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on China |
| By: | Xiaojia Bao; Sebastian Galiani; Kai Li; Cheryl Long |
| Abstract: | In the past 40 years, a large number of children have been abandoned by their families or have been abducted in China. We argue that the implementation of the one-child policy has significantly increased both child abandonment and child abduction and that, furthermore, the cultural preference for sons in China has shaped unique gender-based patterns whereby a majority of the children who are abandoned are girls and a majority of the children who are abducted are boys. We provide empirical evidence for the following findings: (1) Stricter one-child policy implementation leads to more child abandonment locally and more child abduction in neighboring regions; (2) A stronger son-preference bias in a given region intensifies both the local effects and spatial spillover effects of the region's one-child policy on child abandonment and abduction; and (3) With the gradual relaxation of the one-child policy after 2002, both child abandonment and child abduction have dropped significantly. This paper is the first to provide empirical evidence on the unintended consequences of the one-child policy in terms of child trafficking in China. |
| JEL: | J12 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26492&r=all |
| By: | Funke, Michael; Li, Xiang; Tsang, Andrew |
| Abstract: | This paper studies monetary policy transmission in China’s peer-to-peer lending market. Using spectral measures of causality, we explore the impacts of Chinese monetary policy shocks on China’s P2P market interest rates and lending amounts. The estimation results indicate significant spectral Granger causality from monetary policy surprises to P2P lending rates for borrowers, but not the reverse. Unlike the lending channel for traditional banks, monetary policy shocks do not Granger-cause the credit amount in the P2P lending market. |
| JEL: | E52 E43 G23 C22 |
| Date: | 2019–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofitp:2019_023&r=all |
| By: | Min Zhu; Longmei Zhang; Daoju Peng |
| Abstract: | China’s growth potential has become a hotly debated topic as the economy has reached an income level susceptible to the “middle-income trap” and financial vulnerabilities are mounting after years of rapid credit expansion. However, the existing literature has largely focused on macro level aggregates, which are ill suited to understanding China’s significant structural transformation and its impact on economic growth. To fill the gap, this paper takes a deep dive into China’s convergence progress in 38 industrial sectors and 11 services sectors, examines past sectoral transitions, and predicts future shifts. We find that China’s productivity convergence remains at an early stage, with the industrial sector more advanced than services. Large variations exist among subsectors, with high-tech industrial sectors, in particular the ICT sector, lagging low-tech sectors. Going forward, ample room remains for further convergence, but the shrinking distance to the frontier, the structural shift from industry to services, and demographic changes will put sustained downward pressure on growth, which could slow to 5 percent by 2025 and 4 percent by 2030. Digitalization, SOE reform, and services sector opening up could be three major forces boosting future growth, while the risks of a financial crisis and a reversal in global integration in trade and technology could slow the pace of convergence. |
| Date: | 2019–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:19/263&r=all |
| By: | Ray C. Fair (Cowles Foundation, Yale University) |
| Abstract: | This paper discusses some macro links that are missing from trade models. A multicountry macroeconometric model is used to analyze the effects on the United States of increased import competition from China, an experiment that is common in the recent trade literature. In the macro story a fall in Chinese export prices is stimulative. Domestic prices fall, which increases real wage rates and real wealth, which increases household expenditures. In addition, the Fed may lower the interest rate because of the lower prices, which is stimulative. Trade models do not have these channels, and they likely overestimate the negative effects or underestimate the positive effects on total output and employment from increased Chinese import competition. They lack some important aggregate demand channels, which are not likely second order. |
| Keywords: | Trade models, Macroeconomics |
| JEL: | F1 F4 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2214&r=all |
| By: | Fei Han; Emilia M Jurzyk; Wei Guo; Yun He; Nadia Rendak |
| Abstract: | High household indebtedness could constrain future consumption growth and increase financial stability risks. This paper uses household survey data to analyze both macroeconomic and finanical stability risks from the rapidly rising household debt in China. We find that rising household indebtedness could boost consumption in the short term, while reducing it in the medium-to-long term. By stress testing households’ debt repayment capacity, we find that low-income households are most vulnerable to adverse income shocks which could lead to signficant defaults. Containing these risks would call for a strengthening of systemic risk assessment and macroprudential policies of the household sector. Other policies include improving the credit registry system and establishing a well-functioning personal insolvency framework. |
| Date: | 2019–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:19/258&r=all |
| By: | Hui Chen; Zhuo Chen; Zhiguo He; Jinyu Liu; Rengming Xie |
| Abstract: | We provide causal evidence for the value of asset pledgeability. Our empirical strategy is based on a unique feature of the Chinese corporate bond markets, where bonds with identical fundamentals are simultaneously traded on two segmented markets that feature different rules for repo transactions. We utilize a policy shock on December 8, 2014, which rendered a class of AA+ and AA bonds ineligible for repo on one of the two markets. By comparing how bond prices changed across markets and rating classes around this event, we estimate that an increase in the haircut from 0 to 100% would result in an increase in bond yields in the range of 40 to 83 bps. These estimates help us infer the magnitude of the shadow cost of capital in China. |
| JEL: | G12 G18 G23 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26520&r=all |
| By: | Sen Zhang (China Economics and Management Academy, Central University of Finance and Economics, Beijing, China); Yangyang Ji (China Economics and Management Academy, Central University of Finance and Economics, Beijing, China); Tianye Lin (China Economics and Management Academy, Central University of Finance and Economics, Beijing, China) |
| Abstract: | The application of Blanchard and Quah's (1989) method to Chinese data always obtains counterintuitive responses of output and the price level to demand and supply shocks, referred to in the literature as the "slope puzzle." Empirical findings of this paper reveal that the low-frequency movement in the price level causes this puzzle, which arises from the relative price of investment goods, and the friction in China's financial market drives this movement. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:cuf:wpaper:609&r=all |
| By: | Eugenio M Cerutti; Shan Chen; Pragyan Deb; Albe Gjonbalaj; Swarnali A Hannan; Adil Mohommad |
| Abstract: | The trade discussions between the U.S. and China are on-going. Not much is known about the shape and nature of a potential agreement, but it seems possible that it would include elements of managed trade. This paper attempts to examine the direct, first-round spillover effects for the rest of the world from managed trade using three approaches. The results suggest that, in the absence of a meaningful boost in China’s domestic demand and imports, bilateral purchase commitments are likely to generate substantial trade diversion effects for other countries. For example, the European Union, Japan, and Korea are likely to have significant export diversion in a potential deal that includes substantial purchases of U.S. vehicles, machinery, and electronics by China. At the same time, a deal that puts greater emphasis on commodities would put small commodity exporters at a risk. This points to the advantages of a comprehensive agreement that supports the international system and avoids managed bilateral trade arrangements. |
| Date: | 2019–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:19/251&r=all |