nep-cna New Economics Papers
on China
Issue of 2022‒04‒25
twelve papers chosen by
Zheng Fang
Ohio State University

  1. China's changing role in global science and innovation By Kroll, Henning; Frietsch, Rainer
  2. The trade impact of the Covid-19 pandemic By Liu, Xuepeng; Ornelas, Emanuel; Shi, Huimin
  3. Modelling future trends of annual embodied energy of urban residential building stock in China By Zhou, W.; Moncaster, A.; O’Neill, E.; Reiner, D.; Wang, X.; Guthrie, P.
  4. Governance, foreign aid, and Chinese foreign direct investment By Fon, Roger; Alon, Ilan
  5. State capacity and leadership: Why did China take off? By Zhou, Haiwen
  6. Multilevel responses to risks, shocks and pandemics: lessons from the evolving Chinese governance model By Ahmad, Ehtisham
  7. Protect, constrain, contest: approaches for coordinated transatlantic economic and technological competition with China By Watkins, Peter; Chimits, François; Lenihan, Ashley Thomas; Paduano, Stephen; Vinci, Anthony; Liebenau, Jonathan
  8. Will Chinese Twenty-four Solar Terms Affect Stock Return: Evidence from Shanghai Index of China By Zhou Tianbao; Li Xinghao; Zhao Junguang
  9. Indirect Effects of Access to Finance By Jing Cai; Adam Szeidl
  10. Digital transition and green growth in Chinese agriculture By Jean-Philippe BOUSSEMART; Zhiyang SHEN; Songkai WANG; Yu HAO
  11. The art of trade war: spurring investments in Indonesia amidst the US–China trade war By Jong, Hilda Yanuar
  12. The French animal sectors in the face of the Covid-19 pandemic By Chatellier, Vincent; Cadudal, François; Chotteau, Philippe; Duflot, Boris; Heydemann, Pascale

  1. By: Kroll, Henning; Frietsch, Rainer
    Keywords: China,Global Science,Innovation
    Date: 2022
  2. By: Liu, Xuepeng; Ornelas, Emanuel; Shi, Huimin
    Abstract: Using a gravity-like approach, we study how Covid-19 deaths and lockdown policies affected countries' imports from China during 2020. We find that a country's own Covid-19 deaths and lockdowns significantly reduced its imports from China, suggesting that the negative demand effects prevailed over the negative supply effects of the pandemic. On the other hand, Covid-19 deaths in the main trading partners of a country (excluding China) induces more imports from China, partially offsetting countries' own effects. The net effect of moving from the pre-pandemic situation to another where the main variables are evaluated at their 2020 mean is, on average, a reduction of nearly 10% in imports from China. There is also significant heterogeneity. For example, the negative own effects of the pandemic vanish when we restrict the sample to medical goods and are significantly mitigated for products with a high "work-from-home" share or a high contract intensity for products exported under processing trade, and for capital goods. We also find that deaths and lockdowns in previous months tend to increase current imports from China, partially offsetting the contemporaneous trade loss, suggesting that trade is not simply "destroyed", but partially "postponed".
    Keywords: trade flows; Covid-19; lockdown; stringency; China; coronavirus
    JEL: F14
    Date: 2021–05–26
  3. By: Zhou, W.; Moncaster, A.; O’Neill, E.; Reiner, D.; Wang, X.; Guthrie, P.
    Abstract: China is the largest driver of growth in the global building sector. The longstanding construction boom across China has generated a massive flow of materials with significant associated embodied energy consumption and carbon emissions. Despite the serious implications for global emissions, there exist a very limited number of macro-level studies on embodied energy of Chinese buildings, with even fewer exploring future scenarios. There is therefore little in the way of an evidence base to offer policy makers. We develop a probabilistic model to forecast the possible trajectories of embodied energy of residential buildings over the medium to long term in the Chinese urban context. Our results provide clear evidence to substantiate the importance of embodied energy of new construction, which we find to be over 0.3 times the operational energy of existing stock between 2010 and 2018. If current trajectories are followed, embodied energy is likely to peak around 2027, with a 95% credible interval ranging from 87 to 283 Mtce (61 to 198 Mtoe) and a mean of 170 Mtce (119 Mtoe). We show that building lifetime has a substantial impact on future annual and cumulative embodied energy. Our findings reinforce the need to take a whole-life perspective to formulate policies addressing building energy as part of China's efforts to meet the announced overarching target of achieving carbon neutrality by 2060.
