nep-cna New Economics Papers
on China
Issue of 2022‒05‒23
eleven papers chosen by
Zheng Fang
Ohio State University

  1. Importing Air Pollution? Evidence from China's Plastic Waste Imports By Unfried, Kerstin; Wang, Feicheng
  2. Impacts of Increased Chinese Imports on Japan’s Labor Market: Firm and Regional Aspects By HAYAKAWA Kazunobu; ITO Tadashi; URATA Shujiro
  3. Relationship between the Real Estate Sector and the Stock Market in Chinese Provinces By Di, Zeyu; Heshmati, Almas; Liu, Sijia
  4. Performance Evaluation, Influence Activities, and Bureaucratic Work Behavior: Evidence from China By Alain de Janvry; Guojun He; Elisabeth Sadoulet; Shaoda Wang; Qiong Zhang
  5. Wages, labour market, and living standards in China, 1530-1840 By Liu, Ziang
  6. Catastrophic health expenditure and mental health in the older Chinese population: the moderating role of social health insurance By Yang, Wei; Hu, Bo
  7. How Africa Borrows From China: And Why Mombasa Port is Not Collateral for Kenya's Standard Gauge Railway By Brautigam, Deborah; Bhalaki, Vijay; Deron, Laure; Wang, Yinxuan
  8. The Impacts of the Dollar-Renminbi Exchange Rate Misalignment on the China-United States Commodity Trade: An Asymmetric Analysis By Sabrine Ferjani; Sami Saafi; Ridha Nouira; Christophe Rault
  9. Infrastructure and the politics of African state agency: shaping the Belt and Road Initiative in East Africa By Chiyemura, Frangton; Gambino, Elisa; Zajontz, Tim
  10. International Friends and Enemies By Benny Kleinman; Ernest Liu; Stephen J. Redding
  11. Measuring “Long and Healthy Lives†: Healthier Lives Longer Lives? By Gordon Anderson; Tongtong Hao

  1. By: Unfried, Kerstin (University of Göttingen); Wang, Feicheng (University of Göttingen)
    Abstract: Plastic waste trade has grown considerably in the last decades and has caused severe environmental problems in recipient countries. As the largest recipient, China has permanently banned the imports of plastic waste since 2018. This paper examines the causal effect of plastic waste imports on air pollution by exploiting China's experience of importing plastic waste and the recent import ban. Combining data on plastic waste imports with PM2.5 data at the city level for the years 2000-2011, we find that plastic waste imports increased PM2.5 density significantly. This effect is linked to expanded production in the waste processing sector and an increased number of incineration. To evaluate the impact of the import ban on air quality, we employ daily data on air pollution between 2015 and 2020. Our difference-in-differences results show that affected cities, relative to other cities, experienced a significant improvement in air quality following the ban. These findings suggest potential environmental gains from banning plastic waste imports in other countries.
    Keywords: PM2.5, air pollution, waste import ban, plastic waste trade, China
    JEL: F18 F64 Q53 Q56
    Date: 2022–04
  2. By: HAYAKAWA Kazunobu; ITO Tadashi; URATA Shujiro
    Abstract: Using firm/plant-level data from the Census of Manufacture, this study investigates the impact of Chinese import competition, focusing on different effects based on firm characteristics and regional factors. We find that import competition from China harms Japanese firms’ survival ratios, with the negative impacts being especially strong for smaller firms. Subcontractors are also more vulnerable to Chinese import competition. However, subcontractors in metropolitan areas experience lesser negative impact. In terms of the effects on firm employment, import competition from China had a negative impact, but no statistically significant difference exists based on firm size or whether firms are subcontractors. Firms with overseas affiliates in China or multiple domestic plants reduced their employment in Japan. Moreover, plants in Tokyo, Aichi, and Osaka areas have been particularly inflicted an adverse effect.
    Date: 2022–04
  3. By: Di, Zeyu (Jönköping University, Sogang University); Heshmati, Almas (Jönköping University, Sogang University); Liu, Sijia (Jönköping University, Sogang University)
    Abstract: In China, real estate and the stock market are the two main markets favored by both individual and institutional investors. There is a significant economic link between the two. Therefore, their relationship and long-term and short-term causality can provide good guidance for investors. This paper studies the causality and correlation relationship between the stock market and real estate sector's trading volumes in 31 provinces of China. Its empirical results are based on panel data from 2000 to 2016. Various panel unit root, co-integration, and model specification and estimation tests are carried out. The panel mean group is found to be the most suitable method for the analysis. The study finds that the main industries in different provinces may affect the short-term causal relationship between the real estate sector and the stock market. But in the long-run, the causal relationship between the two is 2-way and stable.
