nep-cna New Economics Papers
on China
Issue of 2022‒05‒09
27 papers chosen by
Zheng Fang
Ohio State University

  1. Housing Conditions and Health in Urban China By Ding, Lanlin; Nie, Peng; Sousa-Poza, Alfonso
  2. Do the Media Bow to Foreign Economic Powers? Evidence from a News Website Crackdown By Heng Chen; Li Han
  3. China's Labor Market Demand in the Shadow of COVID-19: Evidence from an Online Job Board By Zeng, Xiangquan; Chu, Shuai; Chen, Xuan
  4. Import Liberalization as Export Destruction? Evidence from the United States By Holger Breinlich; Elsa Leromain; Dennis Novy; Thomas Sampson
  5. China's Labor Market Demand in the Shadow of COVID-19: Evidence from an Online Job Board By Zeng, Xiangquan; Chu, Shuai; Chen, Xuan
  6. When Opportunity Knocks: China's Open Door Policy and Declining Educational Attainment By Jiang, Xuan; Kennedy, Kendall; Zhong, Jiatong
  7. China's real estate sector and the impacts of its possible disorder on Chinese economy and the euro area By Kaaresvirta, Juuso; Kerola, Eeva; Nuutilainen, Riikka
  8. Rural Pension System and Farmers' Participation in Residents' Social Insurance By Tao Xu
  9. Technology Transfer and Early Industrial Development: Evidence from the Sino-Soviet Alliance By Michela Giorcelli; Bo Li
  10. Skill Formation, Employment Discrimination, and Wage Inequality: Evidence from the People’s Republic of China By Wang, Jun; Liao, Chengjuan; Wan, Xuan; Song, Hui
  11. Higher Education Expansion and Crime: New Evidence from China By Liu, Xingfei; Wang, Chuhong; Yan, Zizhong; Zhao, Yi
  12. How Does Matching Uncertainty Affect Marital Surplus? Theory and Evidence from China By Li Han; Xinzheng Shi; Ming-ang Zhang
  13. Fewer, better pathways for all? Intersectional impacts of rural school consolidation in China's minority regions By Emily Hannum; Fan Wang
  14. State capital involvement, managerial sentiment and firm innovation performance Evidence from China By Xiangtai Zuo
  15. When the United States and the People’s Republic of China Sneeze: International Real and Financial Spillovers in Asia By Beirne, John; Renzhi, Nuobu; Volz, Ulrich
  16. How Resilient Was Trade to Covid-19? By Maria Bas; Ana Margarida Fernandes; Caroline Paunov
  17. How important are Russia's external economic links? By Korhonen, Iikka; Simola, Heli
  18. Same environment, stratified impacts? Air pollution, extreme temperatures, and birth weight in south China By Xiaoying Liu; Jere R. Behrman; Emily Hannum; Fan Wang; Qingguo Zhao
  19. Big techs, QR code payments and financial inclusion By Thorsten Beck; Leonardo Gambacorta; Yiping Huang; Zhenhua Li; Han Qiu
  20. Estimating the Effects of Educational System Consolidation: The Case of China's Rural School Closure Initiative By Emily Hannum; Xiaoying Liu; Fan Wang
  21. Export Capacity Constraints and Distortions By Xiao Feng; Yongjin Wang; Laixun Zhao
  22. Public Expenditures Under The 2011-2020 Poverty Reduction Strategy In China By Samuel Freije; Fuchang Zhao
  23. Infrastructure and sectoral FDI in China: an empirical analysis By Faisal Mehmood; Muhammad Atique; Wang Bing; Hameed Khan; Henna Henna
  24. Government Policy, Industrial Clusters, and the Blue Economy in the People’s Republic of China: A Case Study on the Shandong Peninsula Blue Economic Zone By Xie, Zhihai
  25. Stability of China's Stock Market: Measure and Forecast by Ricci Curvature on Network By Xinyu Wang; Liang Zhao; Ning Zhang; Liu Feng; Haibo Lin
  26. Best and Brightest? The Impact of Student Visa Restrictiveness on Who Attends College in the US By Chen, Mingyu; Howell, Jessica; Smith, Jonathan
  27. Cutting through the Value Chain: The Long-Run Effects of Decoupling the East from the West By Gabriel J. Felbermayr; Hendrik Mahlkow; Alexander Sandkamp

  1. By: Ding, Lanlin (Xi’an Jiaotong University); Nie, Peng (Xi’an Jiaotong University); Sousa-Poza, Alfonso (University of Hohenheim)
    Abstract: Using longitudinal data from the China Health and Nutrition Survey, we investigate the causal relation between housing conditions (both internal and external) and health among urban adults aged 18+. We find that housing improvement reduces the probability of bad self-reported health by 3.7 percent, with more pronounced impacts among females, older adults, those with lower socioeconomic status (low education and income) and residents of the less developed central and western regions. This beneficial health effect is enhanced by longer treatment periods and consistent across several robustness checks. Housing conditions seemingly operate on health via poor macronutrient intake, physical inactivity, and sleep deprivation.
