nep-cna New Economics Papers
on China
Issue of 2019‒03‒04
nine papers chosen by
Zheng Fang
Ohio State University

  1. Short-Run Health Consequences of Retirement and Pension Benefits: Evidence from China By Nikolov, Plamen; Adelman, Alan
  2. The PRC’s Long-Run Growth through the Lens of the Export-Led Growth Model By Felipe, Jesus; Lanzafame, Matteo
  3. Can reducing carbon emissions improve economic performance? Evidence from China By Yang, Fei; Shi, Beibei; Xu, Ming; Feng, Chen
  4. The Effect of Pollution and Heat on High Skill Public Sector Worker Productivity in China By Matthew E. Kahn; Pei Li
  5. Labor Market Dynamics in Urban China and the Role of the State Sector By Shuaizhang Feng; Naijia Guo
  6. Decomposition analysis of air pollution abatement in China: Empirical study for ten industrial sectors from 1998 to 2009 By Fujii, Hidemichi; Managi, Shunsuke; Kaneko, Shinji
  7. State-Owned Enterprises Leverage as a Contingency in Public Debt Sustainability Analysis: The Case of the People's Republic of China By Ferrarini, Benno; Hinojales, Marthe
  8. In Search of China's Income-Health Gradient: A Biomarker-Based Analysis By Nie, Peng; Li, Qing; Sousa-Poza, Alfonso
  9. The Imperial Silk Factories of Kangxi in China, 1661-1722 A mirror for Louis XIV’s Royal Factories? By Li Wang

  1. By: Nikolov, Plamen; Adelman, Alan
    Abstract: This paper examines the impact of the New Rural Pension Scheme (NRPS) in China. Exploiting the staggered implementation of an NRPS policy expansion that began in 2009, we used a difference-in-difference approach to study the effects of the introduction of pension benefits on the health status, health behaviors, and healthcare utilization of rural Chinese adults age 60 and above. The results point to three main conclusions. First, in addition to improvements in self-reported health, older adults with access to the pension program experienced significant improvements in several important measures of health, including mobility, self-care, usual activities, and vision. Second, regarding the functional domains of mobility and self-care, we found that the females in the study group led in improvements over their male counterparts. Third, in our search for the mechanisms that drive positive retirement program results, we find evidence that changes in individual health behaviors, such as a reduction in drinking and smoking, and improved sleep habits, play an important role. Our findings point to the potential benefits of retirement programs resulting from social spillover effects. In addition, these programs may lessen the morbidity burden among the retired population.
    Keywords: life-cycle,retirement,pension,health,aging,developing countries,China
    JEL: H55 H75 I10 I12 I19 J26
    Date: 2019
  2. By: Felipe, Jesus (Asian Development Bank); Lanzafame, Matteo (Universita' degli Studi di Messina)
    Abstract: The People’s Republic of China’s (PRC) remarkable growth performance over the last 3 decades has been associated to very robust export growth, so much so that many refer to it as a clear example of export-led growth (ELG). Using the concept of the balance-of-payments equilibrium (BOPE) growth rate, which provides a framework to test the ELG hypothesis, we show that the PRC’s actual long-run growth is well approximated by its BOPE growth rate. This growth rate is given by the ratio of the growth rate of exports to the income elasticity of imports. We estimate the latter using the Kalman filter, which allows us to obtain a time-varying estimate of the PRC’s BOPE growth rate. We find that the average value of the PRC’s BOPE growth rate during 1981–2016 was 11%, but it varied significantly over time and declined notably after 2007. Today, it is estimated at a much lower 5.9%. We then discuss the determinants of the PRC’s BOPE growth rate and of the income elasticity of imports, with the help of the Bayesian model averaging technique. The analysis highlights the role of the composition of aggregate demand as the main driving force, both for its direct effects on the income elasticity of imports, and for the indirect effects on export growth via capital accumulation, in particular fixed asset investment. Our analysis has important implications to understand the PRC’s transition to a “New Normal” of a lower growth rate.
