nep-cna New Economics Papers
on China
Issue of 2020‒06‒08
six papers chosen by
Zheng Fang
Ohio State University

  1. Private Educational Expenditure Inequality between Migrant and Urban Households in China’s Cities By Yiwen Chen; Ioana Salagean; Benteng Zou
  2. Is being the only child harmful to psychological health?: Evidence from an instrumental variable analysis of China's One-Child Policy By Shuxi Zeng; Fan Li; Peng Ding
  3. Heterogeneous Impact of Non-Tariff Measures through the Global Value Chains: Empirical Evidence from China By Qizhong Yang; Tsunehiro Otsuki
  4. Cultural Diversity and Foreign Direct Investment By Wei Feng; Yanrui Wu; Yue Fu
  5. China's Agricultural Imports under the Phase One Deal: Is Success Possible? By Xi He; Dermot J. Hayes; Wendong Zhang
  6. Six-Country Survey on COVID-19 By Belot, Michèle; Choi, Syngjoo; Jamison, Julian C.; Papageorge, Nicholas W.; Tripodi, Egon; van den Broek-Altenburg, Eline

  1. By: Yiwen Chen (Central Bank of Luxembourg); Ioana Salagean (STATEC); Benteng Zou (CREA, Université du Luxembourg)
    Abstract: China’s household registration (hukou) system restricts access to public schools to children without local city hukou. Migrant households thus need to finance privately all education-related costs their children incur. In contrast, local urban households often top- up their spending with private tutoring. Consequently, private educational expenditure of households in China’s cities reflects both willingness to investment in human capital and institutional constraints. We compare the educational expenditure of parents migrating with children to China’s cities to that of local urban parents, with a special focus on the role of the household registration system (hukou) in shaping these inequalities. We find that overall expenditure of migrants overwhelmingly exceeds that of locals after controlling for social and economic characteristics, but expenditure types are different. More detailed analysis of three subcategories of the education-related expenditure shows that migrant households spend more on tuition and sponsorship compared to households with local city hukou, but much less on private tutoring.
    Keywords: Chinese internal migrant children; educational investment; hukou registration
    JEL: O15 I31 J13 R23
    Date: 2020
  2. By: Shuxi Zeng; Fan Li; Peng Ding
    Abstract: This paper evaluates the effects of being the only child in a family on psychological health, leveraging data on the One-Child Policy in China. We use an instrumental variable approach to address the potential unmeasured confounding between the fertility decision and psychological health, where the instrumental variable is an index on the intensity of the implementation of the One-Child Policy. We establish an analytical link between the local instrumental variable approach and principal stratification to accommodate the continuous instrumental variable. Within the principal stratification framework, we postulate a Bayesian hierarchical model to infer various causal estimands of policy interest while adjusting for the clustering data structure. We apply the method to the data from the China Family Panel Studies, and we find small but statistically significant negative effects of being the only child on self-reported psychological health for some subpopulations. Our analysis also reveals treatment effect heterogeneity with respect to both observed and unobserved characteristics. We also conduct sensitivity analysis to assess the key instrumental variable assumptions, and carry out simulations to compare the proposed methods with common alternative methods.
    Date: 2020–05
  3. By: Qizhong Yang (College of Economics, Aoyama Gakuin University); Tsunehiro Otsuki (Osaka School of International Public Policy, Osaka University)
    Abstract: This paper investigates the impact of non-tariff measure (NTM)’s stringency on Chinese firms’ positioning in the GVC, which is measured by two types of GVC positioning indices. We then estimate the impact of NTMs on various firm performance by paying special attention to how the impacts vary across firms with different positioning in the GVC. The results show that NTMs imposed against and imposed by China could significantly reduce firms’ linkages with foreign countries, thereby reducing the firms’ importance within the GVC. We also find that stricter NTMs could even hinder firms’ innovative activities and decrease exports and imports. Further analysis indicates that these negative impacts of NTMs on firms are heterogeneous across firms depending on their original position in the GVC.
    Keywords: Global value chain, Non-tariff measure
    JEL: F14 F23
    Date: 2020–05
  4. By: Wei Feng (School of Management and Economics, Southeast University, China); Yanrui Wu (Economics Discipline, Business School, University of Western Australia); Yue Fu (School of Management and Economics, Southeast University, China)
