nep-cna New Economics Papers
on China
Issue of 2022‒12‒12
seventeen papers chosen by
Zheng Fang
Ohio State University

  1. Geographic Variation in Inpatient Care Utilization, Outcomes and Costs for Dementia Patients in China By Lin, Zhuoer; Ba, Fang; Allore, Heather; Liu, Gordon G.; Chen, Xi
  2. Impacts of global value chains' participation and domestic consumption on manufacturing employment in China By Ping Hua
  3. Hate in the Time of COVID-19: Racial Crimes against East Asians By Carr, Joel; James, Jonathan; Clifton-Sprigg, Joanna; Vujic, Suncica
  4. Carbon emissions in China's thermal electricity and heating industry: an input-output structural decomposition analysis By Ling, Yantao; Xia, Senmao; Cao, Mengqiu; He, Kerun; Lim, Ming K.; Sukumar, Arun; Yi, Huiyong; Qian, Xiaoduo
  5. EU's global gateway strategy and building a global consensus vis-a-vis BRI By Panda, Jagannath P.
  6. (resubmit)Birth Order and Son Preference to Determine the Children of Shandong Province So Tall By Zhu Xiaoxu; Fan kecai; He hai; Zhang Ziyu
  7. Labor Market Implications of Taiwan's Accession to the WTO: A Dynamic Quantitative Analysis By Chang, Pao-Li; Chen, Yi-Fan; Hsu, Wen-Tai; Yi, Xin
  8. The Distributional Impacts of Transportation Networks in China By Ma, Lin; Yang, Tang
  9. Economic Impact of COVID-19 Containment Policies: Evidence Based on Novel Surface Heat Data from the People’s Republic of China By Du, Xinming; Tan, Elaine; Elhan-Kayalar, Yesim; Sawada, Yasuyuki
  10. Lessons for Europe from China’s quest for semiconductor self-reliance By Alicia García-Herrero; Pauline Weil
  11. A Closer Look at Chinese Overseas Lending By Jeffrey B. Dawson
  12. Can Digital Finance Promote the Technological Innovation of Agricultural Enterprises?—Evidence from NEEQ Companies in China By Gong, Zheng
  13. Caregiver-Child Interaction Duration and Early Childhood Development: Videotaped Evidence of Home Play in Rural China By Chen, Yuting; Gao, Jingjing; He, Yang; Wang, Tianyi; Liu, Chengfang; Luo, Renfu
  14. Health shock, medical insurance and financial asset allocation: evidence from CHFS in China By Liu, Yaxuan; Hao, Yu; Lu, Zhi Nan
  15. ‘Tiger-Hunting’ and Life Satisfaction: A Matter of Trust By Youxing Zhang; Peter Howley; Clemens Hetschko
  16. Bolstering Europe’s Economic Strategy vis-à-vis China By Mikko Huotari; Sébastien Jean
  17. Remotely (and wrongly) too equal: Popular night-time lights data understate spatial inequality By Xiaoxuan Zhang; John Gibson; Xiangzheng Deng

  1. By: Lin, Zhuoer (Yale University); Ba, Fang (Yale University); Allore, Heather (Yale University); Liu, Gordon G. (Peking University); Chen, Xi (Yale University)
    Abstract: Dementia leads public health issue worldwide. China has the largest population of adults living with dementia in the world, imposing increasing burdens on the public health and healthcare systems. Despite improved access to health services, inadequate and uneven dementia management remains common. We document the provincial-level geographic patterns in healthcare utilization, outcomes, and costs for patients hospitalized for dementia in China. Regional patterns demonstrate gaps in equity and efficiency of dementia care and management for dementia patients. Health policy and practices should consider geographic disparities in disease burden and healthcare provision to promote equitable allocation of resources for dementia care throughout China.
    Keywords: dementia, health care, hospitalization, inpatient costs, in-hospital mortality, geographic variation
    JEL: J14 I11 I14 I18 H75
    Date: 2022–11
  2. By: Ping Hua (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The literature on the employment impact of China's GVCs participation has focused on the Chinese imports substitution effects in developed countries, while few studies are made on the impact on domestic job creations. To complete this gap, this study proposes GVCs labor demand functions, which is augmented of domestic demand to control the impact of the Chinese reorientation development strategy to domestic consumption-led growth model (rarely studied). The functions are applied to panel data of 16 Chinese manufacturing industries over the 2005-2014 period using Arellano and Bond's GMM estimator for dynamic panel data model specifications. The obtained results show that China's backward linkages increased employment while forward linkages and GVCs position decreased it. The decline in processing and assembly activities of 3.4% per year on average diminished the employment of 0.9%. The increase of 0.95% per year on average of Chinese intermediate goods embodied in third countries' exports decreased the employment of 0.3%. The rise in final domestic demand of 20% per year on average increased the employment of 1.6% per year on average, which is higher than the negative effects of backward and forward linkages. These results provide a favor argument for China's "dual circulation" development strategy from the point of view of employment.