    Keywords: Urban residential buildings, embodied energy, dynamic stock turnover, probabilistic model, material intensity, policy implications
    JEL: O18 R21 Q4
    Date: 2022–03–31
  4. By: Fon, Roger; Alon, Ilan
    Abstract: This article examines how Chinese foreign aid interacts with the quality of the host country's governance in shaping Chinese state-owned enterprises' (CSOEs') foreign direct investment (FDI) in Africa. By analyzing the firm-level greenfield FDI data of CSOEs between 2003 and 2014 and distinguishing between China's official development assistance and less concessional forms of Chinese foreign aid, we reveal two main findings. First, the quality of the host country's governance negatively affects CSOEs' FDI. Second, other official aid and loans from China negatively moderate the relationship between the quality of the host country's governance and FDI by CSOEs. Specifically, the tendency for CSOEs to invest in locations with weak governance increases when their investments are integrated with less concessional forms of Chinese foreign aid in the form of other official flows and loans. Our results are robust to alternative measures of the governance and different methodological approaches. The article challenges the traditional notion of institutional theory which assumes a positive relationship between governance quality and FDI attraction.
    Keywords: foreign aid; foreign direct investment; governance; international political economy; state-owned enterprises; Wiley deal
    JEL: F3 G3
    Date: 2022–03–01
  5. By: Zhou, Haiwen
    Abstract: For a large economy trying to achieve industrialization, it needs to develop indigenous technological capacities to make growth sustainable. Industrialization can be challenging to achieve because it might be difficult to develop technologies without changing culture and political institutions which are useful to maintain ruling. Rulers in ancient China choose institutions to prevent internal rebellions. Industrialization was a new goal for the Qing government in the 19th century, and previous institutions were not designed to handle this issue. China’s high growth rates after 1978 resulted from internal reforms to increase efficiency and external openness to absorb foreign capital, knowledge, and technologies. China’s state capacity and leadership supported developing technological capacities in the catch-up process.
    Keywords: China, economic development, technological capacity, political economy, state capacity
    JEL: N95 O14 O53
    Date: 2022–03–01
  6. By: Ahmad, Ehtisham
    Abstract: The Covid-19 pandemic has exposed strengths and weaknesses of different governing models around the world. In all cases, national coordination and financing is needed together with local information generation, early warning, as well as using big data to identify problem clusters, track, trace and quarantine potentially infectious people. Also, primary health care at the local level has to be the basis for actions, as well as local support for affected households. In China, delays in information generation and local actions were compensated by prompt central response, coordination and management of the pandemic. This points to the need to further strengthen the Chinese Governance Model. In many other countries, a lack of coordinated federal or national actions and financing, and weak coordination with subnational administrations has led to catastrophic outcomes. The national coordination actions need to be replicated with stronger international coordination. The need for reforms also is relevant for achieving sustainable growth in the future at both national and global levels, including also risks from climate change.
    Keywords: coronavirus; Covid-19
    JEL: H10 H70 I10
    Date: 2020–09–14
  7. By: Watkins, Peter; Chimits, François; Lenihan, Ashley Thomas; Paduano, Stephen; Vinci, Anthony; Liebenau, Jonathan
    Abstract: The Biden Presidency offers opportunities for a renewed effort at formulating a coordinated allied approach to technological and economic competition with China. The latest report from China Foresight at LSE IDEAS provides a guiding framework for transatlantic coordination, and offers insights into key elements of future cooperation. While challenges abound, the opportunities for action prove just as great in number.
    JEL: R14 J01 N0
    Date: 2021–01–27
  8. By: Zhou Tianbao; Li Xinghao; Zhao Junguang
    Abstract: In this article, readers will see the impact on Chinese stock index brought by twenty-four solar terms, a unique division of annual season in Chinese tradition. Based on the data in the past 26 years, the study focused on whether the daily return (revenue) of Shanghai Index shows significant value and special feature on and after each solar term.On several solar terms did the index return result large mean value and high probability of extreme value occurrence such as on solar term No.1 and No.3 while on solar term No.2 and solar term No.4, the results were completely the opposite.The study also found that the volatility of index return during those solar terms in the beginning of the year were more active than the rest of them. Index return 10 days and 15days after solar term No.6 and solar term No.8 displayed high final return and large volatility whereas in any cases, the index went very steady after solar term No.18.The study also proposed that it is almost impossible to make numeric prediction with the current technical analysis tools, the effective way in stock analysis to collect more feature and characteristics based on historical data, identifying if the similar situation is happening when similar feature of stock shows up in the future.
