nep-cna New Economics Papers
on China
Issue of 2022‒05‒30
eight papers chosen by
Zheng Fang
Ohio State University

  1. The Future of Electric Vehicles in Asia By Alicia Garcia-Herrero
  2. The relationship between owner-occupied housing prices and rental housing rents: evidence from Beijing, China By Song, Zisheng; Wilhelmsson, Mats; Zalejska-Jonsson, Agnieszka
  3. Incomplete Catching Up: Income among Manchurian, Yi and Han People in Rural China from 2002 to 2018 By Gustafsson, Björn Anders; Zhang, Yudan
  4. Riding Out the COVID-19 Storm: How Government Policies Affect SMEs in China By Joy Chen; Zijun Cheng; Robin Kaiji Gong; Jinlin Li
  5. The Chinese Influence in Africa: Neocolonialism or Genuine Cooperation? By Vicini, Andrea; Ventroni, Matteo; Vicini, Matteo
  6. Monetary Policy Transmission and Policy Coordination in China By Miss Sonali Das; Wenting Song
  7. Cutting through the Value Chain: The Long-Run Effects of Decoupling the East from the West By Gabriel J. Felbermayr; Hendrik Mahlkow; Alexander-Nikolai Sandkamp
  8. Economic Relationships Between Sub-Saharan Africa and China: An Alternative Theoretical and Policy Paradigm? By Alice Sindzingre

