nep-cna New Economics Papers
on China
Issue of 2021‒01‒25
six papers chosen by
Zheng Fang
Ohio State University

  1. Chinese Import Competition, Offshoring and Servitization By Gu, Grace; Malik, Samreen; Pozzoli, Dario; Rocha, Vera
  2. Liquidity of China’s Government Bond Market: Measures and Driving Forces By Han, Gaofeng; Miao, Hui; Wang, Yabin
  3. Foreign Education, Ideology, and the Fall of Imperial China By WANG, Alina Yue; KUNG, James Kai-sing
  4. Should Australia be Concerned by Beijing's Trade Threats: Modelling the Economic Costs of Restrictions on Imports of Australian Coal By J.A. Giesecke; N.H. Tran; R. Waschik
  5. Research on the Online Consumption Effect of China’s Urbanization under Population Aging Background By Xuyang Li; Tongping Li; Hui Li; Junmei Qi; Linjie Hu
  6. Impact of Regional Reactions to War on Contemporary Chinese Trade By Xuejian Wang

  1. By: Gu, Grace (University of California Santa Cruz); Malik, Samreen (New York University AD); Pozzoli, Dario (Department of Economics, Copenhagen Business School); Rocha, Vera (Department of Strategy and Innovation, Copenhagen Business School)
    Abstract: This paper examines whether Chinese import competition increases the propensity for firms to offshore production or to cease any involvement in production by switching completely and permanently out of the manufacturing sector (servitization). Using a Danish employer-employee matched dataset covering a large sample of manufacturing firms over the 1995-2012 period, we find that import competition from China significantly increases offshoring but does not induce servitization. These findings are confirmed using various robustness tests as well as an analogous analysis of a Portuguese employer-employee matched dataset.
    Keywords: Foreign competition; Offshoring; Servitization
    JEL: F12 F14 O31
    Date: 2021–01–08
  2. By: Han, Gaofeng; Miao, Hui; Wang, Yabin
    Abstract: We construct a daily liquidity index of China’s government bond market using transaction data from the national interbank market over the past twenty years. The index is a composite of popular price-based and quantity-based metrics of liquidity. The composite indexes, obtained by averaging across different metrics or by applying principal component analysis, both point to a better liquidity condition after 2010. Market liquidity swings appear to be highly correlated with domestic funding liquidity and financial market volatility, but display less correlation to global macrofinancial indicators. Our findings suggest that further deepening of government bond market would support domestic financial stability and monetary operations down the road.
    Keywords: Government bond, Bond liquidity, Principal component analysis, Regime switching model
    JEL: G12
    Date: 2020–11–01
  3. By: WANG, Alina Yue; KUNG, James Kai-sing
    Abstract: It has long been accepted that education is an important determinant of economic growth. What is less often observed is that, through indoctrination, education can also shape preferences and ideology. Using the 1911 Chinese Revolution as example, we demonstrate how the Qing government’s intention to acquire knowledge useful for state building by sending students to study in Japan led to unexpected political consequences. By using the number of Chinese students in Japan as a proxy for the effects of foreign education, we show that counties with a higher density of overseas students had significantly higher participation in political parties, greater representation in electoral politics, and were more likely to declare independence from the Qing government. The content of education also mattered; political activism was significantly stronger in counties where more students studied arts and social sciences subjects. Schools and newspapers were the channels through which the ideology of nationalism was diffused.
    Keywords: Ideology, Nationalism, Political Transformation, Content of Education, Human Capital, Imperial China.
    JEL: N45 O15 O53 P48
    Date: 2020–10
  4. By: J.A. Giesecke; N.H. Tran; R. Waschik
    Abstract: The U.S.-China trade war can be viewed in part as a continuation of a wider recent pattern of use of trade instruments to advance political aims. Australia itself appears to have been subject to such instruments, with reports of a slowdown in processing of Australian coal imports through Chinese ports. Using a dynamic global model, we simulate the effects on Australia and China of a rise in Chinese barriers to Australian coal imports. We demonstrate that, when account is taken of trade diversion, foreign capital ownership, the terms of trade, resource mobility, and capital and production tax rates, the damage from Chinese coal trade sanction is far less than might be expected from a simple focus on the value of the affected trade alone. We explain the influence of these factors using a simple back-of-the-envelope model that reproduces the real consumption impact generated by the dynamic global model.
    Keywords: trade policy, coal embargo, multi-region CGE model
    JEL: F13 F17 C68
    Date: 2020–09
  5. By: Xuyang Li; Tongping Li; Hui Li; Junmei Qi (CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine); Linjie Hu
    Abstract: With the development of e-commerce, online consumption-a new sustainable consumption mode-has rapidly developed. Online shopping has become an important consumption method for Chinese residents, and the era of online consumption has arrived. Urbanization is an important foundation for the development of online consumption, and its impact on online consumption is becoming increasingly important. In addition, with the decline of fertility in China, the proportion of the elderly population is increasing. As the macro background of the current economic operation of China, population aging has long been a concern of the government. However, the existing research on urbanization, population aging and online consumption is insufficient. In this context, this study is of great significance to promote the sustainable development of the online consumption mode and enrich the theory of resident consumption in the era of the network economy. In this paper, by adopting the system generalized method of moments (GMM), we conducted an empirical analysis of the relationship between urbanization, population aging, and online consumption, based on panel data from 31 provinces in China from 2007 to 2017. Furthermore, we examined the regional heterogeneity of urbanization's online consumption effect. The results reveal that, first, urbanization has a positive relationship with online consumption. Second, urbanization's online consumption effect has regional differences, with the largest positive effect being in the western area of China, the second in the eastern area of China and the smallest in the central area of China. Third, aging inhibits the development of online consumption. Specifically, it mainly includes two aspects. On the one hand, aging has a direct negative impact on online consumption. On the other hand, aging has a moderating effect on urbanization's online consumption effect, which weakens the impact of urbanization. The rising of urban residents' income has significant explanatory power to the change of online consumption in the eastern and western regions. Therefore, the policy implications are as follows: promoting the strategic transformation of urbanization, giving full play to the online consumption effect of urbanization; adjusting and improving population policy to cope with the population aging; constantly raising people's income level and enhancing consumption potential.
    Keywords: population aging,moderating effect,online consumption,urbanization
    Date: 2019–08
  6. By: Xuejian Wang
    Abstract: Different regional reactions to war in 1894 and 1900 can significantly impact Chinese imports in 2001. As international relationship gets tense and China rises, international conflicts could decrease trade.We analyze impact of historic political conflict. We measure regional change of number of people passing imperial exam because of war. War leads to an unsuccessful reform and shocks elites. Elites in different regions have different ideas about modernization, and the change of number of people passing exam is quite different in different regions after war. Regional number of people passing exam increases 1% after war, imports from then empires decrease 2.050% in 2001, and this shows impact of cultural barrier. Manufactured goods can be impacted because brands can be identified easily. Risk aversion of expensive products in conservative regions can increase imports of equipment. Value chains need deep trust, and this decreases imports of foreign company and assembly trade.
    Date: 2020–12

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