    Keywords: GVCs,domestic consumption,manufacturing employment,China
    Date: 2022–11–05
  3. By: Carr, Joel (University of Antwerp); James, Jonathan (University of Bath); Clifton-Sprigg, Joanna (University of Bath); Vujic, Suncica (University of Antwerp)
    Abstract: We provide evidence of the impact of the COVID-19 pandemic on racial hate crime in England and Wales. Using various data sources, including unique data collected through Freedom of Information (FOI) requests from UK police forces, a difference-in-difference and event study approaches, we find that racial hate crime against East Asians increased by 70-100%, beginning in early February and persisted until November 2020. This increase was greatest in the weeks leading up to the first national lockdown in the UK. The shock was then lower during lockdown, before increasing again in the summer 2020. We present evidence that hate crime increased as COVID-19 cases in China increased and following announcements from the government signalling that China or Chinese individuals posed a public health risk to the UK. This indicates that protectionism played an important role in the observed hate crime spike. The hate crime shock was also positively correlated with the salience of the national lockdown and government policies restricting certain freedoms. The effect was driven largely by changes in London. This suggests that retaliation for lockdown contributed to the rise in hate crime.
    Keywords: COVID-19, hate crime, xenophobia, difference-in-differences, event study
    JEL: J15 C23 D63
    Date: 2022–11
  4. By: Ling, Yantao; Xia, Senmao; Cao, Mengqiu; He, Kerun; Lim, Ming K.; Sukumar, Arun; Yi, Huiyong; Qian, Xiaoduo
    Abstract: CO2 emissions from China accounted for 27 per cent of global emisions in 2019. More than one third of China's CO2 emissions come from the thermal electricity and heating sector. Unfortunately, this area has received limited academic attention. This research aims to find the key drivers of CO2 emissions in the thermal electricity and heating sector, as well as investigating how energy policies affect those drivers. We use data from 2007 to 2018 to decompose the drivers of CO2 emissions into four types, namely: energy structure; energy intensity; input-output structure; and the demand for electricity and heating. We find that the demand for electricity and heating is the main driver of the increase in CO2 emissions, and energy intensity has a slight effect on increasing carbon emissions. Improving the input-output structure can significantly help to reduce CO2 emissions, but optimising the energy structure only has a limited influence. This study complements the existing literature and finds that the continuous upgrading of power generation technology is less effective at reducing emissions and needs to be accompanied by the market reform of thermal power prices. Second, this study extends the research on CO2 emissions and enriches the application of the IO-SDA method. In terms of policy implications, we suggest that energy policies should be more flexible and adaptive to the varying socio-economic conditions in different cities and provinces in China. Accelerating the market-oriented reforms with regard to electricity pricing is also important if the benefits of technology upgrading and innovation are to be realised.
    Keywords: Carbon dioxide reduction; China; Decomposition analysis; Electricity; Energy intensity; Energy structure; EP/R035148/1; 51808392
    JEL: R14 J01
    Date: 2021–12–20
  5. By: Panda, Jagannath P.
    Abstract: The Belt and Road Initiative paved the way for China to establish far-reaching trade relations and greater political influence across continents. Dominating the Indo-Pacific region by building up the dependence of the countries there on China is only part of the strategy. China's actions in this regard are observed with unease by researchers and practitioners. Various multilateral projects are trying to present an alternative in the Indo-Pacific region, including the EU's Global Gateway Strategy Project. What this strategy entails and how it can play a role in shaping global consensus on the BRI will be outlined below.
    Keywords: Belt and Road Initiative,China,Geopolitics,EU,Global Gateway Strategy,Indo-Pacific
    Date: 2022
  6. By: Zhu Xiaoxu; Fan kecai; He hai; Zhang Ziyu
    Abstract: More children in Shandong Province are stunted than any other province in China. Data on more than 122,000 children show a dramatic increase in height advantage with birth order in Shandong relative to the average of other provinces. We suggest that the steep birth order gradient in Shandong is due to a preference for the eldest child, which influences parental fertility decisions and resource allocation to children. We show that within Shandong province, the gradient is steeper for regions and cultures with a high preference for the eldest child. As predicted, this gradient also varies with the sex of the sibling. By back-calculating, the steeper birth order gradient in Shandong Province explains more than half of the average height gap between Shandong Province and the rest of China.