    Keywords: real estate, stock market, causal relationship, asset allocation, portfolio, economic area, Chinese provinces
    JEL: E22 H54 O16 O18 R53
    Date: 2022–04
  4. By: Alain de Janvry (University of California, Berkeley); Guojun He (Hong Kong University of Science and Technology); Elisabeth Sadoulet (University of California, Berkeley); Shaoda Wang (University of Chicago); Qiong Zhang (Renmin University of China)
    Abstract: Subjective performance evaluation is widely used by firms and governments to provide work incentives. However, delegating evaluation power to local senior leadership could induce influence activities: agents might devote much effort to pleasing their supervisors, rather than focusing on productive tasks that benefit their organizations. We conduct a large-scale randomized field experiment among Chinese local government employees and provide the first rigorous empirical evidence on the existence and implications of influence activities. We find that employees do engage in evaluator-specific influence to affect evaluation outcomes, and that this process can be partly observed by their co-workers. However, introducing uncertainty in the identity of the evaluator discourages evaluator-specific influence activities and significantly improves the work performance of local government employees.
    Keywords: subjective evaluation, influence activities, civil servants, work performance
    JEL: M12 D73 F63
    Date: 2020–09
  5. By: Liu, Ziang
    Abstract: Historical wages continue to provide new insights into the long-term development of the economy. In early modern Europe, the standard wage narrative hypothesises a “little divergence” in which England and the Low Countries outperformed other economies between 1500 and 1750. However, our knowledge of Chinese wage history remains considerably limited when it comes to the “great divergence” debate between China and leading economies in Europe. This article contributes to building a wage series in Lower Yangzi China from the sixteenth to the nineteenth centuries. It shows that despite the continued increase of nominal wages over this period, real day wages witnessed a sharp decline between 1620 and 1640, followed by a substantial improvement after1650, until a quick decline between 1740 and 1760. A wage gap between the Lower Yangzi and London may open up in the early eighteenth century, but this implication still awaits further examination considering the measurement limits in the current approach.
    Keywords: wage; living standard; labour market; early modern China; great divergence
    JEL: N30 N15 J21 J31
    Date: 2022–05
  6. By: Yang, Wei; Hu, Bo
    Abstract: OBJECTIVES: Catastrophic health expenditure (CHE) has considerable effects on household living standards, but little is known regarding the relationships between CHE and people's mental health. Using China as an example, this study examines the association between CHE and mental health and investigates whether the association differs between those with and without social health insurance (SHI). METHODS: The data came from 3 waves of the China Health and Retirement Longitudinal Study (2011, 2013, and 2015, N = 13,166). We focused on older people aged 60 and older. We built panel data regression and quantile regression models to analyze the data. RESULTS: Incurring CHE is significantly associated with poor mental health. The association is weakened among older people receiving SHI, which indicates that SHI has a protective effect. Moreover, the association between CHE and mental health and the protective effect of SHI are stronger among those with mild or moderate mental health problems. DISCUSSION: Our findings provide empirical evidence that encourages the integration of psychologically informed approaches in health services. We also urge governments in low- and middle-income countries to consider more generous health financing mechanisms for older people with greater health care needs.
    Keywords: catastrophic health expenditure; mental health; social health insurance; older people; China; OUP deal
    JEL: N0
    Date: 2022–01–01
  7. By: Brautigam, Deborah; Bhalaki, Vijay; Deron, Laure; Wang, Yinxuan
    Abstract: In December 2018, a leaked letter from Kenya's Auditor General (AG) warned that Kenya Ports Authority's assets-of which Mombasa Port is the most valuable-risked being taken over by China Eximbank if Kenya defaulted on the Standard Gauge Railway (SGR) loans. The rumor that Kenya had used Mombasa Port as collateral for the railway became widely accepted globally as another example of "Chinese debt trap diplomacy". Our research shows why this rumor is wrong. Unpacking this complicated case required expertise in the practice of international contract law, auditing, and commercial project finance. Our scholar-practitioner team's forensic analysis of all available primary documentation, over nearly two years, found significant mistakes in the AG's analysis. The AG's misreading was amplified by media misinterpretations of the project's take-or-pay agreement (TOPA) and its sovereign immunity waiver clause, both common features in international commercial project finance. Instead of a deliberate debt trap, the railway project was carefully and creatively designed to reduce the risks of a sovereign default and enhance the bankability of a project with high costs but significant long-term benefits for Kenya and the region. Our research puts Kenya's SGR in the context of debates over Chinese strategy and African development. We shed new light on how China Eximbank lends to large Belt and Road Initiative (BRI) infrastructure projects - and how African and other governments borrow. And for Kenyans, we provide the explanation that Kenya's government has failed to give: a detailed account of why they can rest easy that China is not going to be seizing their port - or indeed, any port.
