nep-cna New Economics Papers
on China
Issue of 2020‒01‒20
ten papers chosen by
Zheng Fang
Ohio State University

  1. Deregulation as a Source of China’s Economic Growth By Shiyuan Pan; Kai Xu; Kai Zhao
  2. Analysis of official deceased organ donation data casts doubt on credibility of China’s organ transplant reform By Robertson, Matthew Peter; Hinde, Raymond L.; Lavee, Jacob
  3. "Is China's Low Fertility Rate Caused by the Population Control Policy?" By Liu Qiang; Fernando Rios-Avila; Han Jiqin
  4. Straw Burning, PM2.5 and Death: Evidence from China By Guojun He; Tony Liu; Maigeng Zhou
  5. Knowledge Spillovers Within China’s System of Research Institutes By Renai Jiang; Daniel Tortorice; Zhaohui Xuan
  6. Income Inequality and Subjective Wellbeing: Panel Data Evidence from China By Zhang, Quanda; Awaworyi Churchill, Sefa
  7. Population Aging, Credit Market Frictions, and Chinese Economic Growth By Michael Dotsey; Wenli Li; Fang Yang
  8. Corporate Governance and Liquidity Risk of Bank of China By YAN, SHIWEI
  9. Trade Liberalization, Input Intermediaries and Firm Productivity: Evidence from China By Fabrice Defever; Michele Imbruno; Richard Kneller
  10. Mobility endowment and entitlements mediate resilience in rural livelihood systems By Tebboth, M.G.L.; Conway, D.; Adger, W.N.

  1. By: Shiyuan Pan (Zhejiang University); Kai Xu (Zhejiang University); Kai Zhao (University of Connecticut)
    Abstract: We develop a two-sector growth model of vertical structure in which the up-stream sector features Cournot competition and produces intermediate goods that are used in the downstream sector for the production of final goods. In such a ver-tical structure, we show that deregulation and increased market competition in the upstream sector does not only increase its own productivity, but also has a substan-tial spill-over effect on the productivity of the downstream sector through affecting factor prices. We calibrate the model to the Chinese economy and use the calibrated model to quantitatively evaluate the extent to which deregulation in the upstream market in China from 1998 to 2007 accounts for the rapid economic growth over the same period. Our quantitative experiments suggest that deregulation in the up-stream market in China from 1998 to 2007 can account for a significant fraction of China’s economic growth during this period partly due to the significant spillover effect it has on the downstream sector. In addition, our model can also match sev-eral relevant observations in China during the same period including high and rising returns to capital, declining markups.
    Keywords: Deregulation; Economic Growth; Vertical Structure
    JEL: E20 O41
    Date: 2020–01
  2. By: Robertson, Matthew Peter (Australian National University); Hinde, Raymond L.; Lavee, Jacob
    Abstract: Background: Since 2010 the People’s Republic of China has been engaged in an effort to reform its system of organ transplantation by developing a voluntary organ donation and allocation infrastructure. This has required a shift in the procurement of organs sourced from China’s prison and security apparatus to hospital-based voluntary donors declared dead by neurological and/or circulatory criteria. Chinese officials announced that from January 1, 2015, hospital-based donors would be the sole source of organs. This paper examines the availability, transparency, integrity, and consistency of China’s official transplant data. Methods: Forensic statistical methods were used to examine key deceased organ donation data sets from 2010 to 2018 . Two central-level datasets — published by the China Organ Transplant Response System (COTRS) and the Red Cross Society of China — are tested for evidence of manipulation, including conformance to simple mathematical formulae, arbitrary internal ratios, the presence of anomalous data artefacts, and cross-consistency. Provincial-level data in five regions are tested for coherence, consistency, and plausibility, and individual hospital data in those provinces are examined for consistency with provincial-level data. Results: COTRS data conforms almost precisely to a mathematical formula (which first appeared to be a general quadratic, but with further confirmatory data was discovered to be a simpler one-parameter quadratic) while Central Red Cross data mirrors it, albeit imperfectly. The analysis of both datasets suggests human-directed data manufacture and manipulation. Contradictory, implausible, or anomalous data artefacts were found in five provincial datasets, suggesting that these data may have been manipulated to enforce conformity with central quotas. A number of the distinctive features of China's current organ procurement and allocation system are discussed, including apparent misclassification of nonvoluntary donors as voluntary. Conclusion: A variety of evidence points to systematic falsification and manipulation of official organ transplant datasets and the misclassification of donors in China. This takes place alongside genuine voluntary organ transplant activity, which is often incentivized by large cash payments. These findings are relevant for international interactions with China’s organ transplantation system.