    Keywords: housing conditions, health, difference-in-differences, urban China
    JEL: D63 I10 I12 R21
    Date: 2022–03
  2. By: Heng Chen (The Faculty of Business and Economics, The University of Hong Kong); Li Han
    Abstract: By exploiting a large-scale media crackdown in May 2019 in China, in which multiple influential UK- and US-based news sites were blocked, we find that media outlets, after being blocked, published more politically sensitive news on China and adopted a more negative tone in those coverages, compared to those with no access change. However, reporting on non-sensitive economic topics remained unaffected. Further evidence suggests that these findings are aligned with the interpretation that news media compromise their reporting to maintain access to China, but not with the conjecture that they retaliated against China or responded to the changed readership.
    Keywords: Self-censorship, Access, Crackdown, Word Embedding, Topic Modeling, Computational Linguistics
    JEL: L82 L88 F69 P00
    Date: 2022–02
  3. By: Zeng, Xiangquan (Renmin University of China); Chu, Shuai (Renmin University of China); Chen, Xuan (Renmin University of China)
    Abstract: Using data of the largest online job board in China,, we examine the impacts of the lockdown policy on the Chinese labor market demand during the coronavirus disease (COVID-19) pandemic. The analyses reveal that the lockdown policy, which was implemented in Wuhan on January 23, 2020, reduced the labor market demand drastically. Specifically, the "Number of Companies" that posted weekly job vacancies, "Number of Positions," and "Number of Employees" to be recruited reduced rapidly by 18.5%, 21.9%, and 30.0%, respectively. Furthermore, this impact of the lockdown policy began to reduce, thus allowing the labor demand to rebound four weeks after the outbreak. The heterogeneity analyses reveal that the industries with high physical proximity and those manufacturing non-essential products/services, as well as small-size firms, were greatly impacted by the policy. No statistical difference was observed between the impacts on the cities that implemented specific control measures and those that did not. This study quantifies the dynamic impacts of China's stringent control measures on the country's labor demand during the pandemic. These findings indicate that the effective management of public health crises in conjunction with economic policies is critical to revitalizing labor markets.
    Keywords: COVID-19, lockdown, job vacancy, online job board, labor demand
    JEL: J23 J23 J63 I18
    Date: 2022–03
  4. By: Holger Breinlich; Elsa Leromain; Dennis Novy; Thomas Sampson
    Abstract: How does import protection affect export performance? In trade models with scale economies, import liberalization can reduce industry-level exports by cutting domestic production. We show that this export destruction mechanism reduced US export growth following the permanent normalization of trade relations with China (PNTR). But there was also an offsetting boost to exports from lower input costs. We use our empirical results to calibrate the strength of scale economies in a quantitative trade model. Counterfactual analysis implies that while PNTR increased aggregate US exports relative to GDP, exports declined in the most exposed industries because of the export destruction effect. On aggregate, the US and China both gain from PNTR, but the gains are larger for China.