    Date: 2022
  8. By: Sabrine Ferjani; Sami Saafi; Ridha Nouira; Christophe Rault
    Abstract: Contrary to most existing studies of the literature that assumed that the effects of real exchange rate (RE) misalignment on trade flows are symmetric, this paper considers a more general and realistic framework allowing for possible asymmetric effects. We use monthly time-series data over the January 2002-October 2020 period from 66 two-digit industries that trade between China and the U.S. in order to avoid the well-known aggregation bias. Estimates of symmetric error-correction models (ECM) revealed that real dollar-renminbi rate misalignment has short-run effects on 35 U.S. exporting and 53 U.S. importing industries. These short-run effects translated into the long run in 18 and 17 industries, respectively. The numbers increased considerably when estimating asymmetric ECM. Indeed, short-run asymmetric effects were then found in 47 U.S. exporting and 62 U.S. importing industries, which translated into long-run asymmetric effects in 20 U.S. exporting and 21 U.S. importing industries. Our analysis highlights the importance of separating currency overvaluation from currency undervaluation in assessing the effects of the RE misalignment on trade flows between the U.S. and China and confirms that the impacts are industry specific. Our findings (robust to possible structural breaks) are useful for trading industries, and policymakers, and advocate accounting for asymmetries when examining the RE misalignment-trade flows nexus.
    Keywords: asymmetry, nonlinear ARDL, exchange rate misalignment, commodity trade, China, the United States
    JEL: F14 F31 C10
    Date: 2022
  9. By: Chiyemura, Frangton; Gambino, Elisa; Zajontz, Tim
    Abstract: Infrastructure development has experienced a political renaissance in Africa and is again at the centre of national, regional, and continental development agendas. At the same time, China has been identified by African policy-makers as a particularly suitable strategic partner. As infrastructure has become a main pillar of Sino-African cooperation, there has been growing analytical interest on the role of African actors in shaping the terms and conditions and, by extension, the implementation of infrastructure projects with Chinese participation. This follows a more general African “agency turn” in China-Africa studies, which has shifted the research focus on the myriad ways in which African state and non-state actors shape the continent’s engagements with China. This article is situated within this growing body of literature and explores different forms of African state agency in the context of Tanzania’s planned Bagamoyo port, Ethiopia’s Adama wind farms, and Kenya’s Lamu port. We posit a non-reductionist and social-relational ontology of the (African) state which sees the state as a multifaceted and multi-scalar institutional ensemble. We show that the extent and forms of state agencies exerted are inherently interrelated with and, thus, highly contingent upon concrete institutional, economic, political, and bureaucratic contexts in which African state actors are firmly embedded. In doing so, we make the case for a context-sensitive analysis of various spheres of state agency in particular conjunctures of Sino-African engagement.
    Keywords: African agency; BRI; Ethiopia; Kenya; Tanzania; infrastructure; state; Tim Zajontz’s field research was conducted with the help of PhD scholarships from the Friedrich Ebert Foundation and the Economic and Social Research Council (ESRC).; Springer deal
    JEL: R14 J01
    Date: 2022–04–01
  10. By: Benny Kleinman (Princeton University); Ernest Liu (Princeton University); Stephen J. Redding (Princeton University)
    Abstract: We examine whether as countries become more economically dependent on a trade partner, they realign politically towards that trade partner. We use network measures of economic exposure to foreign productivity growth derived from the class of trade models with a constant trade elasticity. We establish causality using two different sources of quasi-experimental variation: China's emergence into the global economy and the reduction in the cost of air travel over time. In both cases, we find that increased economic friendship causes increased political friendship, and that our theory-based network measures dominate simpler measures of trading relationships between countries.
    Keywords: international relations, trade, productivity growth, real income
    JEL: F14 F15 F50
    Date: 2022–03
  11. By: Gordon Anderson; Tongtong Hao
    Abstract: On the presumption that a healthier life means a longer life, the “Long and Healthy Life†component of the Human Development Index relies solely upon a nations’ estimated life expectancy as its measure of the healthiness and life length of its populace. However, the well-established health-longevity gender paradox, that compared to Males, Females experience inferior health outcomes but superior longevity, suggests that the life expectancy-based index is insufficient for the task and potentially misleading from a health policy perspective. Here new, fit-for-purpose policy focused Health Indices and Inequality measures are introduced and explored in the light of the paradox in 21st century China. China’s longevity and health experiences are consistent with the paradox and, furthermore, they are trending in different directions. The analysis reveals that much is lost by not including a health component along with longevity in the Human Development Index.
    Keywords: Health Inequality, Inequality Measurement, Healthy-Longevity Paradox
    JEL: D63 I31 I32
    Date: 2022–05–18

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