nep-cna New Economics Papers
on China
Issue of 2022‒10‒31
five papers chosen by
Zheng Fang
Ohio State University

  1. A Tale of Tier 3 Cities By Kenneth S. Rogoff; Yuanchen Yang
  2. The role of SOEs in the transmission of fiscal policy shocks in China By Makram El-Shagi; Lin Zhang
  3. The Big Expansion of Rural Secondary Schooling during the Cultural Revolution and The Returns to Education in Rural China By Terry Sicular; Mengbing Zhu
  4. Explaining the persistence of illegal Chinese mining in Ghana: the efficacious role of local patrons By Ocquaye, Nathaniel
  5. The Economic Impact of Covid-19 and Associated Lockdown Measures in China By Charpe, Matthieu

  1. By: Kenneth S. Rogoff; Yuanchen Yang
    Abstract: This paper provides new estimates of the housing stock, construction rates and price developments by city tier in China in order to understand where excess supply might be concentrated, and the implications of any significant contraction. We also update estimates of the size of China’s rapidly evolving real estate sector through 2021, allowing one to look at the initial impact of COVID-19, as well as extending the analysis to incorporate urban-expansion related infrastructure construction. We argue that China overall faces imbalances between supply and demand for housing stock, but the problem is significantly deeper in the generally smaller and lower income tier 3 cities, which nevertheless account for more than 60% of both China’s GDP and its housing stock.
    JEL: F39 G01 R3
    Date: 2022–09
  2. By: Makram El-Shagi (Center for Financial Development and Stability at Henan University, and School of Economics at Henan University, Kaifeng, Henan); Lin Zhang (Center for Financial Development and Stability at Henan University, and School of Economics at Henan University, Kaifeng, Henan)
    Abstract: In this paper, we demonstrate the importance of state-owned enterprises (SOEs) for the conduct of fiscal policy in China using both a structural VAR based on macroeconomic data and a panel model utilizing firm-level data. We show that SOEs respond fundamentally differently to fiscal policy shocks than non-SOEs. Our results strongly indicate that SOEs are not merely competition to non-SOEs but rather that their resources are leveraged as part of fiscal policy to support and stabilize the private economy.
    Keywords: China, fiscal policy, SOE
    JEL: E62 H32
    Date: 2022–10
  3. By: Terry Sicular (University of Western Ontario); Mengbing Zhu (Beijing Normal University, China)
    Abstract: During the Cultural Revolution China embarked on a dramatic, albeit temporary, expansion of secondary education in rural areas that affected tens of millions of children who reached secondary school age in the late 1960s and 1970s. The conventional wisdom is that this expansion was politicized and low quality. Using instrumental variables estimation, we exploit variation in the expansion across localities and birth cohorts to estimate the impact of Cultural Revolution education on individual outcomes. Creative use of historical county-level information matched with rich household survey data from the mid-1990s allows analysis of multiple outcomes. We find a significant, positive effect of Cultural Revolution years of education on off-farm employment and wage earnings. The effect on household income is mixed and likely reflects the substitution of market purchases for own production.
    Keywords: Education expansion, secondary education, returns to schooling, rural China, Cultural Revolution
    JEL: I21 I28 J24 J31 O15
    Date: 2022
  4. By: Ocquaye, Nathaniel
    Abstract: The Ghana-China relationship has in recent years had severe tensions resulting from the practice of illegal gold mining by some Chinese citizens. Several solutions, including military raids on illegal Chinese miners, have still yielded no tangible result. What explains the persistence of illegal Chinese mining in Ghana? Drawing from extensive literature review and personal experiences of the author, this paper will essentially argue that the persistence of illegal Chinese mining is a result of a collaborative effort between some local patrons in Ghana and some Chinese. The persistence of illegal Chinese mining is also at the core, a partnership between ‘comrades in need’ (local patrons) and ‘comrades with power’ (illegal Chinese gold miners) to primarily satisfy economic motives. Additionally, the paper also builds on insights from a previous publication (Alden & Ocquaye, 2021) to argue that local patrons are key to the successful absorption of the Chinese into the political economy of illegal mining in Ghana.
    Keywords: Chinese; illegal; local patrons; small-scale; Ghana
    JEL: R14 J01
    Date: 2023
  5. By: Charpe, Matthieu
    Abstract: This paper assesses at the local level the economic impact of Covid-19 and associated lockdown measures in China using high frequency nighttime lights data. Building a model of monthly light intensity, lights dropped by a factor ranging between 13 and 18 percent in early 2020. This corresponds to a decline in economic activity of between 9 and 12 percent and a decline in employment of between 2.6 and 3.6 percent. At the local level, the majority of administrative entities followed a v-shaped recovery, while a smaller number followed a u-shaped recovery or a double dip. At province level, light intensity is explained by the number of cases and a lockdown measure. In particular, the increase in stringency index from 0 in December 2019 to 78 in April 2002 explains a decline in lights by 7.4 percent.
    Keywords: Covid-19, lockdown, China, nighttime lights, big data
    JEL: O11 O18 R11 R12
    Date: 2022–10–03

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