nep-cna New Economics Papers
on China
Issue of 2020‒08‒24
nine papers chosen by
Zheng Fang
Ohio State University

  1. Can Technology Solve the Principal-Agent Problem? Evidence from China’s War on Air Pollution By Michael Greenstone; Guojun He; Ruixue Jia; Tong Liu
  2. Grandparenting and well-being of the elderly in China By Wang, Hao; Fidrmuc, Jan; Luo, Qi
  3. Inequality of Opportunity in Bodyweight among Middle-Aged and Older Chinese: A Distributional Approach By Nie, Peng; Ding, Lanlin; Jones, Andrew M.
  4. Going Bankrupt in China By Bo Li; Jacopo Ponticelli
  5. Investigating the fiscal resource curse: What's China got to do with it? By Daniel Chachu; Edward Nketiah-Amponsah
  6. Childhood Circumstances and Health Inequality in Old Age: Comparative Evidence from China and the United States By Chen, Xi; Yan, Binjian; Gill, Thomas M.
  7. Mask wars: China's exports of medical goods in times of COVID-19 By Fuchs, Andreas; Kaplan, Lennart; Kis-Katos, Krisztina; Schmidt, Sebastian S.; Turbanisch, Felix; Wang, Feicheng
  8. China's Missing Pigs: Correcting China's Hog Inventory Data Using a Machine Learning Approach By Yongtong Shao; Minghao Li; Dermot J. Hayes; Wendong Zhang; Tao Xiong; Wei Xie
  9. China’s Economic Demography Transition Strategy: A Population Weighted Approach to the Economy and Policy By Johnston, Lauren A.

