nep-cna New Economics Papers
on China
Issue of 2022‒10‒17
eleven papers chosen by
Zheng Fang
Ohio State University

  1. Informal Institution Meets Child Development: Clan Culture and Child Labor in China By Tang, Can; Zhao, Zhong
  2. Early Life Circumstances and the Health of Older Adults: A Research Note By Chen, Xi
  3. Malaria and Chinese Economic Activities in Africa By Cervellati, Matteo; Esposito, Elena; Sunde, Uwe; Yuan, Song
  4. Import competition and domestic transport costs By Michiel Gerritse; Andrea Caragliu
  5. City Size, Family Migration, and Gender Wage Gap: Evidence from Rural-Urban Migrants in China By Xing, Chunbing; Yuan, Xiaoyan; Zhang, Junfu
  6. China-US economic war: opportunities for the Andean Community beyond the decoupling process By Agramont Lechín, Daniel
  7. The role of natural resources in accelerating net-zero transitions: Insights from EV lithium-ion battery Technological Innovation System in China By Huiwen Gong; Allan Dahl Andersen
  8. Looking Backward, Innovating Forward: A Theory of Competitive Cascades By Kevin Lim; Daniel Trefler; Miaojie Yu
  9. Towards a Better Microcredit Decision By Mengnan Song; Jiasong Wang; Suisui Su
  10. Improved Transportation Networks Facilitate Adaptation to Pollution and Temperature Extremes By Panle Jia Barwick; Dave Donaldson; Shanjun Li; Yatang Lin; Deyu Rao
  11. Dollar Reserves and U.S. Yields: Identifying the Price Impact of Official Flows By Rashad Ahmed; Alessandro Rebucci

  1. By: Tang, Can; Zhao, Zhong
    Abstract: Using a national representative sample, the China Family Panel Studies, this paper explores the influences of clan culture, a hallmark of Chinese cultural history, on the prevalence of child labor in China. We find that clan culture significantly reduces the incidence of child labor and working hours of child laborer. The results exhibit strong boy bias, and are driven by boys rather than girls, which reflects the patrilineal nature of Chinese clan culture. Moreover, the impact is greater on boys from households with lower socioeconomic status, and in rural areas. Clan culture acts as a supplement to formal institutions: reduces the incidence of child labor through risk sharing and easing credit constraints, and helps form social norms to promote human capital investment. We also employ an instrument variable approach and carry out a series of robustness checks to further confirm the findings.
    Keywords: Informal institution,Clan culture,Child labor,China
    JEL: J22 J81 O15
    Date: 2022
  2. By: Chen, Xi (Yale University)
    Abstract: This paper reviews the latest evidence of the effects of early life circumstances on old-age health, distinguishing in utero exposures from childhood exposures to a wide range of environments. We then leverage the growing number of studies of the impact of the Great Chinese Famine (1959-1961) on the health of older adults to perform a meta-analysis and discuss potential mechanisms. Recent studies assembling multiple domains of early life circumstances are evaluated to better understand how various circumstances may coalesce and manifest in shaping long-term health.
    Keywords: early life circumstances, old-age health, famine, long-term health, meta-analysis, China
    JEL: I14 J14 J13 I18
    Date: 2022–08
  3. By: Cervellati, Matteo (University of Bologna, CEPR and IZA); Esposito, Elena (HEC and University of Lausanne); Sunde, Uwe (LMU Munich, CEPR and IZA); Yuan, Song (University of Warwick)
    Abstract: We present novel evidence for the influence of malaria exposure on the geographic location of Chinese economic activities in Africa. The hypothesis is based on the observation that many Chinese aid projects and infrastructure contractors rely on Chinese personnel. High malaria exposure might constitute an important impediment to their employment and productivity. Combining data on Chinese aid and construction projects with geo-localized information about the presence of individuals from internet posts reveals a lower density of Chinese activities and of Chinese workers in areas with a high malaria exposure. This effect is mitigated partly through heterogeneity across sectors and immunity of the local population, through the selection of Chinese workers from regions in China with historically high malaria risk, and through the availability of malaria treatment.