    Abstract: In this paper, we first propose a theoretical model and derive hypotheses about the relationship between cultural diversity and foreign direct investment (FDI). We then test these hypotheses through regression analysis of a dataset of 230 Chinese cities covering the period of 2000-2014. It is shown that cultural diversity and FDI absorption are negatively correlated. The main mechanism is that cultural diversity impedes human capital development and hence obstructs FDI absorption. However, this negative relationship disappears gradually over time. In addition, it is also shown that there are threshold and spatial spillover effects. This research not only enriches the theory of FDI location, but also has implications for FDI policy-making.
    Keywords: Cultural diversity, FDI absorption, Economic growth, China
    JEL: F21 F41 G18
    Date: 2020
  5. By: Xi He; Dermot J. Hayes (Center for Agricultural and Rural Development (CARD)); Wendong Zhang (Center for Agricultural and Rural Development (CARD))
    Abstract: We examine China's committed agricultural purchases under the phase one trade deal and whether it can fulfill those commitments due to the COVID-19 pandemic. We review China's actual agricultural imports from the United States and other countries up to the first quarter of 2020 and analyze trade deal obligations China must still meet by the end of 2020. We use prior seasonal patterns and US-China price differentials to predict China's agricultural imports from the United States in 2020. We examine total agricultural and related products with special focus on corn, soybeans, cotton, sorghum, pork, and beef. The data show China currently has an enormous market demand for agricultural imports, and, to date, has imported large quantities of pork, cotton, sorghum, and soybeans from the United States. However, China imports an even greater amount of agricultural products from other countries, which, in part, reflects a continued diversification away from US agricultural imports before and during the trade war. We predict China will import $18.60 billion in agricultural products from the United States in 2020, far behind the phase one target of $36.5 billion. The first quarter of 2020 was a trying time for agricultural trade, especially for China, so there is still room for optimism, and we see several positive signs that China will accelerate its agricultural purchases. First, US-China price differentials of relevant commodities recently increased, providing a market signal for China to increase imports from the United States. Second, there are indications that, beginning in October, China plans to import large quantities of corn, as its domestic supply gap has widened. Third, China has announced its intention to purchase 20 million tons of corn, 10 million tons of soybeans, and one million tons of cotton for its national reserve. Fourth, China is short on animal protein due to the African Swine Fever outbreak, and thus is purchasing an increasing share from the United States. Fifth, China is making good progress meeting the regulatory and structural changes promised as part of the phase one deal, including updating lists of US facilities eligible to export distillers dried grains with solubles and beef and pork products lists. However, US-China trade prospects depend critically on COVID-19's impact on international logistics and China's political willingness to allow US imports to return to and exceed pre-trade-war levels. We provide a commodity specific estimate of what China will need to import from the US in the last three quarters if it is to meet the terms of the deal by the end of 2020.
    Date: 2020–05
  6. By: Belot, Michèle (European University Institute); Choi, Syngjoo (University College London); Jamison, Julian C. (University of Exeter); Papageorge, Nicholas W. (Johns Hopkins University); Tripodi, Egon (European University Institute); van den Broek-Altenburg, Eline (University of Vermont)
    Abstract: This paper presents a new data set collected on representative samples across 6 countries: China, South Korea, Japan, Italy, the UK and the four largest states in the US. The information collected relates to work and living situations, income, behavior (such as social-distancing, hand-washing and wearing a face mask), beliefs about the Covid 19 pandemic and exposure to the virus, socio-demographic characteristics and pre-pandemic health characteristics. In each country, the samples are nationally representative along three dimensions: age, gender, and household income, and in the US, it is also representative for race. The data were collected in the third week of April 2020. The data set could be used for multiple purposes, including calibrating certain parameters used in economic and epidemiological models, or for documenting the impact of the crisis on individuals, both in financial and psychological terms, and for understanding the scope for policy intervention by documenting how people have adjusted their behavior as a result of the Covid-19 pandemic and their perceptions regarding the measures implemented in their countries. The data is publicly available.
    Keywords: COVID-19, data, behaviours, health, beliefs, epidemic
    JEL: I0 J0
    Date: 2020–05

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