  1. By: Michael Greenstone; Guojun He; Ruixue Jia; Tong Liu
    Abstract: We examine the introduction of automatic air pollution monitoring, which is a central feature of China’s “war on pollution.” Exploiting 654 regression discontinuity designs based on city-level variation in the day that monitoring was automated, we find that reported PM 10 concentrations increased by 35% immediately post–automation and were sustained. City-level variation in underreporting is negatively correlated with income per capita and positively correlated with true pre-automation PM 10 concentrations. Further, automation’s introduction increased online searches for face masks and air filters, suggesting that the biased and imperfect pre-automation information imposed welfare costs by leading to suboptimal purchases of protective goods.
    JEL: Q53 Q55
    Date: 2020–07
  2. By: Wang, Hao; Fidrmuc, Jan; Luo, Qi
    Abstract: Grandparenting duties can affect the well-being of the elderly both positively and negatively. This paper disentangles the interactions between grandparenting, quality of life, and life satisfaction in China. Using a panel dataset of 3,205 respondents in three waves of the China Health and Retirement Longitudinal Study (CHARLS) in 2011, 2013, and 2015, we find that grandparents who look after grandchildren are less at risk of depression, receive more financial and in-kind transfers from their children, and report greater life satisfaction than grandparents who do not look after grandchildren. These benefits vary across gender and rural-urban status, however. The positive effect of grandparenting is driven mainly by the direct effect with negligible mediating effect attributable to better quality of life.
    JEL: D13 O18
    Date: 2020–08–09
  3. By: Nie, Peng (Xi’an Jiaotong University); Ding, Lanlin (Xi’an Jiaotong University); Jones, Andrew M. (University of York)
    Abstract: Using the 2011 and 2015 waves of the China Health and Retirement Longitudinal Study (CHARLS) linked with the 2014 CHARLS Life History Survey, we provide a comprehensive analysis on inequality of opportunity (IOp) in both body mass index (BMI) and waist circumference (WC) among middle-aged and older Chinese. We find that IOp ranges from 65.5% to 74.6% for BMI (from 82.1% to 95.5% for WC). Decomposition results show that spatial circumstances such as urban/rural residence and province of residence are dominant. Health status and nutrition conditions in childhood are the second largest contributor. Distributional decompositions further reveal that inequality in bodyweight is not simply a matter of demographic (age and gender) inequalities; our set of spatial and health and nutrition conditions in childhood become much more relevant towards the right tails of the bodyweight distribution, where the clinical risk is focused.
    Keywords: inequality of opportunity, body mass index, waist circumference, CHARLS, Shapley-Shorrocks decomposition, unconditional quantile regressions
    JEL: D63 I12 I14
    Date: 2020–06
  4. By: Bo Li; Jacopo Ponticelli
    Abstract: Using new case-level data we document a set of stylized facts on bankruptcy in China and study how the staggered introduction of specialized courts across Chinese cities affected insolvency resolution and the local economy. For identification, we compare cases handled by specialized versus traditional civil courts within the same city. Specialized courts hire better-trained judges and cut case duration by 35%. State-owned firms experience larger declines in case duration relative to privately-owned firms, consistent with higher judicial independence. Cities introducing specialized courts experience faster firm entry, larger increase in average capital productivity and reallocation of employment out of "zombie" firms-intensive sectors.
    JEL: G33 K22 O16
    Date: 2020–07
  5. By: Daniel Chachu; Edward Nketiah-Amponsah
    Abstract: The term fiscal resource curse refers to countries' inability to raise taxes from a broad base in the presence of natural resources. We employ a novel instrumental variable strategy to estimate the causal effect of resource revenues on non-resource tax effort by exploiting the so-called 'China shock'. Since its 2001 accession to the World Trade Organization, China's non-renewable resource trade has driven up commodity prices, raising resource revenues among exporting countries.
    Keywords: China, infrastructure, Natural resources, Tax, tax effort, Trade
    Date: 2020
  6. By: Chen, Xi; Yan, Binjian; Gill, Thomas M.
    Abstract: This paper estimates the extent to which childhood circumstances contribute to health inequality in old age and evaluates the importance of major domains of childhood circumstances to health inequalities in the USA and China. We link two waves of the China Health and Retirement Longitudinal Study (CHARLS) in 2013 and 2015 with the newly released 2014 Life History Survey (LHS), and two waves of the Health and Retirement Study (HRS) in 2014 and 2016 with the newly released 2015 Life History Mail Survey (LHMS) in the USA, to quantify health inequality due to childhood circumstances for which they have little control. Using the Shapley value decomposition approach, we show that childhood circumstances may explain 7-16 percent and 14-30 percent of health inequality in old age in China and the USA, respectively. Specifically, the contribution of childhood circumstances to health inequality is larger in the USA than in China for self-rated health, mental health, and physical health. Examining domains of childhood circumstance, regional and rural/urban status contribute more to health inequality in China, while family socioeconomic status (SES) contributes more to health inequality in the USA. Our findings support the value of a life course approach in identifying the key determinants of health in old age. Distinguishing sources of health inequality and rectifying inequality due to early childhood circumstances should be the basis of policy promoting health equity.
    Keywords: Life course approach,Inequality of opportunity,Self-rated health,Mental health,Frailty,Childhood circumstances
    JEL: I14 J13 J14 O57
    Date: 2020
  7. By: Fuchs, Andreas; Kaplan, Lennart; Kis-Katos, Krisztina; Schmidt, Sebastian S.; Turbanisch, Felix; Wang, Feicheng
    Abstract: The COVID-19 outbreak has cut China's supply of and raised the world's demand for face masks, disinfectants, ventilators, and other critical medical goods. This article studies the economic and political factors that are associated with China's exports of medical equipment during the first two months of the global pandemic. Regression results show that - controlled for demand factors - countries with stronger past economic ties with China import more critical medical goods from China at both the national level and the level of Chinese provinces. Friendly political relations, such as the twinning of provinces, appear to work as a substitute for pre-existing economic ties at the provincial level. These findings imply that, to secure access to medical equipment in crises, countries are well advised to either diversify their sources or to develop closer relations with Beijing and China's provinces.
    Keywords: COVID-19,crisis management,medical equipment,face masks,strategic exports,disaster aid
    JEL: F14 F59 H12 H77 H84 P33
    Date: 2020
  8. By: Yongtong Shao; Minghao Li; Dermot J. Hayes (Center for Agricultural and Rural Development (CARD)); Wendong Zhang (Center for Agricultural and Rural Development (CARD)); Tao Xiong; Wei Xie
    Abstract: Small sample size often limits forecasting tasks such as the prediction of production, yield, and consumption of agricultural products. Machine learning offers an appealing alternative to traditional forecasting methods. In particular, Support Vector Regression has superior forecasting performance in small sample applications. In this article, we introduce Support Vector Regression via an application to China's hog market. Since 2014, China's hog inventory data has experienced an abnormal decline that contradicts price and consumption trends. We use Support Vector Regression to predict the true inventory based on the price-inventory relationship before 2014. We show that, in this application with a small sample size, Support Vector Regression out-performs neural networks, random forest, and linear regression. Predicted hog inventory decreased by 3.9% from November 2013 to September 2017, instead of the 25.4% decrease in the reported data.
    Date: 2020–08
  9. By: Johnston, Lauren A.
    Abstract: The first pandemic of the 21st century has brought Pyrrhic attention to one of the era’s greatest megatrends – population ageing. Today rich countries are disproportionately affected but increasingly the world’s elderly are residents of developing countries. In rich and poor countries alike, a policy approach that explicitly accounts for the interdependence of economic and demographic change – an economic demography transition approach - has never been more pressing. Thanks partly to the tragedy of history’s greatest Malthusian stagnation, that of mid-20th century China, Chinese policymakers implemented draconian population control measures alongside dramatic economic reforms from around 1980. This paper elaborates China’s consequential and ongoing economic demography transition strategy within the economic and development policy discourse. Amid epochal demographic, public health, and geo-economic change, this economic demography perspective is timely, unique and useful in extrapolation across all economies.
    Keywords: Population ageing,Economic Demography,Demographic Transition,China
    JEL: J11 J18 N35 O20
    Date: 2020

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