    Keywords: trade policy, import liberalization, comparative advantage, scale economies, China shock
    JEL: F12 F13 F15
    Date: 2022
  5. By: Zeng, Xiangquan; Chu, Shuai; Chen, Xuan
    Abstract: Using data of the largest online job board in China,, we examine the impacts of the lockdown policy on the Chinese labor market demand during the coronavirus disease (COVID-19) pandemic. The analyses reveal that the lockdown policy, which was implemented in Wuhan on January 23, 2020, reduced the labor market demand drastically. Specifically, the "Number of Companies" that posted weekly job vacancies, "Number of Positions," and "Number of Employees" to be recruited reduced rapidly by 18.5%, 21.9%, and 30.0%, respectively. Furthermore, this impact of the lockdown policy began to reduce, thus allowing the labor demand to rebound four weeks after the outbreak. The heterogeneity analyses reveal that the industries with high physical proximity and those manufacturing non-essential products/services, as well as small-size firms, were greatly impacted by the policy. No statistical difference was observed between the impacts on the cities that implemented specific control measures and those that did not. This study quantifies the dynamic impacts of China's stringent control measures on the country's labor demand during the pandemic. These findings indicate that the effective management of public health crises in conjunction with economic policies is critical to revitalizing labor markets.
    Keywords: COVID-19,lockdown,job vacancy,online job board,labor demand
    JEL: I18 H51 J23
    Date: 2022
  6. By: Jiang, Xuan (Ohio State University); Kennedy, Kendall (Mississippi State University); Zhong, Jiatong (University of Alberta, Department of Economics)
    Abstract: In 1978, China opened its door to the outside world. This study investigates how the Open Door Policy affected the educational choices of workers born 1960-1970. Using measures of local labor markets' export exposure, we find the Open Door Policy decreased educational attainment; youths born from 1965-70 facing the mean export exposure were 5.6-13.3 p.p. less likely to complete high school than those born in 1960. Our findings suggest a complicated relationship between Chinese human capital accumulation and economic growth during the industrialization of the 1980s and 1990s, as the Open Door Policy reduced skilled labor in the most export-exposed regions.
    Keywords: Open Door Policy; educational attainment; high school completion
    JEL: F16 I20 J20 O15
    Date: 2022–03–24
  7. By: Kaaresvirta, Juuso; Kerola, Eeva; Nuutilainen, Riikka
    Abstract: China's real estate and construction sector has served as a major engine of economic growth in recent decades and the sector now plays an oversized role in the economy. Much of that growth has been debt-fuelled, with the indebtedness of developers climbing to unprecedented levels. After officials turned off the money spigot last year, housing markets cooled and a wave of financial difficulties washed over builders during autumn 2021. The entire sector found itself under heavy stress, and in December two major developers, Evergrande and Kaisa, defaulted on their offshore debt. In this brief, we consider the current conditions in China's real estate and construction sector and how a possible sectoral crisis could spread to the national economy and the euro area. While the direct financial impacts on the euro area's financial sector is likely to be minor, China's real estate sector problems could spill over widely into the domestic real economy and thereby increase uncertainty internationally. In such case, the indirect impacts on the euro area could be severe.
    Keywords: China,risks,real estate sector,construction,economy,economic growth
    Date: 2021
  8. By: Tao Xu
    Abstract: As the ageing population and childlessness are increasing in rural China, social pensions will become the mainstream choice for farmers, and the level of social pensions must be supported by better social insurance. The paper compares the history of rural pension insurance system, outlines the current situation and problems, analyses China Family Panel Studies data and explores the key factors influencing farmers' participation through an empirical approach. The paper shows that residents' social pension insurance is facing problems in the rural areas such as low level of protection and weak management capacity, which have contributed to the under-insured rate, and finds that there is a significant impact on farmers' participation in insurance from personal characteristics factors such as gender, age, health and (family) financial factors such as savings, personal income, intergenerational mobility of funds. And use of the Internet can help farmers enroll in pension insurance. The paper argues for the need to continue to implement the rural revitalisation strategy, with the government as the lead and the market as the support, in a concerted effort to improve the protection and popularity of rural pension insurance.