    Date: 2022–03
  9. By: Jing Cai; Adam Szeidl
    Abstract: We created experimental variation across local markets in China in the share of firms having access to a new loan product, to measure the direct and indirect effects of access to finance. We find that: (1) Access to finance had a large positive direct effect on the performance of treated firms. (2) Access to finance had a similar-sized negative indirect effect on the performance of firms with treated competitors. The two effects offset in the aggregate and imply no detectable gains in producer surplus. (3) Access to finance had a positive direct effect on business practices, service quality, and consumer satisfaction, and a negative effect on price. None of these effects were offset by indirect effects, suggesting net gains in consumer surplus. (4) Two additional indirect effects were active: diffusion of borrowing to firms with treated peers, and diffusion of demand to firms with treated neighbors. (5) Combining several effects in a model-based evaluation, we estimate that the loan had a private return of 74%, most of which was offset by losses to competitors, and a social return of 60%, most of which was driven by gains to consumers.
    JEL: G00 G21 L00 O1
    Date: 2022–03
  10. By: Jean-Philippe BOUSSEMART (Univ. Lille, CNRS, IESEG School of Management, UMR 9221 - LEM - Lille Économie Management, F-59000 Lille, France); Zhiyang SHEN (School of Management and Economics, Beijing Institute of Technology, 100081 Beijing, China); Songkai WANG (School of Management and Economics, Beijing Institute of Technology, 100081 Beijing, China); Yu HAO (School of Management and Economics, Beijing Institute of Technology, 100081 Beijing, China)
    Abstract: As the primary industry in an economy, sustainable agricultural growth has attracted much attention from researchers and policy-makers worldwide. Digitalization reform and information technology greatly impact agriculture, rural areas, and farmers, improving high-quality development and green growth in the agricultural sector. Based on a measure of digitalization and a green productivity indicator, this paper investigates the impact of internet development on the economic and environmental performance of Chinese agriculture. Based on a measurement of digitalization and a green productivity indicator, this paper investigates the environmental performance and its relationship with internet development in the Chinese agricultural sector. The empirical results suggest that substantial green growth is observed in Chinese provincial agriculture, which is largely motived by technological progress. Internet popularization and digital technology indeed promote sustainable development in agriculture. Furthermore, the corresponding policy implications are provided to create a new path for steady growth in Chinese agriculture.
    Keywords: : Green growth; Internet development; Digitalization; Agricultural productivity
    JEL: O13 O47 P28
    Date: 2022–04
  11. By: Jong, Hilda Yanuar
    Abstract: The US–China trade war creates significant opportunities for developing countries, as global manufacturers need to relocate their production facilities out of China to avoid future tariff hikes. However, Indonesia as the biggest economy in the ASEAN is not experiencing any substantial advantage relative to its neighbors, especially compared to Vietnam. While there is no clarity on how long the trade war will last, it is important for Indonesia to strategize quickly to capitalize the opportunities. This article addresses the question of how Indonesia should strategize through country comparison and analysis of two types of policy competition, namely, incentives-based (IBC) and rules-based competition (RBC). In the short-term, Indonesia should be more accommodating for investors of all sizes and maximize the trade-related investment assistance. In the longer term, Indonesia should prudently open up to trade, improve cooperation between investment and trade functions, and build a positive public mindset for free trade.
    Keywords: FDI; free trade; Southeast Asia; strategy; trade war
    JEL: L81
    Date: 2021–08–26
  12. By: Chatellier, Vincent; Cadudal, François; Chotteau, Philippe; Duflot, Boris; Heydemann, Pascale
    Abstract: This article presents an analysis of the economic situation of several animal sectors (cow's milk, beef, pork, poultry and horses) in France, two years after the start of the Covid-19 pandemic. Using the latest statistical data available for the period 2020 to 2021 and taking into account the historical trajectories followed, it seeks to highlight how this health crisis has had implications for production, prices, consumption, foreign trade and, in the case of the equine sector, various activities (horse betting, attendance at riding schools, etc.). The production of agricultural goods was generally little affected by the health crisis, as farmers continued to produce, sometimes despite certain difficulties (lack of manpower, temporary loss of outlets, etc.). Faced with a significant change in the structure of demand (increase in products purchased by households to the detriment of those favored in out-of-home catering), sudden measures imposed by the State and the difficulties sometimes encountered in maintaining the number of employees, processing actors were able to adapt quickly to enable them to supply consumers with the goods they demanded. Trade flows were also disrupted in 2020, before picking up again in 2021, following trends that are ultimately quite consistent with those seen before the crisis. Under the influence, on the one hand, of higher energy prices (even before the war in Ukraine which started on February 24, 2022) and, on the other hand, of fluctuating imports from China on the world markets, producer prices increased at the end of 2021 (with the exception of the pig sector), but this increase is counterbalanced by an increase in production costs. In the equine sector, turnover losses have been temporarily significant due to the strong interaction of this sector with the public. After the shock of 2020, and thanks to a strong adaptation of the actors, the activities are gradually resuming.
    Keywords: Consumer/Household Economics, Livestock Production/Industries
    Date: 2022–04–14

This nep-cna issue is ©2022 by Zheng Fang. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.