nep-cna New Economics Papers
on China
Issue of 2019‒08‒12
thirteen papers chosen by
Zheng Fang
Ohio State University

  1. Social Networks and Mental Health Outcomes: Chinese Rural-Urban Migrant Experience By Meng, Xin; Xue, Sen
  2. A Study of Economic Sophistication of China by Using Principle Component Analysis By Takanori Minamikawa
  3. Understanding the importance of social interactions between small farmers: Evidence from farmer planting behavior in rural China By Cheng, Zhu; Chen, Qianheng; Delgado, Michael
  4. EU Trade Policy amid the China-US Clash: Caught in the Cross-Fire? By Anabel Gonzalez; Nicolas Veron
  5. Height and Earnings: A Mendelian Randomization Analysis from China By Chen, Qihui; Zhu, Chen; Wang, Jun; Kong, Guoshu
  6. Fertility cost, intergenerational labor division, and female employment By Yu, Haiyue; Cao, Jin; Kang, Shulong
  7. Road Infrastructure and Poverty Alleviation: Evidence from Rural China By Zhu, Lifen; Jin, Songqing; Huang, Jikun; Tian, Yongzhong
  8. Ownership and Productivity in Vertically-Integrated Firms: Evidence from the Chinese Steel Industry By Loren Brandt; Feitao Jiang; Yao Luo; Yingjun Su
  9. East Asian Value Chains, Exchange Rates, and Regional Exchange Rate Arrangements By Willem THORBECKE
  10. Beauty and Job Accessibility: New Evidence from a Field Experiment By Deng, Weiguang; Li, Dayang; Zhou, Dong
  11. Effects of Health insurance on income distribution in China By Sun, Yu; Liu, Gordon G.; You, Wen; Wang, Meijiao
  12. Investigation on Regional Decomposition Mechanism of Carbon Emission Control Target: China 2021-2030 By Shengbo FENG; Masashi TAKETANI; Yanmin HE; Tun-Yen WANG
  13. Estimating the Market Effect of a Trade War: The Case of Soybean Tariffs By Adjemian, Michael K.; Smith, Aaron; He, Wendi

  1. By: Meng, Xin; Xue, Sen
    Abstract: Over the past two decades, more than 160 million Chinese rural workers have migrated to cities to work. They are separated from their familiar rural networks to work in an unfamiliar, and often hostile environment. Many of them thus face significant mental health challenges. This paper is the first to investigate the extent to which migrant social networks in host cities can mitigate these adverse mental health effects. Using a unique longitudinal survey data of Rural-to-Urban Migration in China (RUMiC), we find that network size matters significantly for migrant workers. Our preferred IV estimates suggest that one standard deviation increase in migrant city networks, on average, reduces the measure of mental health problem by 0.47 to 0.66 of a standard deviation. Similar effects are found among less educated, those working longer hours, and those without access to social insurance. The main channel of the network effect is through boosting confidence and reducing anxiety of migrants.
    Keywords: Mental Health,Social Networks,Migration,China
    JEL: I12 I15 J61
    Date: 2019
  2. By: Takanori Minamikawa (Economic Research Institute for Northeast Asia (ERINA))
    Abstract: Following the Global Recession in 2008, European countries and U.S. recognized irreversible changes resulting from financial shock that lead their own countries into a new stage of economy, called “New Normal”. Since the Chinese economy is not independent of the global economy, China also recognized that its own economy was entering the “New normal”, or “Xin Changtai” in Chinese. Furthermore, to suit their economy to “Xin Changtai”, new economic growth policy was necessary. During the 2014 APEC meeting, President Xi Jinping declared that China aimed to change their engine of economic growth from foreign trade and investment to innovation and consumption, in addition to the harmonious upgrade of the region and society between each province to achieve sustainable economic growth. Although existing literatures suggest the use of Genuine Progress Indicator (GPI) to evaluate the sophistication of society, there is no consensus on the construction of the components or the evaluation of each component of GPI, therefore, a more objective evaluation index is needed. This study employs the principle component analysis method to calculate an indicator to evaluate the sophistication of society. This indicator reflects the degree of the characteristics readily used in developed countries, and in the present study it is applied in the evaluation of China’s 31 provinces. Empirical results show that a few provinces in coastal areas developed their society, while most inland provinces were left behind. Moreover, as a result from the examination of the correspondence between the geographic distribution of the index and China’s seven geographic divisions, it is shown that a disparity in social sophistication occurred in each division.