    Date: 2022–04
  9. By: Michela Giorcelli; Bo Li
    Abstract: This paper studies the causal effect of technology and knowledge transfers on early industrial development. Between 1950 and 1957, the Soviet Union supported the “156 Projects” in China for building technologically advanced industrial facilities. We exploit idiosyncratic delays in project completion and the unexpected end of the Sino-Soviet Alliance, and show that receiving both Soviet technology and know-how had large, persistent effects on plant performance, while the effects of receiving only Soviet capital goods were short-lived. The intervention generated horizontal and vertical spillovers, and production reallocation from state-owned to privately owned companies since the late 1990s.
    Keywords: industrialization, technology transfer, knowledge diffusion, China
    JEL: L20 M20 N34 N64 O32 O33
    Date: 2022
  10. By: Wang, Jun (Asian Development Bank Institute); Liao, Chengjuan (Asian Development Bank Institute); Wan, Xuan (Asian Development Bank Institute); Song, Hui (Asian Development Bank Institute)
    Abstract: We study the impact of skill formation on employment opportunities and wages. Instead of international trade theory or technological progress theory, we focus on labor “skill formation” to investigate the employment discrimination and skill wage inequality in the PRC's labor market. Based on data from the 2014 China Family Panel Studies, we use cognitive ability and noncognitive ability to measure skill formation. The empirical results show that skill formation has a positive impact on employment opportunities and wages. This result exhibits robustness in tests on monopoly industries and non-monopoly industries, except that there is a certain tendency toward wage equalization in monopoly industries. We also find employment discrimination resulting from skill differences in state-owned and non-state-owned sectors. A similar trend of wage equalization exists in state-owned sectors, while a significant trend of wage differentiation exists between high and low skills in non-state-owned sectors.
    Keywords: skill formation; employment discrimination; skill wage inequality
    JEL: J21 J24 J71
    Date: 2021–08
  11. By: Liu, Xingfei (University of Alberta, Department of Economics); Wang, Chuhong (Yango University); Yan, Zizhong (Jinan University); Zhao, Yi (Tsinghua University)
    Abstract: In this paper we present causal evidence on the impact of higher education expansion on crime by exploiting a massive expansion of college enrollment in China since 1999, using data from multiple sources. Our identification strategy exploits regional variation in the intensity of the higher education expansion with partially identified difference-in-differences models. We explore various assumptions to account for the potential unparallel trends over years and find that college expansion causally reduces crime rates and the effect changes over time. Moreover, the crime reducing effect extends beyond the post-secondary educational level and into the senior high schools. Our findings document an important yet overlooked positive externality associated with higher education expansion.
    Keywords: Higher education expansion; Crime; China; Partial identification
    JEL: I20 K42
    Date: 2022–03–24
  12. By: Li Han (Division of Social Science, The Hong Kong University of Science and Technology); Xinzheng Shi (Tsinghua University); Ming-ang Zhang (Central University of Finance and Economics)
    Abstract: Information quality affects matching and marital outcomes. We show in a simple two-dimensional matching model that a noisier cue for one trait leads to a shift in sorting tradeoff toward the other, lowers average welfare but the impact is asymmetric. To test the predictions, we explore the repeal of mandatory premarital health examinations in China. The repeal, increasing health cue noise, is found to have reduced postmarital subjective well-being mainly through a reduction in child health associated with decreased sorting by health. The deterioration was particularly strong for women and the poor, suggesting entrenched inequality by gender and wealth.