  1. By: Alicia Garcia-Herrero (Chief Economist for Asia Pacific at Natixis; Institute for Emerging Market Studies, Hong Kong University of Science and Technology)
    Abstract: Why so much attention is being paid to electric vehicles (EVs) in the green transition? The main reason is that the technology already exists to help governments reduce emissions as at reasonable costs. By pushing the shift towards EVs, governments can buy time to develop the technology to reduce emissions in other sectors at a reasonable cost. A second reason is that the EV sector offers a great industrial opportunity, not only for those who have traditionally produced cars but also for newcomers. Who is leading the race? The EU and China are so far leading but in different ways. The EU was the first to encourage the demand for sustainable cars, and to a lesser extent to produce them. China encourages productions with subsidies and is expected to benefit from the huge potential demands Alicia Garcia Herrero Adjunct Professor for Science and Technology at HKUST Senior Research Fellow at BRUEGEL The Future of Electric Vehicles in Asia from Asia. China also leads in battery components and controls the supply of related raw materials. The more batteries become a bottleneck to production, the more China can lead the race. Can the EV industry become another geopolitical battlefield? Components for EV batteries could easily become another geopolitical standoff and, possibly, a new bottleneck in the global supply chain. Countries that have benefited from Europe's leadership position in the automotive sector need to get their act together by starting production and ensuring the supply of their components. As for Asia ex-China, it is time to think of stepping up production of EVs and batteries to avoid excessive reliance on Chinese exports.
    Date: 2022–05
  2. By: Song, Zisheng (Department of Real Estate and Construction Management, Royal Institute of Technology); Wilhelmsson, Mats (Department of Real Estate and Construction Management, Royal Institute of Technology); Zalejska-Jonsson, Agnieszka (Department of Real Estate and Construction Management, Royal Institute of Technology)
    Abstract: The relationship between housing prices or rents with other economic factors has been widely analysed. However, few studies use cross-sectional data to analyse the relationship between owner-occupied and rental housing sectors. This paper aims to develop a cross-sectional rent-price model and estimate the interconnected relationship between different market segments. Based on the transactional data of owner-occupied and rental housing in 2015–2018 in Beijing, China, we empirically conduct analyses of cross-sectional rent-price interconnectivity in total housing markets and segments such as housing size and school district. As expected, we find a bi-directional relationship between prices and rents in Beijing that goes in both directions, indicating that housing of different tenures substitute each other, and substitutional effects are significantly different across submarkets. Condominium prices have a more significant impact on rents than vice versa.
    Keywords: rents; owner-occupied housing prices; housing subsectors’ relationship
    JEL: C21 C51 C52 R32
    Date: 2022–05–11
  3. By: Gustafsson, Björn Anders (University of Gothenburg); Zhang, Yudan (Beijing Normal University)
    Abstract: Household income per capita among the rural Yi, Manchurian ethnic minority groups and the Han majority is studied using data from the China Household Income Project 2002, 2013 and 2018. The disparity in total per capita income between the Yi and Han populations narrowed, while the average income among the Manchurian population remained relatively similar to that among the Han population. Decomposing total income into sources shows that the rapid increase in agricultural income among the Yi was a main reason why the disparity in income compared to the two other ethnic groups narrowed. Nevertheless, it is true that the reliance on agricultural income among the Yi became less extreme as wage employment and migration increased. The Manchurian group and the Han group also experienced rapid increases in wages and self-employment income. The aggregated value of transfers from the public sector was similar for all three ethnic groups.
    Keywords: Manchurian, income, Han, ethnic minorities, China, Yi
    JEL: H31 J15 P36
    Date: 2022–04
  4. By: Joy Chen (Cheung Kong Graduate School of Business); Zijun Cheng (National School of Development, Peking University); Robin Kaiji Gong (Department of Economics, Hong Kong University of Science and Technology); Jinlin Li (National School of Development, Peking University and Harvard Kennedy School)
    Abstract: Based on a nationally representative survey on SMEs in China, we study the impact of government policy interventions on SMEs during the COVID-19 pandemic. Our findings are three-fold. First, regional and local lock-down policies decrease SMEs' incidence of reopening and delay their expected reopening in the near future, likely by reducing consumer demand. Second, stabilization policies in the form of payment deferrals and exemptions significantly improve SMEs' cash flows and further stimulate their operational recovery. This effect is more pronounced for firms with larger shares of high-skilled employees. Last, financial support policies do not appear to be effective in alleviating SMEs' cash constraints or encouraging the reopening of small businesses, potentially due to difficulties in accessing policy-oriented loans and misallocation of credit. Our findings shed new light on the policy debates on supporting SMEs during the COVID-19 pandemic.
    Keywords: COVID-19, Policy, China, SME
    JEL: D22 H71 H81 L23
    Date: 2020–07
  5. By: Vicini, Andrea; Ventroni, Matteo; Vicini, Matteo
    Abstract: The scope of the paper provides a different view than the current debate that tracks the historical trajectory of the relationship between China and Africa. The widely discussed economic influence of China in Africa comes from the end of WWII and has not been built in the last decade, as has been recently reported in many parts of the press. To understand this international relationship, it is important to put the events in the right historical perspective. This aspect is particularly true for a nation like China, which has a long-term vision for its diplomacy with respect to Western countries. However, the main economic and political connections between China and Africa and their mutual influences are examined in detail
    Keywords: China, Africa, international relations, economics, underdevelopment, diplomacy.
    JEL: F2 F5 F54
    Date: 2022–04
  6. By: Miss Sonali Das; Wenting Song
    Abstract: We study the transmission of conventional monetary policy in China, focusing on the interaction between monetary and fiscal policy given the unique institutional set-up for macroeconomic policy making. Our results suggest some progress but also continued difficulties in the transmission of monetary policy. Similar to recent studies, we find evidence of monetary policy pass-through to interest rates. However, the impact of monetary policy measures that are not coordinated with fiscal policy is significantly weaker than that of coordinated measures. This suggests the need for further improvements to the interest-rate based framework.
    Keywords: monetary policy, monetary fiscal coordination, textual analysis, China; monetary policy transmission; monetary policy measure; monetary policy pass-through; pass-through to interest rates; monetary policy shock; fiscal policy measure; Yield curve; Central bank policy rate; Monetary policy instruments; Deposit rates
    Date: 2022–04–29
  7. By: Gabriel J. Felbermayr; Hendrik Mahlkow; Alexander-Nikolai Sandkamp
    Abstract: With ever-increasing political tensions between China and Russia on one side and the EU and the US on the other, it only seems a matter of time until protectionist policies cause a decoupling of global value chains. This paper uses a computable general equilibrium trade model calibrated with the latest version of the GTAP database to simulate the effect of doubling non-tariff barriers - both unilateral and reciprocal - between the two blocks on trade and welfare. Imposing trade barriers almost completely eliminates bilateral imports. In addition, changes in price levels lead to higher imports and lower exports of the imposing country group from and to the rest of the world. The targeted country group increases exports to the rest of the world and reduces imports. Welfare falls in all countries involved, suggesting that governments should strive to cooperate rather than turning away from each other. By imposing a trade war on Russia, the political West could inflict severe damage on the Russian economy because of the latter’s smaller relative size.
    Keywords: trade, non-tariff barriers, global value chains, quantitative trade model, China, Russia, European Union
    JEL: F11 F13 F14 F17
    Date: 2022
  8. By: Alice Sindzingre (CEPN - Centre d'Economie de l'Université Paris Nord - LABEX ICCA - UP13 - Université Paris 13 - Université Sorbonne Nouvelle - Paris 3 - CNRS - Centre National de la Recherche Scientifique - UPC - Université Paris Cité - Université Sorbonne Paris Nord - CNRS - Centre National de la Recherche Scientifique - Université Sorbonne Paris Nord, LAM - Les Afriques dans le monde - IRD - Institut de Recherche pour le Développement - Université Bordeaux Montaigne - Institut d'Études Politiques [IEP] - Bordeaux - IEP Bordeaux - Sciences Po Bordeaux - Institut d'études politiques de Bordeaux - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Une question récurrente dans la littérature sur les relations entre la Chine et l'Afrique Sub-Saharienne est de comprendre si l'engagement chinois constitue un paradigme alternatif aux modèles « mainstream » relatifs aux théories ou politiques économiquespar exemple ceux promus par les institutions financières internationales. La Chine a en effet été analysée comme un modèle de développement original partageant de nombreux éléments avec ceux ayant caractérisés les Etats « développementaux » est-asiatiques, notamment des politiques économiques interventionnistes (politiques industrielles). Dans ce contexte, cet article argue que les principaux domaines des relations économiques Chine-Afriquecommerce, investissement et financement du développement-n'illustrent pas le modèle de la Chine comme Etat « développemental », étant surtout animés par des motivations de marché ou de coopération au développement. Certaines de leurs dimensions, cependant, illustrent le modèle développemental spécifique de la Chine.
    Abstract: An emerging question in the literature on the relationship between China and Sub-Saharan Africa is as to whether Chinese engagements provide for developing economies an alternative paradigm to mainstream models of economic theories and policies, an example being the framework promoted by the international financial institutions (IFIs). China has indeed been analyzed as an original model of development that has shared many core elements with those having characterized the East Asian "developmental states"notably active state intervention (industrial policies), in contrast with the IFIs framework. Against this background, it is argued that the main domains of China-Sub-Saharan African economic relationshipstrade, investment, development financegenerally do not illustrate the model of China as a developmental state, being mainly driven by market or development cooperation motives. In some dimensions, however, they illustrate China's specific developmental model.
    Keywords: China-Africa economic relationships,developmental states,foreign policy,industrial policies
    Date: 2021–11–16

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