    Date: 2022–11
  7. By: Chang, Pao-Li (Singapore Management University); Chen, Yi-Fan (National University of Kaohsiung); Hsu, Wen-Tai (Academia Sinica); Yi, Xin (Singapore Management University)
    Abstract: We study the effects of Taiwan’s accession to the WTO in 2002 on the labor market dynamics in Taiwan during 1995–2020. Based on the dynamic hat algebra of Caliendo, Dvorkin and Parro (2019), we modify the framework to allow for differently skilled labor inputs (low, middle, high) and sector-skill dynamic choice by workers. We map the model to the labor-market transition data in Taiwan (based on quasi-longitudinal household surveys), the country-sector-specific skill shares in production, and the bilateral trade flows and import tariffs, for 61 economies and 22 sectors for the period 1995–2007. We study the counterfactual dynamics if the bilateral tariffs related to Taiwan’s imports and exports were rolled back to their levels in 1995, and calculate the cumulative effects on the employment shares and on the welfare of workers by sector and skill. We find the tariff reductions during this period to explain very much the observed expansion of Taiwan’s MCEE and business services sectors in their employment shares, and the growing share of high-skilled workers in Taiwan’s labor composition. We also conduct alternative counterfactuals to evaluate the effects of bilateral tariff concessions between Taiwan and China only, China’s WTO accession, and combined accessions by both Taiwan and China. We find bilateral tariff concessions to account for the bulk of the effects of Taiwan’s WTO accession, illustrating the importance of China to Taiwan in the latter’s trade structure.
    Keywords: WTO; Dynamic Quantitative Analysis; Labor Market Dynamics; Welfare Effects; Mobility Frictions; Skill Upgrading
    JEL: E24 F13 F14 F16 F17
    Date: 2022–04–29
  8. By: Ma, Lin (Singapore Management University); Yang, Tang (Nanyang Technological University)
    Abstract: This paper evaluates the distributional impacts of transportation networks in China. We show that the quality of roads and railroads vary substantially over time and space, and ignoring these variations biases the estimates of travel time. To account for quality differences, we construct a new panel dataset and approximate quality using the design speed of roads and railroads that varies by vintage, class, and terrain at the pixel level. We then build a dynamic spatial general equilibrium model that allows for multiple modes and routes of transportation and forward-looking migration decision. We find aggregate welfare gain and less spatial income inequality led by expanding transportation network.
    Keywords: regional trade; migration; welfare; economic geography
    Date: 2022–07–01
  9. By: Du, Xinming (Columbia University); Tan, Elaine (Asian Development Bank); Elhan-Kayalar, Yesim (Asian Development Bank); Sawada, Yasuyuki (University of Tokyo)
    Abstract: Since the outbreak of the coronavirus disease (COVID-19) pandemic, governments around the globe have undertaken multiple policies to control its spread. Yet, only a few studies estimated the cost of COVID-19-related stringency measures on economic output, which can be attributable to the time lag and low frequency of conventional economic data. To bridge this gap in the literature, this paper uses novel high-frequency and spatially granular surface urban heat island (SUHI) data from satellites to quantify the impact of COVID-19-related containment policies in the People’s Republic of China, exploiting variations in such policies. Three empirical results emerge. First, we find stringency measures decrease urban heat island in locked cities only marginally, which is equivalent to 0.04–0.05 standard deviation or CNY22.2 billion ($3.6 billion) of economic output drop which is a 0.09% annual gross domestic product decline in 2020. Second, our results suggest that governments have been learning continuously to manage containment measures better. Third, the government’s containment policies have generated both positive and negative spillover effects on unlocked cities in which the former effect has dominated the latter.
    Keywords: COVID-19 pandemic; economic costs of containment measures; surface heat island (SUHI) data from satellites; PRC
    JEL: A10 O20
    Date: 2022–10–26
  10. By: Alicia García-Herrero; Pauline Weil
    Abstract: This paper explores China's efforts to enhance their domestic semiconductor output, and the lessons to be learnt from their quest for self-reliance.
    Date: 2022–11
  11. By: Jeffrey B. Dawson
    Abstract: While considerable attention has focused on China’s credit boom and the rise of China’s domestic debt levels, another important development in international finance has been growth in China’s lending abroad. In this post, we summarize what is known about the size and scope of China’s external lending, discuss the incentives that drove this lending, and consider some of the challenges these exposures pose for Chinese lenders and foreign borrowers.