    Keywords: balance-of-payments equilibrium growth rate; Bayesian model averaging; export-led growth; Kalman filter; People’s Republic of China
    JEL: E24 E32 O14 O47 O50
    Date: 2018–08–28
  3. By: Yang, Fei; Shi, Beibei; Xu, Ming; Feng, Chen
    Abstract: As the problem of carbon emissions is becoming increasingly more serious around the world, how to balance carbon emissions reduction and economic growth has become an important issue in the field of ecological economics. China is the world's largest carbon dioxide emitter, and China's Low-Carbon Pilot (CLCP) policy has significantly reduced carbon dioxide emissions and achieved expected benefits. However, is environmental quality improving at the expense of economic growth? Based on panel data from 286 Chinese prefecture-level cities and from Chinese micro-industrial enterprises from 2001 to 2013, this article focuses on the causal effect of environmental policy on regional economic growth and the benefits and changes in the behavior of enterprises through a quasi-natural experiment and the difference-in-differences (DID) method. The results are as follows. First, the CLCP policy significantly promotes regional economic growth. Moreover, as the implementation time of the policy continues, environmental regulation has a greater effect of promoting economic growth. Second, although the CLCP policy significantly increases various production costs, it also promotes the growth of enterprises' output and benefits. Third, under the pressure of the significant increase in enterprise cost caused by environmental regulation, enterprises choose the positive way of strengthening internal management, improving efficiency and increasing innovation instead of choosing the negative way of trans-regional transfer to exit the market; accordingly, enterprises finally achieve an improvement in output and benefits.
    Keywords: CLCP policy,economic growth,behavior of enterprise,DID
    JEL: O12 O13 Q38
    Date: 2019
  4. By: Matthew E. Kahn; Pei Li
    Abstract: The quality of governance depends on public sector worker productivity. We use micro data from China to document that judges are less productive on polluted days. Building on the insights of Alchian and Kessel (1962), we discuss the role of organization design and the incentives of public versus for profit organizations in designing a workplace that reduces the productivity costs of local disamenities. We find that the public sector productivity elasticities are larger than published estimates of the private sector productivity elasticities with respect to pollution.
    JEL: H11 Q53
    Date: 2019–02
  5. By: Shuaizhang Feng (Jinan University); Naijia Guo (The Chinese University of Hong Kong)
    Abstract: This paper studies the effect of state-owned enterprises on the dynamics of the Chinese urban labor market. Using longitudinal monthly panel data, we document very low dynamics in the labor market, especially in the state sector. We develop and calibrate an equilibrium search and matching model with three differences between the state and the non-state sector: labor productivity, labor adjustment cost, and workers’ bargaining power. Counterfactual analysis shows that the lack of dynamics is mainly driven by the strong bargaining power of state-sector workers. Eliminating the differences between the two sectors substantially reduces the unemployment rate and long-term unemployment rate.
    Keywords: state sector, labor market dynamics, search and matching, China, long-term unemployment
    JEL: J64 J45 P23
    Date: 2019–02
  6. By: Fujii, Hidemichi; Managi, Shunsuke; Kaneko, Shinji
    Abstract: This study analyzes air pollutant substances management in Chinese industrial sectors from 1998 to 2009. Decomposition analysis applying the logarithmic mean divisia index is used to analyze changes in air pollutant substances emissions by the following five factors: coal pollution intensity (CPI), end-of-pipe treatment (EOP), energy mix (EM), productive efficiency change (EFF), and production scale changes (PSC). We focus on the three pollutants which are sulfur dioxide (SO2), dust substance, and soot substance. We clarify SO2 emissions from Chinese industrial sectors have increased because of the increase in the production scale. However, the inducing EOP equipment and improvements in energy efficiency have prevented an increase in SO2 emissions commensurate with the production increasing. Second, soot emissions were successfully reduced and controlled in all industries except the steel industry between 1998 and 2009, even though the production scale expanded for these industries. This reduction is achieved because of improvements in the EOP equipment technology and in energy efficiency. Finally, dust emissions decreased by nearly 65% between 1998 and 2009 in the Chinese industrial sectors. This successful emissions reduction was achieved by implementing EOP and pollution prevention activities during the production processes, especially in the cement industry. We clarify that pollution prevention effect in cement industry is mainly caused by production technological development rather than scale merit.
