nep-cna New Economics Papers
on China
Issue of 2020‒12‒14
nine papers chosen by
Zheng Fang
Ohio State University

  1. Growing like China: Firm performance and global production line position By David Chor; Kalina Manova; Zhihong Yu
  2. Transforming informal work and livelihoods in China By Carl Shu-Ming Lin; Linxiang Ye; Wei Zhang
  3. Trump, China, and the Republicans By Ben G. Li; Yi Lu; Pasquale Sgro; Xing Xu
  4. The Impact of Minimum Wages on Wages, Wage Spillovers, and Employment in China: Evidence from Longitudinal Individual-Level Data By Fang, Tony; Gunderson, Morley; Lin, Carl
  5. Pension and Health Services Utilization: Evidence from Social Pension Expansion in China By Chen, Shanquan; Chen, Xi; Law, Stephen; Lucas, Henry; Tang, Shenlan; Long, Qian; Xue, Lei; Wang, Zheng
  6. Parental Gender Stereotypes and Student Wellbeing in China By Chu, Shuai; Zeng, Xiangquan; Zimmermann, Klaus F.
  7. Social Assimilation and Labor Market Outcomes of Migrants in China By Cai, Shu; Zimmermann, Klaus F.
  8. Accounting for Chinese Exports By Loren Brandt; Kevin Lim
  9. Social Disadvantage and Children's Nutritional Status in Rural-Urban Migrant Households By Lin, Carl; van der Meulen Rodgers, Yana