    Keywords: Premarital Health Examination, Subjective Well-being, Assortative Matching, Sorting Tradeoff, Inequality
    JEL: J12 J13 I18
    Date: 2022–03
  13. By: Emily Hannum; Fan Wang
    Abstract: Primary school consolidation--the closure of small community schools or their mergers into larger, better-resourced schools--is emerging as a significant policy response to changing demographics in middle income countries with large rural populations. In China, large-scale consolidation took place in the early 21st century. Because officially-recognized minority populations disproportionately reside in rural and remote areas, minority students were among those at elevated risk of experiencing school consolidation. We analyze heterogeneous effects of consolidation on educational attainment and reported national language ability in China by exploiting variations in closure timing across villages and cohorts captured in a 2011 survey of provinces and autonomous regions with substantial minority populations. We consider heterogeneous treatment effects across groups defined at the intersections of minority status, gender, and community ethnic composition and socioeconomic status. Compared to villages with schools, villages whose schools had closed reported that the schools students now attended were better resourced, less likely to offer minority language of instruction, more likely to have Han teachers, farther away, and more likely to require boarding. Much more than Han youth, ethnic minority youth were negatively affected by closure, in terms of its impact on both educational attainment and written Mandarin facility. However, significant penalties accruing to minority youth occurred only in the poorest villages. Penalties were generally heavier for girls, but in the most ethnically segregated minority villages, boys from minority families were highly vulnerable to closure effects on attainment and written Mandarin facility. Results show that intersections of minority status, gender, and community characteristics can delineate significant heterogeneities in policy impacts.
    Date: 2022–04
  14. By: Xiangtai Zuo (Shutter Zor)
    Abstract: In recent years, more and more state-owned enterprises (SOEs) have been embedded in the restructuring and governance of private enterprises through equity participation, providing a more advantageous environment for private enterprises in financing and innovation. However, there is a lack of knowledge about the underlying mechanisms of SOE intervention on corporate innovation performance. Hence, in this study, we investigated the association of state capital intervention with innovation performance, meanwhile further investigated the potential mediating and moderating role of managerial sentiment and financing constraints, respectively, using all listed non-ST firms from 2010 to 2020 as the sample. The results revealed two main findings: 1) state capital intervention would increase innovation performance through managerial sentiment; 2) financing constraints would moderate the effect of state capital intervention on firms' innovation performance.
    Date: 2022–04
  15. By: Beirne, John (Asian Development Bank Institute); Renzhi, Nuobu (Asian Development Bank Institute); Volz, Ulrich (Asian Development Bank Institute)
    Abstract: We examine real and financial spillovers from monetary policy shocks originating in the United States (US) and the People’s Republic of China (PRC) to advanced and emerging economies in Asia over the period 2000 to 2020. Using a structural panel vector autoregression approach, we find that Asian economies overall are more susceptible to spillovers to GDP, inflation, and the current account emanating from monetary policy shocks in the PRC than to those from the US. This is related to high inter-regional trade integration in Asia and is in line with previous research findings. However, while the prevailing literature has highlighted the dominant role of US monetary policy as a transmitter of shocks to global and Asian financial markets, we find more persistence in the response of advanced Asian interest rates to PRC monetary policy shocks. In addition, emerging Asian economies are found to be more susceptible to shocks emanating from the PRC in respect of equity markets and exchange rates. The rising synchronization of Asian financial markets in relation to the PRC as the financial account in the PRC has gradually opened as well as indirect effects via trade and regional value chains help to rationalize our findings.
    Keywords: monetary policy; global financial cycle; international spillovers; US; People’s Republic of China
    JEL: E44 E52 F33 F42
    Date: 2021–11
  16. By: Maria Bas; Ana Margarida Fernandes; Caroline Paunov
    Abstract: We examine the supply-side characteristics - unskilled labor, imported input intensity, dependence on inputs from China, production complexity - that determine different potential vulnerabilities of traded products to the COVID-19 pandemic. Relying on monthly exports at the product level by all countries to the United States, Japan, and all 27 European Union countries from January 2018 to December 2020, we estimate a difference-in-differences specification of the COVID-19 incidence (deaths per capita) mediated by product vulnerabilities. We account for the precise lag between when the COVID-19 shock hit the exporting country and when exports reach their destination country relying on the products’ type of transportation and distance between exporter and importer countries. Higher reliance on foreign inputs, on China as input supplier, on unskilled labor and a lower degree of complexity negatively affected exports as a result of this shock.