    Keywords: China; Banks and Banking; international economics
    JEL: F0 G2
    Date: 2022–11–09
  12. By: Gong, Zheng
    Keywords: Agricultural Finance, Research and Development/Tech Change/Emerging Technologies
    Date: 2021
  13. By: Chen, Yuting; Gao, Jingjing; He, Yang; Wang, Tianyi; Liu, Chengfang; Luo, Renfu
    Keywords: Labor and Human Capital
    Date: 2021
  14. By: Liu, Yaxuan; Hao, Yu; Lu, Zhi Nan
    Abstract: Background: As health care cost is taking an increasingly substantial proportion of national wealth, health shocks and the subsequent medical expenditures have become increasingly vital contributions to financial risks. However, the individual or combined effects of social and financial medical insurance on household financial behaviors are poorly understood. This research aims to examine the effect of health shocks on financial asset mobility and portfolio allocation of the household. Also, whether medical insurance positively affects the financial market will be analyzed. Methods: Linear-regression models are used to determine the relationship between health shock, medical insurance, and household financial behaviors, including liquidity measures and financial portfolio (risk and risk-free assets). Two types of variables (transition probability and upward mobility) are constructed to measure the aggregate-level financial asset mobility. The portfolio of financial assets is categorized according to the risk it bears. Results: Households which experience health shocks are found to exhibit lower transition probability and upward mobility of financial assets than households that do not, and health shocks pose a more serious threat to low-income households. From the inter-temporal perspective, households that have medical insurance exhibit a higher probability of raising their position within the national financial asset distribution, and are more inclined to invest in the risky financial assets. Commercial insurance displays a larger marginal effect on financial asset allocation than social insurance. Our study results highlight an essential link between health shocks, medical insurance, and household financial behavior. Conclusion: This work identified and described the relationship between health-related factors (health shock and two types of medical insurance) and household financial behaviors (risky investment involvement and class mobility in financial asset). A strong link exists between the health and financial market, with heterogenous effects between urban and rural groups, households with distinct income levels, etc. A multilayered insurance system would be helpful to facilitate household income, financial consumption, and economic growth.
    Keywords: China; financial asset allocation; financial asset mobility; health shock; medical insurance
    JEL: F3 G3
    Date: 2022–10–21
  15. By: Youxing Zhang; Peter Howley; Clemens Hetschko
    Abstract: Governments will often look to publicly signal their efforts to tackle issues of concern as a way of garnering political support. Combining data on the public disclosure of anti-corruption efforts and individual well-being in China, we show that such signals may increase the salience of the issue in question and hence diminish the life satisfaction of citizens with low political trust. For citizens with high trust, such signals appear to enhance life satisfaction. This means that signalling efforts may have unintended negative consequences on population well-being and thus political support, particularly when faced with low political trust.
    Keywords: corruption, life satisfaction, political trust, signalling theory, confirmation bias
    JEL: D73 I31 P48 O17
    Date: 2022
  16. By: Mikko Huotari (MERICS - Mercator Institute for China Studies); Sébastien Jean (LIRSA - Laboratoire interdisciplinaire de recherche en sciences de l'action - CNAM - Conservatoire National des Arts et Métiers [CNAM] - HESAM - HESAM Université - Communauté d'universités et d'établissements Hautes écoles Sorbonne Arts et métiers université)
    Date: 2022–11–10
  17. By: Xiaoxuan Zhang (University of Waikato); John Gibson (University of Waikato); Xiangzheng Deng (IGSNRR, Chinese Academy of Sciences)
    Abstract: Several studies in economics and regional science use Defense Meteorological Satellite Program (DMSP) night-time lights data to measure spatial inequality. These DMSP data are a poor proxy in this context because they have spatially mean-reverting errors, yielding significantly lower inequality estimates than what sub-national GDP data show. Inequality estimates from DMSP are also lower than what newer, research-focused and more accurate, satellites show from their observations of the earth at night. In this paper, county-level data from the United States and China are used to demonstrate the understatement of spatial inequality when DMSP data are used. In both settings, benchmark data on sub-national GDP are available for establishing the level and trend in spatial inequality, which is then used to assess the accuracy of the estimates coming from remote sensing sources. In the rush to use big data it is important to not lose sight of basic measurement error features of some of these data sources.
    Keywords: DMSP;mean-reverting error;night lights;spatial inequality;VIIRS
    JEL: E01 R12
    Date: 2022–11–26

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