    Date: 2019–01–31
  3. By: Liu Qiang; Fernando Rios-Avila; Han Jiqin
    Abstract: Whether China's low fertility rate is the consequence of the country's strict population control policy is a puzzling question. This paper attempts to disentangle the Chinese population control policy's impacts on the fertility rate from socioeconomic factors using the synthetic control method proposed by Abadie and Gardeazabal (2003). The results indicate that the population control policy significantly decreased China's birth rate after the "Later, Longer, and Fewer" policy came into force, but had little effect on the birth rate in the long run. We estimate that between 164.2 million and 268.3 million prevented births from 1971 to 2016 can be attributed to the Chinese population control policy. In addition, we implement a placebo study to check the validity of the method and confirm the robustness of the paper’s conclusions.
    Keywords: : Birth Rate; China; Population Control Policy; Synthetic Control Method; Placebo Study
    JEL: C21 J13 Q56
  4. By: Guojun He (Division of Social Science, Division of Environment and Sustainability, Department of Economics, The Hong Kong University of Science and Technology.); Tony Liu (Division of Social Science, The Hong Kong University of Science and Technology.); Maigeng Zhou (National Center for Chronic and Non-Communicable Disease Control and Prevention, Chinese Center for Disease Control and Prevention.)
    Abstract: This study uses satellite data to detect agricultural straw burnings and estimates its impact on air pollution and health in China. We find that straw burning increases particulate matter pollution and causes people to die from cardio-respiratory diseases. Middle-aged and old people in rural areas are particularly sensitive to straw burning pollution. We estimate that a 10μg/m3 increase in PM2.5 will increase mortality by 3.25%. Subsidizing the recycling of straw brings significant health benefits and is estimated to avert 21,400 pre-mature deaths annually.
    Date: 2019–05
  5. By: Renai Jiang (School of Economics and Finance, Xian Jiaotong University); Daniel Tortorice (Department of Economics, College of the Holy Cross); Zhaohui Xuan (Chinese Academy of Science and Technology for Development)
    Abstract: We use a novel, fifteen-year panel dataset on China’s system of research institutes to examine the determinates of knowledge production, the role external factors play in increasing research productivity, and the extent to which distance mitigates these spillovers. We find robust evidence that knowledge inputs like R&D personnel increase patenting and publication. External R&D spending in the institute’s province and the institute’s industry knowledge stock spill over into increased knowledge production. We find that being located on average farther from institutes engaged in similar research reduces the impact of these spillovers. These results have important policy implications as China attempts to increase economic activity away from the coast and aims to improve the productivity of its research institute sector.
    Keywords: China, R&D, Research Policy, Knowledge Spillovers
    JEL: O31 O32 O33 L2
    Date: 2019–12
  6. By: Zhang, Quanda; Awaworyi Churchill, Sefa
    Abstract: Using four waves of longitudinal data from the China Family Panel Studies (CFPS), we examine the effects of income inequality on subjective wellbeing (SWB). We take a dual approach in measuring income inequality, and thus, we examine the effects of inequality using province-level Gini coefficient as well as between-group inequality or identity-related inequality defined as the income gap between migrants without urban household registration identity (hukou) and urban residents. We find negative effects of both province-level income inequality and between-group income inequality on SWB, measured by life satisfaction. Our results also show that the effects of income inequality on SWB is stronger for rural hukou residents compared to urban hukou residents. These findings are robust to alternative ways of measuring SWB and income inequality. In addition, we find evidence suggesting that neighbourhood trust is an important channel through which income inequality operates to reduce SWB. We suggest policies that promote trust in communities with high inequality with a view of addressing the negative effects of inequality on SWB.