    Keywords: Sustainable industrial production; Pollution prevention; End-of-pipe; Air pollution; Scale merit; China
    JEL: Q01 Q53 Q56
    Date: 2019
  7. By: Ferrarini, Benno (Asian Development Bank); Hinojales, Marthe (Asian Development Bank)
    Abstract: We reflect state-owned enterprises’ (SOE) leverage within the standard debt sustainability assessment framework. Based on company data and the interest coverage ratio as a measure of debt at risk, aggregate baseline projections and fan charts gauge SOE debt as a contingent liability to the public sector. We find that SOE leverage in the People’s Republic of China has grown to a large liability that deserves the urgent attention it has been receiving from the authorities. While there is no room for complacency, there is no need for panic either; even if authorities had to step into mop up as much as 20% of SOE debt at risk gone bad, this would appear to be manageable at roughly 2.7% of the gross domestic product in 2016 or 5.5% by 2021. These findings are reflective of discretionary assumptions about future developments in the SOE sector and the broader economy—including baseline conditions premised on preventive government action to slow borrowing—that are adjustable to reflect analysts’ prerogatives and expectations.
    Keywords: contingent liabilities; corporate leverage; People’s Republic of China; public debt sustainability; state-owned enterprises
    JEL: G01 G21 H30 H60
    Date: 2018–01–26
  8. By: Nie, Peng (University of Hohenheim); Li, Qing (University of Sherbrooke); Sousa-Poza, Alfonso (University of Hohenheim)
    Abstract: Using data from the 2009 China Health and Nutrition Survey, this study investigates China's income-health gradient by analyzing the effect of both current and long-term household income on 22 blood-based biomarkers, 4 used as individual variables and all 22 assessed as a composite. After applying a two-step residual inclusion estimator, we find limited evidence of an income-health gradient irrespective of whether the income measure is current or long term. Because risky behavior may attenuate income's positive effects on health, we also analyze the association between income and such health-influencing factors as alcohol consumption, smoking, diet, physical activity, and dietary knowledge. Although we find that higher incomes go hand-in-hand with some of these factors (in particular, a higher number of cigarettes smoked per day), they also promote poorer diets (higher consumption of fats and calories). However, the fact that these effects are small, dependent on income measure, and susceptible to reporting biases makes it unlikely that they are attenuating income's potentially positive effects on health.
    Keywords: biomarkers, income-health gradient, China
    JEL: I12 I14 I15
    Date: 2019–02
  9. By: Li Wang (Department of Early Modern History, GECEM Project, Universidad Pablo de Olavide)
    Abstract: This thesis explores the silk trade in China and Europe at the turn of the seventeenth and eighteenth century through a transnational point of view, taking an example of France, by comparing the imperial silk factories of the Emperor Kangxi of Qing Dynasty (1661-1722) and the Grande Fabrique of Luis XVIII of France (1643-1715), analyzes the variation of business organization system, the manufacturing equipment scale, finance, personnel management, income and social status of the craftsmen, product types and sales, etc., which reflected the differences of the economic development strategies of the two monarchs; Like a butterfly effect, it could be inferred from the details of the official silk production and consumption in the studied geographical and time range, the causes and effects of diverse economic and political roads each monarch took subsequently.
    Keywords: global history, consumption history, imperial silk factories of Kangxi period, Louis XIV’s royal factories, silk consumption, China, Qing Dynasty
    Date: 2019–02

This nep-cna issue is ©2019 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.