nep-cna New Economics Papers
on China
Issue of 2021‒10‒04
five papers chosen by
Zheng Fang
Ohio State University

  1. EU-China engagement in humanitarian aid: Different approaches, shared interests? By Friesen, Ina; Janauschek, Leon
  2. The Economic Impacts of the US-China Trade War By Pablo Fajgelbaum; Amit Khandelwal
  3. China’s outward direct investment and its impact on the domestic economy By Margit Molnar; Ting Yang; Yusha Li
  4. Exploring the Antibiotics Innovation System and R&D policies in China: Mission Oriented Innovation? By Yuhan Bao; Adrian Ely; Michael M. Hopkins; Xianzhe Li; Yangmu Huang
  5. Forecasting the vaccine uptake rate: An infodemiological study in the US By Xingzuo Zhou; Yiang Li

  1. By: Friesen, Ina; Janauschek, Leon
    Abstract: Protracted crises and frequent natural disasters have generated an unprecedented number of people in need of humanitarian assistance. The international community faces a great challenge in supporting these populations, as the gap between needs and available funding is growing. To close this resource gap, the European Union (EU) aims to step up its engagement with emerging donors, particularly China, to increase their level of funding. Although China has previously been reluctant to engage in the international humanitarian system, its response to the COVID-19 pandemic indicates a change in attitude. Over the past year, China has delivered hundreds of tonnes of personal protective equipment (PPE) to over 150 countries and dispatched medical teams abroad. It has also donated $100 million to the World Health Organization (WHO) and the United Nations (UN) and pledged to establish a global humanitarian response depot and hub in China in cooperation with the UN. Amidst increasing geopolitical tensions between China and the EU, China's growing humanitarian engagement opens an opportunity for the EU to engage with China in the humanitarian sector. However, rather than framing China's increased engagement in solely financial terms, the EU should develop a long-term strategy as to how to engage with China on humanitarian matters. A dialogue that takes both parties' different approaches towards humanitarian aid into account and searches for common ground could open the door towards possible cooperation. This would not only help in narrowing the funding gap but carry the potential for greater coordination and consequently more effective assistance provision. China conceptualises humanitarian aid as a subcategory of development aid and provides the majority of its assistance bilaterally. Beijing's state-centric approach to humanitarian assistance means in practice that it engages mostly in the aftermath of natural disasters rather than conflict settings. The EU, on the other hand, has a separate humanitarian aid policy that guides the allocation of funds and provides its humanitarian assistance through non-governmental organisations (NGOs), UN agencies and the International Committee of the Red Cross (ICRC). This Briefing Paper maps out the characteristics of Chinese humanitarian aid and outlines two areas on which the EU's tentative steps towards a dialogue with China could focus. Food security sector: Food insecurity is a key component in existing humanitarian needs, only exacerbated by the COVID-19 pandemic. Food assistance and nutrition are already a key area of engagement for the EU and China. The EU should advocate for China to scale up its contributions to global food security through the World Food Programme (WFP), with whom China has a good working relationship. This could be combined with a political dialogue on how to foster cooperation on food security assistance. Anticipatory humanitarian aid: Disaster risk reduction, preparedness and response play an increasingly important role in global humanitarian aid. China has built up its most significant expertise in response to natural disasters. Enhancement of disaster risk reduction is one of the strategic priorities of the Directorate-General for European Civil Protection and Humanitarian Aid Operations (DG ECHO) for 2020-2024. In light of both parties' interest in anticipatory humanitarian aid, knowledge exchange in this area has the potential to open the door for future cooperation.
    Date: 2021
  2. By: Pablo Fajgelbaum; Amit Khandelwal
    Abstract: In 2018, the US launched a trade war with China, an abrupt departure from its historical leadership in integrating global markets. By late 2019, the US had tariffed roughly $350 billion of Chinese imports, and China had retaliated on $100 billion US exports. Economists have used a diversity of data and methods to assess the impacts of the trade war on the US, China and other countries. This article reviews what we have learned to date from this work.
    JEL: F0
    Date: 2021–09
  3. By: Margit Molnar; Ting Yang; Yusha Li
