nep-cna New Economics Papers
on China
Issue of 2022‒11‒14
six 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. One Country, Two Systems : Evidence on Retirement Patterns in China By Giles,John T.; Lei,Xiaoyan; Wang,Gewei; Wang,Yafeng; Zhao,Yaohui
  3. Revisiting China’s market economy status: state capitalism within the WTO liberal trading system By Stefanova, Boyka; Zhelev, Paskal
  4. Containing Chinese State-Owned Enterprises? : The Role of Deep Trade Agreements By Lefebvre,Kevin Jean-Rene; Rocha,Nadia; Ruta,Michele
  5. The Future of Global Economic Power By Seth G. Benzell; Laurence J. Kotlikoff; Maria Kazakova; Guillermo LaGarda; Kristina Nesterova; Victor Yifan Ye; Andrey Zubarev
  6. What Is the Outlook for China’s External Surplus? By Hunter L. Clark; Matthew Higgins

  1. By: Tang, Can (Renmin University of China); Zhao, Zhong (Renmin University of China)
    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: 2022–10
  2. By: Giles,John T.; Lei,Xiaoyan; Wang,Gewei; Wang,Yafeng; Zhao,Yaohui
    Abstract: This paper documents the patterns and correlates of retirement in China using a nationally representative survey, the China Health and Retirement Longitudinal Study. After documenting stark differences in retirement ages between urban and rural residents, the paper shows that China's urban residents retire earlier than workers in many Organisation for Economic Co-operation and Development countries and that rural residents continue to work until advanced ages. Differences in access to generous pensions and economic resources explain much of the urban-rural difference in retirement rates. Fending off the fiscal pressures resulting from rapid population aging will require encouraging longer working lives among more highly educated and skilled workers living in China's urban areas. The paper suggests that reducing disincentives created by China's employee pension system, improving health status, providing childcare, and elder care support may all facilitate longer working lives. Given spouse preferences for joint retirement, creating incentives for women to retire later may facilitate longer working lives for men and women.
    Keywords: Pensions&Retirement Systems,Health Care Services Industry,Labor Markets,Educational Sciences,Adolescent Health
    Date: 2021–05–06
  3. By: Stefanova, Boyka; Zhelev, Paskal
    Abstract: This paper examines the question of China’s compliance with market economy principles. China has reformed away from central planning in the past four decades, but has it achieved a fully-fledged market economy? The paper sheds new light on the contested nature of China’s market economy status from a political economy perspective. It draws on the Varieties of Capitalism analytical framework to posit China’s market economy status as the product of its national model of state-dominated institutional complementarities between high levels of trade openness and domestic regulation, including nonmarket principles for the deployment of financial resources and labour.
    Keywords: China, socialist market economy, WTO, Varieties of Capitalism
    JEL: F13 O24 P16 P33 P51
    Date: 2022
  4. By: Lefebvre,Kevin Jean-Rene; Rocha,Nadia; Ruta,Michele
    Abstract: Regional trade agreements increasingly include provisions that regulate state-owned enterprises. This paper combines new information on the content of “deep” regional trade agreements and data on Chinese firm-level exports during 2000-11 to analyze the spillover effect of rules on state-owned enterprises on the intensive and extensive margins of Chinese state-owned enterprises’ trade. Rather than containing state capitalism, regional trade agreements regulating state-owned enterprises signed by Chinese trading partners with third countries increase exports and entry of Chinese state-owned enterprises as they gain a competitive edge in regulated markets. This spillover effect is robust to several extensions and is even stronger for agreements that include rules on subsidies and competition policy. This finding points to the need for commonly agreed multilateral rules to regulate state owned enterprises.
    Keywords: International Trade and Trade Rules,Trade Policy,Competitiveness and Competition Policy,Competition Policy,Public Sector Administrative&Civil Service Reform,State Owned Enterprise Reform,Energy Privatization,Democratic Government,Economics and Finance of PublicInstitution Development,Privatization,De Facto Governments,Public Sector Administrative and Civil Service Reform
    Date: 2021–04–22
  5. By: Seth G. Benzell; Laurence J. Kotlikoff; Maria Kazakova; Guillermo LaGarda; Kristina Nesterova; Victor Yifan Ye; Andrey Zubarev
    Abstract: Which region(s) will come to dominate the world economy? This paper develops the Global Gaidar Model (GGM), a 17-region, 2-skills, 100-period OLG model, to address this and other questions. The model is carefully calibrated to 2017 UN demographic and IMF fiscal data. Productivity growth and its interaction with demographic change are the main drivers of future economic power. Fiscal conditions and automation matter are secondary factors. Our baseline simulations, which forecast productivity growth using each region’s long-term record, predict China and India becoming the world’s top two economic hegemons. GGM also predicts an evolving global savings glut, major reductions in world interest rates, substantial increases in tax rates in China and other regions due to population aging, and permanent differences in regional living standards. Our findings are, however, highly sensitive to productivity growth. If productivity growth continues at each region’s very recent pace, India will account for one third of 2100 world output and China for over one fifth. The US output share will grow slightly. Under other scenarios, productivity growth in China and India dramatically slows; Sub Saharan Africa’s sky rockets, leaving China’s plus India’s 2100 output share at only 16 percent and Africa’s at an astounding 17 percent.
    JEL: E0 J0 O1
    Date: 2022–10
  6. By: Hunter L. Clark; Matthew Higgins
    Abstract: The sharp slowdown in China’s property sector has reignited debate over the country’s future role as a net provider of savings to the global economy. The debate revolves around whether a sustained decline in property investment will spur a long-term increase in China’s current account surplus, given the country’s high savings rate. However, China’s rapidly aging population presents opposing forces that complicate this story. The shift of a large share of its population from working life to retirement will reduce savings supply even as a shrinking labor force will reduce investment demand. In this post, we focus on the demographic part of the story and find that this force will exert considerable downward pressure on China’s current account surplus in coming years.
    Keywords: China; savings; balance of payments; current account; demographics; trade
    JEL: F00
    Date: 2022–10–17

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