    Keywords: Subjective wellbeing, Identity, Inequality, hukou, Life satisfaction, China
    JEL: D63 I31
    Date: 2019–12–11
  7. By: Michael Dotsey; Wenli Li; Fang Yang
    Abstract: We build a unified framework to quantitatively examine population aging and credit market frictions in contributing to Chinese economic growth between 1977 and 2014. We find that demographic changes together with endogenous human capital accumulation account for a large part of the rise in per capita output growth, especially after 2007, as well as some of the rise in savings. Credit pol-icy changes initially alleviate the capital misallocation between private and public firms and lead to significant increases in both savings and output growth. Later, they distort capital allocation. While contributing to further increase in savings, the distortion slows down economic growth. Among factors that we consider, increased life expectancy and financial development in the form of reduced inter-mediation cost are the most important in driving the dynamics of savings and growth.
    Keywords: Aging; Credit policy; Household saving; Output growth; China
    JEL: E21 J11 J13 L52
    Date: 2019–12–20
  8. By: YAN, SHIWEI
    Abstract: The aim of this study is to exam the relationship between the return on asset (ROA) and the internal, external factors of the companies.Kupiec, P. , & Lee, Y. (2012), stated that ROA is very useful statistic for comparing the profitability of banks. The companies I had chosen for this study are Bank of China.I collected this bank’s data from 2014 to 2018.The independent variables used for this study are current ratio,credit risk,operating margin,CGI, GDP,inflation, interest rate,and exchange rate, while the dependent variable is ROA. We used SPSS to analyse the statistics and the relationship between the dependent variable and the independent variables.
    Keywords: ROA, Bank of China,independent variables ,dependent variable
    JEL: G3 G32 O16
    Date: 2019–11–21
  9. By: Fabrice Defever; Michele Imbruno; Richard Kneller
    Abstract: We investigate theoretically and empirically the role of wholesalers in mediating the productivity effects of trade liberalization. Intermediaries provide indirect access to foreign produced inputs. The productivity effects of input tariff cuts on firms that do not directly import therefore depends on the extent that wholesalers are a feature of input supply within an industry. Using firm level data from China, we document that wholesalers play no such role for direct importers. However, other firms experience productivity gains from reducing input tariffs if trade intermediation of foreign inputs within their sector is high. They suffer efficiency losses otherwise.
    Keywords: firm heterogeneity, trade liberalization, intermediate inputs, productivity, intermediaries, China
    JEL: F12 F13
    Date: 2019
  10. By: Tebboth, M.G.L.; Conway, D.; Adger, W.N.
    Abstract: In economically marginal rural areas, choice in livelihood strategy such as decisions to move location mediates levels of individual and household resilience under conditions of environmental change. It is widely recognised that endowments associated with mobility and the entitlement to mobility are unevenly distributed across populations. This paper integrates these insights and conceptualises location choice as a set of mobility endowments and mobility entitlements. Through focussing on endowments and entitlements, the paper explores how choice affects the ability to be mobile and its role in mediating levels of resilience to livelihood shocks associated with changing environmental conditions. The research design involves measuring the impact of different climatic perturbations in rural locations in Anhui Province, China. Mixed methods of rural appraisal, life history interviews, and a household survey generate objective and perceived elements of individual and household responses to risks. These data are augmented by biophysical observations on the nature of the climatic perturbations. The results show that mobility endowments and mobility entitlements are important in determining the impact of mobility on resilience. The life history interview data highlight significant individual agency within the structures that impact on individual choices. Further, individuals and households who possess the ability to decide and to subsequently enact decisions about mobility, are shown to be more resilient compared to other individuals and households that lack such ability. Moreover, households practicing short-term, circular mobility are more resilient than those households that practice long-term mobility. The study confirms that, in these instances, choice and the ability to enact those choices mediates resilience and highlights the implications of location decisions but also the conditions in which those decisions are made.
    Keywords: Mobility; Choice; Resilience; Adaptation; China
    JEL: N0
    Date: 2019–01–01

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