    Abstract: Overseas direct investment by Chinese firms increased eight fold over the past decade, making the country as an important investor in stock terms as Japan. Investing in leasing and business services appears to make up nearly half of China’s ODI stock according to official sources, though it is over-estimated owing to the fact that all investment through third parties and vehicles appears under this sector, not under the one where the investment is actually made. Correcting for this caveat by using firm-level M&A and greenfield investment data indicates that in fact China’s ODI mostly goes to resource-based manufacturing. Also, China is just as an important manufacturing investor as is Japan. Estimation results show that overseas direct investment affects domestic employment negatively in the majority of sectors, indicating substitution instead of a complementary relationship. Furthermore, ODI reduces the speed of labour market adjustment to its long-run equilibrium and increases the domestic price elasticity of demand for labour. There is considerable heterogeneity across sectors, but the impact of ODI on domestic fixed asset investment tends to be negative in most sectors.
    Keywords: fixed asset investment, greenfield investment, labour market adjustment, M&A, ODI, overseas direct investment
    JEL: F21 F23 F62 F63 F66
    Date: 2021–10–05
  4. By: Yuhan Bao (School of Public Policy and Management, Tsinghua University. China); Adrian Ely (Science Policy Research Unit, University of Sussex Business School, Falmer, Brighton, UK); Michael M. Hopkins (Science Policy Research Unit, University of Sussex Business School, Falmer, Brighton, UK); Xianzhe Li (School of Public Health, Peking University, China); Yangmu Huang (School of Public Health, Peking University, China)
    Abstract: One possible response to the growing problem of Antimicrobial Resistance (AMR) in pathogenic infections is the development of new types of antibiotics. However, the pharmaceutical companies that have traditionally led such innovation face a lack of incentives at the present time due to high levels of market uncertainty and low expected returns. Mission oriented innovation with coordinated investment and market-shaping policies may offer an approach to accelerating antibiotic innovation. This paper aims to evaluate whether preCovid-19 Chinese policies concerning AMR can be seen as constituting a mission-oriented approach and whether these policies have influenced antibiotics innovation in China. It adopts a mixed method approach to deliver several insights. By using historical event analysis based on data collected from interviews, public and commercial databases as well as policy documents, the paper finds that China’s recent actions concerning AMR since 2008 comprise many elements of mission-oriented innovation policy. The National Action Plan to Contain AMR has provided a clear mission since 2016 to tackle the problem of AMR and provides the opportunity to coordinate and integrate these policies into a more coherent and evolving mission-oriented innovation approach. Analysis of relevant research grants and publications suggest that these policies (including the 2016 National Action Plan) have drawn the scientific community towards antibiotics research and provided more support to this area. Case studies following the development of new antibiotics are used to illustrate how the established elements of mission oriented innovation policy have or have not contributed to antibiotics innovation in China. Further research is required to more comprehensively analyse R&D investments, and to understand the effects of recent policies, especially after 2016.
    Keywords: Antimicrobial Resistance, mission-oriented innovation, National S&T major research project, market shaping policy
    Date: 2021–08
  5. By: Xingzuo Zhou; Yiang Li
    Abstract: A year following the initial COVID-19 outbreak in China, many countries have approved emergency vaccines. Public-health practitioners and policymakers must understand the predicted populational willingness for vaccines and implement relevant stimulation measures. This study developed a framework for predicting vaccination uptake rate based on traditional clinical data-involving an autoregressive model with autoregressive integrated moving average (ARIMA)- and innovative web search queries-involving a linear regression with ordinary least squares/least absolute shrinkage and selection operator, and machine-learning with boost and random forest. For accuracy, we implemented a stacking regression for the clinical data and web search queries. The stacked regression of ARIMA (1,0,8) for clinical data and boost with support vector machine for web data formed the best model for forecasting vaccination speed in the US. The stacked regression provided a more accurate forecast. These results can help governments and policymakers predict vaccine demand and finance relevant programs.
    Date: 2021–09

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