    Keywords: exports, vulnerability, resilience, Covid-19, shock, high-frequency data
    JEL: F14 F61 D20
    Date: 2022
  17. By: Korhonen, Iikka; Simola, Heli
    Abstract: In this note, we review recent data concerning Russia's economic integration with other countries. We first analyze the general picture of Russia's economic integration with the rest of the world and the importance of foreign economic relations for the country. We then turn to China, an increasingly significant economic partner for Russia. The European Union remains Russia's most important trading partner and is by far the most important source of foreign direct investment to Russia as well as sources of other financing. China's importance to Russia has also increased, especially with respect to merchandise trade.
    Keywords: Russia,economic integration,trade,investment
    Date: 2022
  18. By: Xiaoying Liu; Jere R. Behrman; Emily Hannum; Fan Wang; Qingguo Zhao
    Abstract: This paper investigates whether associations between birth weight and prenatal ambient environmental conditions--pollution and extreme temperatures--differ by 1) maternal education; 2) children's innate health; and 3) interactions between these two. We link birth records from Guangzhou, China, during a period of high pollution, to ambient air pollution (PM10 and a composite measure) and extreme temperature data. We first use mean regressions to test whether, overall, maternal education is an "effect modifier" in the relationships between ambient air pollution, extreme temperature, and birth weight. We then use conditional quantile regressions to test for effect heterogeneity according to the unobserved innate vulnerability of babies after conditioning on other confounders. Results show that 1) the negative association between ambient exposures and birth weight is twice as large at lower conditional quantiles of birth weights as at the median; 2) the protection associated with college-educated mothers with respect to pollution and extreme heat is heterogeneous and potentially substantial: between 0.02 and 0.34 standard deviations of birth weights, depending on the conditional quantiles; 3) this protection is amplified under more extreme ambient conditions and for infants with greater unobserved innate vulnerabilities.
    Date: 2022–04
  19. By: Thorsten Beck; Leonardo Gambacorta; Yiping Huang; Zhenhua Li; Han Qiu
    Abstract: Using a unique dataset of around half a million Chinese firms that use a QR code-based mobile payment system, we find that (i) the creation of a digital payment footprint allows firms to access credit provided by the same big tech company; (ii) transaction data generated via QR code generate spillover effects on access to bank credit; and (iii) there are positive effects of access to big tech credit on sales, including during the Covid-19 shock. The findings suggest that access to innovative payment methods helps micro firms build up credit history, and that using big tech credit can ease access to bank credit.
    Keywords: big tech, big data, QR code, banks, asymmetric information, financial inclusion, credit markets.
    JEL: D22 G31 R30
    Date: 2022–05
  20. By: Emily Hannum; Xiaoying Liu; Fan Wang
    Abstract: Global trends of fertility decline, population aging, and rural outmigration are creating pressures to consolidate school systems, with the rationale that economies of scale will enable higher quality education to be delivered in an efficient manner, despite longer travel distances for students. Yet, few studies have considered the implications of system consolidation for educational access and inequality, outside of the context of developed countries. We estimate the impact of educational infrastructure consolidation on educational attainment using the case of China's rural primary school closure policies in the early 2000s. We use data from a large household survey covering 728 villages in 7 provinces, and exploit variation in villages' year of school closure and children's ages at closure to identify the causal impact of school closure. For girls exposed to closure during their primary school ages, we find an average decrease of 0.60 years of schooling by 2011, when children's mean age was 17 years old. Negative effects strengthen with time since closure. For boys, there is no corresponding significant effect. Different effects by gender may be related to greater sensitivity of girls' enrollment to distance and greater responsiveness of boys' enrollment to quality.