    Keywords: Chinese Economy, New Normal, Principle Component Analysis (PCA), Economic Disparity
    JEL: M2 F51 P20 R11
    Date: 2019–07
  3. By: Cheng, Zhu; Chen, Qianheng; Delgado, Michael
    Keywords: Institutional and Behavioral Economics
    Date: 2019–06–25
  4. By: Anabel Gonzalez (Peterson Institute for International Economics); Nicolas Veron (Peterson Institute for International Economics)
    Abstract: The combination of China's rapid rise and unique economic system, and of the increasingly aggressive and disruptive US trade policy, is putting the global rules-based trade and economic system under unprecedented and possibly vital threat. The European Union has critical interests at stake in the current escalation, even as it has so far been comparatively spared from US trade policy belligerence and China's reactions. In this context, the European Union should adopt an independent and proactive stance, building up on recent efforts and going beyond them. While in the past the European Union has been unambiguously closer to the United States than to China, it now has shared interests and differences with both countries. It does not currently have to make a general choice of one against the other. And like many other jurisdictions around the world, it should aim at defending its continuing ability not to make such a general choice, even as this stance will generate tensions with both. The recent China-EU summit success illustrates the credibility of this approach, and the objectives stated in its conclusions should be delivered upon. The European Union, even more than the United States or China, has a strategic interest in the preservation of the global rules-based order embodied by the World Trade Organization (WTO). It must take leadership for steering WTO reform and modernization, working closely with broadly aligned third countries such as Japan and other players. It should expand its outreach beyond its immediate negotiating counterparts in both the United States and China, and specifically work at a better understanding of China on the part of its (EU- and member state-level) leading officials. While strengthening its domestic policy instruments to address new challenges, such as the screening of foreign direct investment for security purposes, it must also resist its own temptations of protectionism and economic nationalism. In support of these objectives, the European Union should prepare itself for difficult decisions, which may involve revising some of its current red lines in international trade negotiations. Conversely, the European Union should stand firm on principles such as refusing one-sided agreements and rejecting abusive recourse to national security arguments in trade policies. In working with the European Council and the European Commission, the European Parliament will have a critical role to play in steering the European Union through these challenging times.
    Keywords: China, European Parliament, European Union, investment, tariffs, trade policy, trade confrontations, trading blocs, United States, World Trade Organization
    JEL: F13
    Date: 2019
  5. By: Chen, Qihui; Zhu, Chen; Wang, Jun; Kong, Guoshu
    Keywords: Labor and Human Capital
    Date: 2019–06–25
  6. By: Yu, Haiyue; Cao, Jin; Kang, Shulong
    Abstract: This paper considers the role of grandparental childcare in China’s extraordinarily high female la-bor-market participation rate. Indeed, the high female labor-market participation and low labor-income penalty for childbirth is all the more remarkable given the lack of public subsidies for child-care. Using a novel and high-quality dataset, we find that childcare provided by retired grandparents significantly reduces the duration of career breaks for young women and helps women remain in the labor force. We further show that well-educated urban women benefit most from grandparental childcare, especially in the first three years of the child’s life before there is a possibility to enter kindergarten.
    JEL: C24 J13 J22
    Date: 2019–07–30
  7. By: Zhu, Lifen; Jin, Songqing; Huang, Jikun; Tian, Yongzhong
    Keywords: Agribusiness
    Date: 2019–06–25
  8. By: Loren Brandt; Feitao Jiang; Yao Luo; Yingjun Su
    Abstract: We study productivity differences in vertically-integrated Chinese steel facilities using a unique data set that provides equipment-level information on material inputs and output in physical units and equipment size for each of the three main stages in the steel value chain, i.e., sintering, pig-iron making, and steel making. We find that private vertically-integrated facilities are more productive than provincial state-owned (SOEs) facilities, followed by central SOEs. This ranking lines up with our productivity estimates in the two downstream production stages, but central SOEs outperform in sintering, most likely because of their superior access to higher quality raw materials. The productivity differential favoring private facilities declines with their size, turning negative for facilities larger than the median. These patterns are linked with equipment-level TFP in private firms as size expands, and the internal configuration of vertically-integrated facilities, which reflect the greater constraints facing private firms. Increasing returns to scale at the stage and facility-level partially offset these costs and rationalize firms' choice on larger vertically-integrated facilities.
