23 F13 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:mnd:wpaper:1837&r=all |
| By: | Gabriel Zucman |
| Abstract: | This article reviews the recent literature on the dynamics of global wealth inequality. I first reconcile available estimates of wealth inequality in the United States. Both surveys and tax data show that wealth inequality has increased dramatically since the 1980s, with a top 1% wealth share around 40% in 2016 vs. 25–30% in the 1980s. Second, I discuss the fast growing literature on wealth inequality across the world. Evidence points towards a rise in global wealth concentration: for China, Europe, and the United States combined, the top 1% wealth share has increased from 28% in 1980 to 33% today, while the bottom 75% share hovered around 10%. Recent studies, however, may under-estimate the level and rise of inequality, as financial globalization makes it increasingly hard to measure wealth at the top. I discuss how new data sources (leaks from financial institutions, tax amnesties, and macroeconomic statistics of tax havens) can be leveraged to better capture the wealth of the rich. |
| JEL: | D31 H26 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25462&r=all |