    Date: 2022–03
  21. By: Xiao Feng (School of Economics, Nankai University, CHINA); Yongjin Wang (School of Economics, Nankai University, CHINA); Laixun Zhao (Research Institute for Economics & Business Administration (RIEB), Kobe University, JAPAN)
    Abstract: We investigate how export capacity constraints (ECCs) affect resource misallocation and aggregate productivity by distorting the firm’s export mode. Using unique datasets in China, we first document a number of observed patterns for the socalled “dual-channel exporters”, which export only a fraction of their products directly with the rest via intermediaries. We show that introducing capacity constraints reconciles the theory with the observed patterns in the data. Our quantitative exercise suggests that removal of the ECCs leads to gains of 2.27% in aggregate productivity, 4.97% in total exports and 0.37% in national welfare.
    Keywords: Dual-channel exporters; Capacity constraint; Distortion; Resource misallocation
    JEL: F10 O18
    Date: 2022–04
  22. By: Samuel Freije; Fuchang Zhao
    Abstract: The official poverty reduction strategy defined by the “Outline for Development Oriented Poverty Reduction for China’s Rural Areas (2011-2020)”, has a two-pronged approach. On the one hand, economic development that creates employment opportunities for the poor. On the other hand, expansion of the social protection system to protect the vulnerable. This study describes public expenditures on poverty reduction using available official data for the period 2011-2020. It lists the main programs, evolution of public expenditures, how these expenditures are distributed across provinces, how they compare to other countries in the World and what has been their effect on poverty reduction in China. The study shows that resources allocated to anti-poverty development programs, and to social insurance, have more than doubled under the period of study but expenditures in social assistance, however, have seen a decline since the middle of the decade. This is the consequence of a growing percentage of the population being covered by social insurance and a declining number of beneficiaries of social assistance programs. Despite this rapid increase, expenditures in social assistance and social insurance remain at average levels, when compared in international perspective. There is also some evidence that the country has advanced in terms of coverage but the sufficiency (i.e., the average amount of benefits in relation to standards of living) can still improve significantly. Finally, the study also finds evidence that anti-poverty development programs have a small impact on poverty reduction, but not statistically significant in our sample. On the other hand, productivity growth in agriculture remains the most important driver of poverty reduction although this impact seems less robust than in the past.
    Keywords: China, Poverty, Welfare Programs
    JEL: I38 O53 P36
    Date: 2022–04
  23. By: Faisal Mehmood (HUST - Huazhong University of Science and Technology [Wuhan]); Muhammad Atique (HUST - Huazhong University of Science and Technology [Wuhan]); Wang Bing (HUST - Huazhong University of Science and Technology [Wuhan]); Hameed Khan (KUST - Kohat University of Science and Technology); Henna Henna (KUST - Kohat University of Science and Technology)
    Abstract: In this paper, for the first time, we investigate the relationship between infrastructure and sectoral distribution of FDI inflow in China. We use the Estimating Autoregressive Distributed Lag (ARDL) bound testing and Vector Error Correction Model (VECM) procedures of estimation. To unmask the shortcomings in the previous literature, we use a composite index of infrastructure with more than 30 indicators. The results show that there is a long-run relationship between sectoral FDI and infrastructure. A bidirectional causal relationship is confirmed by using VECM. However, we find unidirectional causality between the primary sector's FDI and infrastructure, and it is running from infrastructure to primary sector FDI. The inclusion of control variables, e.g., institutional quality, trade openness, and domestic investment, is robust in our analysis. The positive role of infrastructure in the sectoral distribution of FDI inflows is of utmost importance for policymakers and Chinese-government. Several policy implications are given in our study.
