nep-cna New Economics Papers
on China
Issue of 2021‒04‒05
six papers chosen by
Zheng Fang
Ohio State University

  1. Why has the birth rate relatively increased in China's wealthy cities? By Chen, Nana; Xu, Hangtian
  2. Explaining Trends in Adult Height in China: 1950 to 1990 By Minhee Chae; Tim Hatton; Xin Meng
  3. 'Your Driver is Didi and Minutes Away from Your Pick-Up Point': Understanding Employee Motivation in the Gig Economy of China By Mukhopadhyay, Boidurjo; Chatwin, Chris
  4. Volatility and Economic Systems: Evidence from A Large Transitional Economy By Wang, Boqun; Yang, Dennis Tao
  5. Data-intensive innovation and the State: evidence from AI firms in China By Martin Beraja; David Y. Yang; Noam Yuchtman
  6. Provider payment reform for Chinese hospitals: Policy transfer and internal diffusion of international models By Müller, Armin; Ten Brink, Tobias

  1. By: Chen, Nana; Xu, Hangtian
    Abstract: China’s wealthy cities tended to have low birth rates in past decades, but this relationship has disappeared in conjunction with the substantial relaxation of the one-child policy after 2011. This study develops a conceptual framework for the relationship between average household wealth and compliance with the one-child policy across cities and concludes that the compliance rate was greater in wealthier cities when above-quota births were fined according to household wealth and with limited liability. The relaxation of this policy has eliminated this inequality, leading to an increase in wealthy cities’ birth rates relative to those of other cities. A causal analysis exploiting variations in city-level birth rates and fertility policy compliance rates from 2008 to 2019 supports our hypotheses. Moreover, our results suggest that the fertility relaxation has resulted in a greater proportion of newborns in wealthy cities, which is expected to increase the next generation’s human capital.
    Keywords: one-child policy; two-child policy; birth rate; household income; China
    JEL: J13 J18 R10
    Date: 2021–02–01
  2. By: Minhee Chae; Tim Hatton; Xin Meng
    Abstract: This paper explores the changing trend of adult height in China for cohorts born in 1950-90. We use information on the household structure and local economic conditions during the individual?s childhood to explain the trend. We find that during the 40-year period, the growth rate of adult height increased, with the most substantial increase occurring in the 1980s. One important contributing factor to the growth of adult height is the continued increase in government per capita spending on health and education. The impressive growth in the 1980s was mainly due to the introduction of market-oriented economic reforms, rather than the advent of the One-Child Policy. We find that the positive effect of economic reforms was larger for urban dwellers than for their rural counterparts and within the rural areas the benefit was far greater for men than for women.
    Keywords: Height; China; economic reform
    JEL: I15 I18 J13 O1
    Date: 2021–03
  3. By: Mukhopadhyay, Boidurjo; Chatwin, Chris
    Abstract: In recognition of the importance and expansion of the gig economy, largely in developed and BRICs economies, along with the growing literature surrounding it, this research contributes towards an empirical and conceptual understanding of how employee motivation and retention are managed by the mobile app-based, multiple payment platformenabled, car-pooling Chinese giant DiDi. Both the exponential usage and evidently a diversified range of services offered by Didi has not only transformed the Chinese perception of using cabs, over their personal vehicle, in the 1.4 billion demographics but also invites emerging research in learning the tools for employee retention of a company that has a high regional scale of operations across all provinces in China. While the company employs over a million people at various contractual levels, the objective of this paper is to evaluate how levels of employee motivation, in a gig economy setting, largely affects employee effort and performance of DiDi drivers working long hours in major Chinese cities. The objective of this research is to qualitatively investigate the nature and effectiveness of Didi as a customer customiser using a thematic analysis and a conceptual framework, while also adding contextual knowledge on how a relatively new transport company retain employees in a leading BRICS economy, that is embedded with many faces of the gig economy.
    Keywords: gig economy,employee motivation,China,employee performance,ERG theory,Expectancy Theory, innovation,DiDi,mobile app-based enterprises,Emerging Economy,Platform Economy
    JEL: D86 J41 L14 L86 M51 M52 M54 M55 O30
    Date: 2021
  4. By: Wang, Boqun; Yang, Dennis Tao
    Abstract: This is the �rst paper to study the role played by economic transition in reducing output volatility. A dramatic decline in aggregate output volatility in China from central planning to market-oriented reforms in the past half century is documented in this paper. The output volatility measured by the standard deviation of real gross domestic product (GDP) growth over the speci�ed rolling windows declined by 73% from 1953-�1977 to 1978�-2008. The sharpest reduction occurred in 1978 when China began to initiate a series of market reforms. Since the inception of these reforms, the volatility continued to decline, dropping more than 30% from 1978-�1994 to 1995�-2008. During the planning period, the co-movements in the provincial output, which re�flected the systemic risks associated with the highly centralized economic and political systems in China, were found to be the primary source of the high output volatility.
    Keywords: Output Volatility Moderation, Transitional Economy, China
    JEL: C33 E31 E32 J00 R00
    Date: 2021
  5. By: Martin Beraja; David Y. Yang; Noam Yuchtman
    Abstract: Artificial intelligence (AI) innovation is data-intensive. States have historically collected large amounts of data, which is now being used by AI firms. Gathering comprehensive information on firms and government procurement contracts in China's facial recognition AI industry, we first study how government data shapes AI innovation. We find evidence of a precise mechanism: because data is sharable across uses, economies of scope arise. Firms awarded public security AI contracts providing access to more government data produce more software for both government and commercial purposes. In a directed technical change model incorporating this mechanism, we then study the trade-offs presented by states' AI procurement and data pro-vision policies. Surveillance states' demand for AI may incidentally promote growth, but distort innovation, crowd-out resources, and infringe on civil liberties. Government data provision may be justified when economies of scope are strong and citizens' privacy concerns are limited.
    Keywords: data, innovation, artificial intelligence, China, economies of scope, directed technical change, industrial policy, privacy, surveillance
    JEL: O30 P00 E00 L5 L63 O25 O40
    Date: 2021–03
  6. By: Müller, Armin; Ten Brink, Tobias
    Abstract: There are opposing views in the literature regarding the degree to which China's public administration adopted international models of administrative reform. Prospective payment systems constitute a formidable case for examining this question in the field of public hospital funding. In China's decentralized and fragmented health insurance system, different localities have chosen different approaches to replace retrospective with prospective payment models. Based on a relational case database, we analyzed how international payment reforms were introduced in a Chinese context as models with varying degrees of transfer and scopes of change. Furthermore, we reconstructed the process of diffusion, which was driven more by horizontal learning in the Urban Employees' Basic Medical Insurance (UEBMI), and more by hierarchical delegation in the New Rural Cooperative Medical Scheme (NRCMS). The two insurances were administered by different ministries, whose preferences facilitated the spread of different models of provider payment. Overall, the mainstream of reforms only achieved a limited displacement of retrospective payment: local governments often dropped the prospective payment aspect altogether or limited its application. In the NRCMS, more ambitious reforms were limited by state capacity, whereas the use of Medical Savings Accounts (MSAs) limited the potential of reforms in the UEBMI.
    Date: 2021

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