  1. By: David Chor; Kalina Manova; Zhihong Yu
    Abstract: Global value chains have fundamentally transformed international trade and development in recent decades. We use matched firm-level customs and manufacturing survey data, together with Input-Output tables for China, to examine how Chinese firms position themselves in global production lines and how this evolves with productivity and performance over the firm lifecycle. We document a sharp rise in the upstreamness of imports, stable positioning of exports, and rapid expansion in production stages conducted in China over the 1992-2014 period, both in the aggregate and within firms over time. Firms span more stages as they grow more productive, bigger and more experienced. This is accompanied by a rise in input purchases, value added in production, and fixed cost levels and shares. It is also associated with higher profits though not with changing profit margins. We rationalize these patterns with a stylized model of the firm lifecycle with complementarity between the scale of production and the scope of stages performed.
    Keywords: Global value chains, production line position, upstreamness, firm heterogeneity, firm lifecycle, China.
    Date: 2020
  2. By: Carl Shu-Ming Lin; Linxiang Ye; Wei Zhang
    Abstract: The informal sector has long been viewed as a locus of the disadvantaged, unskilled, and inexperienced workers in under-developed and developing economies. Workers in the informal sector, however, can learn skills and gain experience that could help them switch to better-paying jobs in the formal sector. But evidence of this is limited. China constitutes an important case study because it is the most populous country and has the largest labour force, consisting of over 290 million rural-to-urban migrants whose employment is mostly informal.
    Keywords: China, Informal sector, livelihoods, Earnings
    Date: 2020
  3. By: Ben G. Li; Yi Lu; Pasquale Sgro; Xing Xu
    Abstract: The Republican Party has been the party most supportive of free trade in American politics for half a century. President Donald Trump, who is a Republican, holds a different stance from his party on free trade. We assess how Trump’s China tariffs in mid-2018 impacted the performance of his party in its midterm house elections later that year. We construct a measure of each county’s exposure to Trump’s China tariffs and merge that with the Republican share of votes in the county. We find that the counties heavily exposed to the tariffs were more supportive of their Republican house candidates. This association is stronger and causal in counties that previously voted for Democratic politicians. The Republican Party, despite losing its majority in the house, would have lost more seats without Trump’s China tariffs.
    Keywords: China, Donald Trump, Republican Party, trade, tariffs
    Date: 2020
  4. By: Fang, Tony (Memorial University of Newfoundland); Gunderson, Morley (University of Toronto); Lin, Carl (Bucknell University)
    Abstract: We use the substantial variation in both the magnitude and frequency of minimum wage changes that have occurred in China since its new minimum wage regulations in 2004 to estimate their impact on wages, wage spillovers, and employment. We use county-level minimum wage data merged with individual-level longitudinal data from the Urban Household Survey for the period 2004–09, spanning the period after the new minimum wage regulations were put in place. Our results indicate that minimum wage increases raise the wages of otherwise low-wage workers by a little less than half (41%) of the minimum wage increases. Depending upon the specification, these wage effects also lead to a 2 to 4 percentage point reduction in the probability of being employed, with a 2.8 percentage point reduction being our preferred estimate. We also find statistically significant but very small wage spillovers for those whose wages are just above the new minimum wage, but they are effectively zero for those higher up in the wage distribution.
    Keywords: minimum wage, China, wages, employment, wage spillovers
    JEL: J38 J88
    Date: 2020–11
  5. By: Chen, Shanquan; Chen, Xi; Law, Stephen; Lucas, Henry; Tang, Shenlan; Long, Qian; Xue, Lei; Wang, Zheng
    Abstract: The proportion of people aged 60 years or over is growing faster than other age groups. The well-being older adults depend heavily on their state of health. This study evaluates the effects of pensions on older adults' health service utilization, and estimates the size of pension required to influence such utilization. Using a nationally representative survey, the China Health and Retirement Longitudinal Study (CHARLS), we adopted a fuzzy regression discontinuity design and undertook segmented regression analysis. Pension demonstrated heterogeneous effects on health service utilization by income. We show that pension encouraged low-income individuals to use both outpatient (OR = 1.219, 95% 1.018-1.460) and inpatient services (OR = 1.269, 95% 1.020-1.579). In the meantime, it promoted self-treatment, specifically over-the-counter (OR = 1.208, 95% 1.037-1.407; OR = 1.206, 95% 1.024-1.419; respectively) and traditional Chinese medicines (OR = 1.452, 95% 1.094-1.932; OR = 1.456, 95% 1.079-1.955; respectively) among all income groups. However, receiving a pension had no effect on the frequency of outpatient or inpatient service use. Breakpoints for pension to promote health service utilization were mainly located in the range 55-95 CNY (7.1-12.3 EUR or 8.0-13.8 USD). Our study enriches the literature on pension and healthcare-seeking behaviour, and can be helpful in policy design and model formulation.
    Keywords: pension,health services utilization,regression discontinuity design,segmented regression
    JEL: I11 I18 J14 H55
    Date: 2020
  6. By: Chu, Shuai; Zeng, Xiangquan; Zimmermann, Klaus F.
    Abstract: Non-cognitive abilities are supposed to affect student's educational performance, who are challenged by parental expectations and norms. Parental gender stereotypes are shown to strongly decrease student wellbeing in China. Students are strongly more depressed, feeling blue, unhappy, not enjoying life and sad with no male-female differences while parental education does not matter.
    Keywords: Gender identity,gender stereotypes,student wellbeing,non-cognitive abilities,mental health,subjective wellbeing
    JEL: I12 I26 I31 J16
    Date: 2020
  7. By: Cai, Shu; Zimmermann, Klaus F.
    Abstract: Previous research has found identity to be relevant for international migration, but has neglected internal mobility as in the case of the Great Chinese Migration. However, the context of the identities of migrants and their adaption in the migration process is likely to be quite different. The gap is closed by examining social assimilation and the effect on the labor market outcomes of migrants in China, the country with the largest record of internal mobility. Using instrumental variable estimation, the study finds that identifying as local residents significantly increase migrants' hourly wages and reduce hours worked, although their monthly earnings remained barely changed. Further findings suggest that migrants with strong local identity are more likely to use local networks in job search, and to obtain jobs with higher average wages and lower average hours worked per day.
    Keywords: Social assimilation,identity,labor market,migration
    JEL: J22 J31 J61 Z13
    Date: 2020
  8. By: Loren Brandt; Kevin Lim
    Abstract: Rapid growth in Chinese exporting has spurred extensive research across multiple fields of economics investigating its effects. Yet, the causes of this growth remain less well-understood. We quantify the drivers of Chinese exporting using a general equilibrium model, estimated with detailed trade and production data that capture rich heterogeneity across destinations, firm ownerships, production locations, and sectors. Both external (foreign demand) and internal factors (productivity, firm entry, imported input access) were important drivers of high export growth from 2000-2007. A slowdown in export growth post-2007 is largely attributable to the disappearance of internal drivers, reinforced by weakening external factors.
    Keywords: China, Exports, Imports, Trade, Productivity, WTO, Market Access
    JEL: F14 F47 O47 O53
    Date: 2020–11–28
  9. By: Lin, Carl (Bucknell University); van der Meulen Rodgers, Yana (Rutgers University)
    Abstract: This article uses an innovative rural-urban migrant survey to assess how social disadvantage is associated with children's nutritional status in migrant households. Measures of social disadvantage are based on China's hukou system of household registration (designed to limit domestic migration flows by denying urban public services to migrants with rural registrations) and on son preference (stemming in part from the strict one-child policy). Regression results indicate that a rural hukou status is negatively associated with children's weight-for-age Z-scores, even after controlling for household characteristics, and girl children exhibit poorer nutritional status than boys. Results from a quantile decomposition procedure confirm that left-behind children have lower nutritional scores than children who migrate with their parents, and the gaps are biggest at lower portions of the distribution.
    Keywords: migration, China, children, health, nutrition
    JEL: I10 J61
    Date: 2020–11

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