    Keywords: Infrastructure,foreign direct investment,Estimating Autoregressive Distributed Lag (ARDL)
    Date: 2021–06–30
  24. By: Xie, Zhihai (Asian Development Bank Institute)
    Abstract: The blue economy or marine economy has become increasingly important for countries not only to generate a new source of growth but also to construct the coexistence between humans and the environment. The People’s Republic of China (PRC) has attached great importance to the blue economy since the beginning of the 21st century. During the past 2 decades, the PRC’s blue economy has undergone considerable development. Its share in the GDP has increased substantially and remains large. The blue economy has become a national strategy, though traditionally the PRC has not relied heavily on marine resources. The PRC’s approach to the blue economy has also experienced transformative change during the last decade. In the policy directive and at the practice level, ecological sustainability and marine environmental protection have already become an important part of the blue economy in the PRC. We argue that government policy and industrial clusters are the two most important factors that contribute to the development of the PRC’s blue economy, as the case study of the Shandong Peninsula Blue Economic Zone (SP-BEZ) demonstrates. First, government policy is the basis for the establishment and development of the SP-BEZ. The PRC’s government has provided policy guidance and assistance for the development of the blue economy. Both central and municipal governments have sponsored the SP-BEZ project, providing considerable financial and technological support. With the government’s encouragement, blue finance has developed due to the public–private partnerships in the blue economy. Second, industrial clusters are both the means and the end for the SP-BEZ. To promote the development of the blue economy in the SP-BEZ, the government has made full use of Shandong Peninsula’s industrial advantages to redistribute and restructure the industries in the region. The SP-BEZ has formed industrial clusters with the support of its advantageous scientific and technological research and development in the blue economy. These industrial clusters have not only integrated a wide range of different industries but also helped to promote the domestic regional economic integration in the Shandong Peninsula.
    Keywords: blue economy; marine economy; blue economic zone; government policy; industrial cluster; People’s Republic of China
    JEL: G38 O11 O13 O47 Q28 Q57
    Date: 2021–12
  25. By: Xinyu Wang; Liang Zhao; Ning Zhang; Liu Feng; Haibo Lin
    Abstract: The systemic stability of a stock market is one of the core issues in the financial field. The market can be regarded as a complex network whose nodes are stocks connected by edges that signify their correlation strength. Since the market is a strongly nonlinear system, it is difficult to measure the macroscopic stability and depict market fluctuations in time. In this paper, we use a geometric measure derived from discrete Ricci curvature to capture the higher-order nonlinear architecture of financial networks. In order to confirm the effectiveness of our method, we use it to analyze the CSI 300 constituents of China's stock market from 2005--2020 and the systemic stability of the market is quantified through the network's Ricci type curvatures. Furthermore, we use a hybrid model to analyze the curvature time series and predict the future trends of the market accurately. As far as we know, this is the first paper to apply Ricci curvature to forecast the systemic stability of domestic stock market, and our results show that Ricci curvature has good explanatory power for the market stability and can be a good indicator to judge the future risk and volatility of the domestic market.
    Date: 2022–04
  26. By: Chen, Mingyu (Amazon); Howell, Jessica; Smith, Jonathan (Georgia State University)
    Abstract: Recent immigration policies have created massive uncertainty for international students to obtain F-1 visas. Yet, before the COVID-19 pandemic, student visa applicants already faced an approximately 27 percent refusal rate that varies by time and region. Using data on the universe of SAT takers between 2004 and 2015 matched with college enrollment records, we examine how the anticipated F-1 visa restrictiveness influences US undergraduate enrollment outcomes of international students. Using an instrumental variables approach, we find that a higher anticipated F-1 student visa refusal rate decreases the number of international SAT takers, decreases the probability of sending SAT scores to US colleges, and decreases international student enrollment in the US. The decreases are larger among international students with higher measured academic achievement. We also document academic achievement of international students and show that over 40 percent of high-scoring international SAT takers do not pursue US college education.
    Keywords: Immigration policy, migration, international student, F-1 visa, student visa, China
    JEL: I21 I23 F22 J15
    Date: 2022–03
  27. By: Gabriel J. Felbermayr; Hendrik Mahlkow; Alexander Sandkamp
    Abstract: This Policy Brief analyses the long-run effects of an economic decoupling between the political West (i.e. the EU, the US and their allies) and the East (first and foremost Russia and China). A decoupling of Russia from the US and its allies would have much more severe long-term impacts for real income in Russia (minus 9.7 percent) than in the US and its allies (minus 0.2 percent). The reason for the uneven distribution of costs lies primarily in Russia’s low economic importance compared with the US and its allies.
    Date: 2022

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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.