    Keywords: infrastructure projects; malaria; disease prevalence; immunity; weibo;
    JEL: F2 F6 J2 J6
    Date: 2021–11–11
  4. By: Michiel Gerritse (Erasmus University Rotterdam); Andrea Caragliu (Politecnico di Milano)
    Abstract: With China’s 2001 WTO accession, trade costs between the US and China fell sharply, but the transport costs of Chinese imports within the US remained sizable. We argue that domestic transport costs shield local labor markets from globalization. Using a shift-share design for industry-level Chinese imports across 42 ports of entry, we show that US job losses from competing imports occurred near the ports where they arrived. Once accounting for domestic transport costs, import competition affects coastal areas more than inland areas; shows larger impacts in housing markets and indirectly affected jobs; and explains voting, mortality and family formation
    Keywords: import competition, local labor markets, trade infrastructure, China syndrome, transport costs
    JEL: E24 F14 F16 R23 J23 J31 L60 O47 R12
    Date: 2022–09–29
  5. By: Xing, Chunbing (Renmin University of China); Yuan, Xiaoyan (Shanghai University); Zhang, Junfu (Clark University)
    Abstract: Finding suitable employment in a city is more challenging for married than unmarried migrants. This paper provides empirical evidence that the denser and more diversified labor markets in large cities help alleviate the colocation problem of married couples. Using data from China, we show that the gender wage gap among married migrants is significantly smaller in larger cities, and this is mainly because large cities have higher employer and population densities. Large cities make married women more likely to be employed and to secure suitable jobs after family migration. We find no evidence for alternative explanations for the correlation between city size and married women's relative wages.
    Keywords: city size, family migration, colocation choice, gender gap
    JEL: J31 R12 R23 O15
    Date: 2022–09
  6. By: Agramont Lechín, Daniel
    Abstract: Following Xi Jinping’s lead, China is heading towards a new modernization with the ambitious goal of becoming the leader in technological development. This has not gone unnoticed in the West, especially in the US. Tensions have increased, and a bilateral escalation is underway in what has already been dubbed as a return to great power competition. As a result, warnings are being voiced concerning a deepening of the deglobalization process, reinforced by an ongoing decoupling process between the two largest economies. This process is of special significance for the Andean Community, given that the contenders are its two largest trading partners. A first finding is that the Andean nations are far more dependent on trade with them than the other way around. This contradicts any notion that the Andean nations have a strong position in the world commodities trade. Nevertheless, several trade opportunities were found that stem from the trade tensions between China and the US. More importantly, it is shown that possibilities indeed exist to increase exports to both China and the US of non-traditional products over and above the usual commodity sales. Colombia has the largest opportunities in both destination markets, but one unexpected finding is that Ecuador has the second largest, with several such non-traditional products. Plus, Peru and Bolivia have several opportunities for diversification of exports to the US.
    Keywords: foreign policy; trade wars; China; Latin America; US; Andean region; primary dependence
    JEL: N26 F00 F50 F59
    Date: 2022
  7. By: Huiwen Gong (Department of Environmental Social Science, Eawag, Dübendorf, Switzerland); Allan Dahl Andersen (Centre for Technology, Innovation and Culture (TIK), University of Oslo, Norway)
    Abstract: As sustainability transitions in some sectors enter an acceleration phase, widespread diffusion of low-carbon technologies seem inevitable. While the availability of critical natural resources will inevitably influence the pace and direction of sustainability transitions, there is as yet little exploration on the role of natural resources in such upscaling and diffusion processes in transition studies. Drawing on the literature on technological innovation systems (TIS), this paper develops an analytical approach to highlight the natural resource dimension in a TIS value chain and link it to TIS dynamics (functional and structural) in the face of inter-sectoral imbalances caused by natural resource scarcity in accelerating transition processes. Empirically we study China's EV battery TIS which shows that a shortage of critical natural resource (especially lithium) has influenced the TIS functional and structural dynamics both within and across sectors and can severely impact transition processes. Overall, we plea for more research on natural resources in transition studies as many low-carbon technologies enter an upscaling and diffusion phase.