    Keywords: Total Factor Productivity, Vertically-Integrated, Steel, SOEs, Private, China
    JEL: D24 L11 L23 L61
    Date: 2019–07–31
  9. By: Willem THORBECKE
    Abstract: Tariffs and trade wars threaten East Asian economies. Exchange rate appreciations would be less disruptive than protectionism. This paper reports dynamic ordinary least squares findings indicating that appreciations in Asian supply chain countries reduce exports and increase imports. However, despite large current account surpluses, there has been little exchange rate appreciation outside of China. Modified Frankel-Wei (1994) regressions indicate that Asian countries focus on the U.S. dollar in their implicit currency baskets. These high weights on the dollar imply that regional exchange rates are in a Nash Equilibrium. No Asian country wants its exchange rate to appreciate against the dollar for fear of losing price competitiveness relative to its neighbors. A better equilibrium would occur if they assigned more weight to regional currencies and less to the dollar. This would facilitate a concerted appreciation of Asian currencies against the dollar.
    Date: 2019–06
  10. By: Deng, Weiguang; Li, Dayang; Zhou, Dong
    Abstract: This study uses a field experiment to resolve the difficulties of quantifying personal appearance and identify a direct causal relationship between appearance and employment in China. The experiment reveals that taste-based pure appearance discrimination exists at the pre-interview stage. There are significant gender-specific heterogeneous effects of education on appearance discrimination: having better educational credentials reduces appearance discrimination among men but not among women. Moreover, attributes of the labor market, companies, and vacancies matter. Beauty premiums are larger in big cities with higher concentrations of women and in male-focused research positions. Similarly, the beauty premium is larger for vacancies with higher remuneration.
    Keywords: appearance discrimination,beauty premium,pre-interview stage,field experiment
    JEL: C93 I21 J71
    Date: 2019
  11. By: Sun, Yu; Liu, Gordon G.; You, Wen; Wang, Meijiao
    Keywords: Labor and Human Capital
    Date: 2019–06–25
  12. By: Shengbo FENG (Energy Research Institute, China Academy of Macroeconomic Research, The National Development and Reform Commission); Masashi TAKETANI (Institute of Economic Research, Kyoto University); Yanmin HE (Faculty of economics, Otemon Gakuin University); Tun-Yen WANG (Institute of Economic Research, Kyoto University)
    Abstract: China already set up national target for carbon emission control before 2030. Based on experience of former target allocation, the way of both local voluntary commitments and negotiation between the central government and local governments to allocate the targets would help local governments set up energy conservation and carbon emission control initiatives. A target decomposition scheme is thus developed in this study. Combining the anticipation for the economic and social development situation during 2021-2030, the initial idea of decomposition mechanism of carbon emission control target is suggested.
    Keywords: carbon emission control, target decomposition, index evaluation system, clustering analysis
    JEL: O13 O38
    Date: 2019–07
  13. By: Adjemian, Michael K.; Smith, Aaron; He, Wendi
    Abstract: In 2018, China retaliated to U.S. trade action by levying a 25% retaliatory tariff on U.S. soybean exports. That tariff shifted market preferences so that Chinese buyers favored Brazilian soybeans. We use the relative price of a substitute (RPS) method to estimate that the resulting trade disruption effectively drove a wedge into the world soybean market, lowering U.S. prices at Gulf export locations by $0.65/bu on average for about five months, and increasing Brazilian prices by about $0.95/bu, compared to what would have been observed without the tariff in place. It is likely that the impact of China’s tariff on producers and purchasers of soybeans across the United States was heterogeneous and affected by local factors like transportation infrastructure, storage capacity, and crush facility proximity.
    Keywords: Agricultural and Food Policy, Demand and Price Analysis, International Relations/Trade
    Date: 2019–07

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.