    Date: 2022–10
  8. By: Kevin Lim; Daniel Trefler; Miaojie Yu
    Abstract: Innovation depends on exporting and, in particular, on scale and competition in export markets. We develop a theory featuring (1) quality-segmented markets, (2) step-by-step innovation that moves firms forward along the quality ladder, and (3) escape-the-competition motives for innovation. We derive four predictions about the impact on innovation of scale and competition: a firm with a large and less-competitive quality segment ahead or forward of it will have strong incentives to innovate into this profitable segment, while a firm with a small and more-competitive quality segment behind it will also have strong incentives to innovate for fear of facing firms in this segment in the future. We take these predictions to Chinese firm-level data during a period of explosive export growth (2000-2006). Using information about scale and competition by quality segment in China's export markets, we confirm all four hypotheses. By implication, and unlike in standard CES models, the impact of trade on innovation depends critically on how it drives scale and competition in high- versus low-quality segments.
    JEL: F01 F12 F14 O3
    Date: 2022–09
  9. By: Mengnan Song; Jiasong Wang; Suisui Su
    Abstract: Reject inference comprises techniques to infer the possible repayment behavior of rejected cases. In this paper, we model credit in a brand new view by capturing the sequential pattern of interactions among multiple stages of loan business to make better use of the underlying causal relationship. Specifically, we first define 3 stages with sequential dependence throughout the loan process including credit granting(AR), withdrawal application(WS) and repayment commitment(GB) and integrate them into a multi-task architecture. Inside stages, an intra-stage multi-task classification is built to meet different business goals. Then we design an Information Corridor to express sequential dependence, leveraging the interaction information between customer and platform from former stages via a hierarchical attention module controlling the content and size of the information channel. In addition, semi-supervised loss is introduced to deal with the unobserved instances. The proposed multi-stage interaction sequence(MSIS) method is simple yet effective and experimental results on a real data set from a top loan platform in China show the ability to remedy the population bias and improve model generalization ability.
    Date: 2022–08
  10. By: Panle Jia Barwick; Dave Donaldson; Shanjun Li; Yatang Lin; Deyu Rao
    Abstract: The social costs of pollution and climate change hinge critically on humans’ ability to adapt. Based on transaction records from the world’s largest payment network, this research compiles daily travel flows and documents that China's rapid expansion of high-speed railways (HSR) facilitates the use of intercity travel as an effective adaptation strategy. Access to HSR reduces travelers' exposure to extreme air pollution and temperature by 7% and 10%, leading to substantial health benefits. These reductions are attributed to both contemporaneous responses to unexpected adverse conditions and also longer-horizon changes in travel patterns.
    JEL: O18 Q53 Q54 R41
    Date: 2022–09
  11. By: Rashad Ahmed; Alessandro Rebucci
    Abstract: This paper shows that the price impact of foreign official (FO) purchases or sales of U.S. Treasuries (USTs) is about twice as large as previously reported in the literature once critical sources of endogeneity are addressed. We also show that prevailing estimates of this price impact suffer from omitted variable bias when foreign government bond yields and Federal Reserve policies are not controlled for. By exploiting changes in the volatility of FO flows and U.S. yields after the 2008 Global Financial Crisis, we identify a FO flow shock via heteroskedasticity in a structural VAR. We estimate that a $100B flow shock moves the 5-year, 10-year, and 30-year yields by more than 100 basis points on impact, compared to the 19-44 basis points range that we estimate by assuming FO flows are price inelastic and without controlling for foreign yields and Fed actions. Our findings suggest that FO sales of USTs played a critical role during the March 2020 episode of Treasury market turmoil and that even a small reduction in the Dollar's share of China's reserves could have a significant impact on U.S. long-term interest rates.
    JEL: E4 F2 F30 G1
    Date: 2022–09

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.