nep-cna New Economics Papers
on China
Issue of 2023‒02‒13
six papers chosen by
Zheng Fang
Ohio State University

  1. Omnia Juncta in Uno*: foreign powers and trademark protection in Shanghai's concession era By Alfaro, Laura; Bao, Cathy; Chen, Maggie X.; Hong, Junjie; Steinwender, Claudia
  2. China's market reform debate By Lin, Chun
  3. The Development of Chinese Industries in the 4th Industrial Revolution and Korea-China Cooperation By Cho, Eun Kyo
  4. Air Pollution and Firm-Level Human Capital, Knowledge and Innovation By Tiago Cavalcanti; Kamiar Mohaddes; Hongyu Nian; Haitao Yin
  5. Policy brief: Politicization of the 5G: Divergent Policy Responses and Huawei’s Litigation Strategy By Bogdanova, Iryna
  6. The Chinese Automobile Industry is Increasing its Leverage in the Global Market By Kang, Bada

  1. By: Alfaro, Laura; Bao, Cathy; Chen, Maggie X.; Hong, Junjie; Steinwender, Claudia
    Abstract: We investigate how firms and markets adapt to trademark protection, an extensively used but under-examined form of IP protection to address asymmetric information, by exploring a historical precedent: China's trademark law of 1923. Exploiting unique, newly digitized firm-employee and firm-agent datasets from Shanghai in 1872-1941, we show that the trademark law, established as an unanticipated and Western-disapproved response to end foreign privileges in China, shaped firm dynamics and relationships on all sides of trade-mark conflicts. Western firms with greater dependence on trademark protection grew and raised brand investment, while Japanese businesses, most frequently accused of counterfeiting, contracted despite attempts to build their own brands. The trademark law also fostered relationships with domestic intermediaries, both within and outside the boundaries of Western firms, and the growth of the Chinese intermediary sector. At the market level, the trademark law did not reduce competition or raise brand prices, leading to a coexistence of trademarks and competitive markets and ultimately gains in consumer welfare. A comparison with previous attempts by foreign powers-such as extraterritorial rights and bilateral treaties-shows that the alternative institutions were broadly unsuccessful. *Omnia Juncta in Uno ("All Joined in One") was the Latin motto on the municipal seal of the Shanghai International Settlement (1843-1941) and signified the joint governance of foreign powers in the settlement.
    Keywords: trademark; firm dynamics; intermediaries; competition; IP institutions
    JEL: K11 D20 O10 O30 N40 F20
    Date: 2022–02–02
  2. By: Lin, Chun
    Abstract: Isabella M. Weber, How China Escaped Shock Therapy: The Market Reform Debate. London and New York: Routledge, 2021. 358 pp.
    Keywords: Wiley deal
    JEL: N0 F3 G3 J1
    Date: 2023–01–05
  3. By: Cho, Eun Kyo (Korea Institute for Industrial Economics and Trade)
    Abstract: Lately, as the U.S.-China trade war has developed into a scramble for market dominance in the fourth industrial revolution, China’s development of new industries associated with fourth industrial revolution technologies is gaining more attention. China has already reached globally-competitive levels of technological sophistication in the new technologies of the fourth industrial revolution, such as system semiconductors, artificial intelligence (AI), 5G, and the US-China tech war has in fact something to do with the rapid growth of these new technologies in China. China’s rapid growth in these technologies, where the complementary vertical division of labor for traditional major industries between Korea and Japan is not applicable, is a considerable threat to Korea. Therefore, the promotion strategies and present competitiveness of China’s new industries need to be investigated so that Korea’s industries can react and enhance their competitiveness against the rapid growth in China. In this report, trends and changes in the industrial policies of China -- which is quickly emerging as a major rival in new technology as the fourth industrial revolution progresses -- will be studied, and the industrial ecosystem and competitiveness level between Korea and China will be compared and analyzed. It is expected that comparisons of the growth rate and development conditions of the two countries will offer a useful frame of reference when plotting competition and cooperation strategies. The objects for analysis comprise the following: system semiconductors, robots, AI, big data, and 5G mobile telecommunications of the new industries associated with the fourth industrial revolution.
    Keywords: China; industrial policy; industrial ecosystem; US-China conflict
    JEL: L16 L52 O11 O25 O53 P21
    Date: 2023–01–08
  4. By: Tiago Cavalcanti; Kamiar Mohaddes; Hongyu Nian; Haitao Yin
    Abstract: This paper investigates the long-run effects of prolonged air pollution on firm-level human capital, knowledge and innovation composition. Using a novel firm-level dataset covering almost all industrial firms engaged in science and technology activities in China, and employing a regression discontinuity design, we show that prolonged pollution significantly diminishes both the quantity and the quality of human capital at the firm level. More specifically, we show that air pollution affects firm-level human capital composition by reducing the share of employees with a PhD degree and master’s degree, but instead increasing the share of employees with bachelor’s degree. Moreover, the difference in the composition of human capital materially change the knowledge and innovation structure of the firms, with our estimates showing that pollution decreases innovations that demand a high level of creativity, such as publications and inventions, while increasing innovations with a relatively low level of creativity, such as design patents. Quantitatively, on the intensive margin, one μg/m3 increase in the annual average PM2.5 concentration leads to a 0.188 loss in the number of innovations per R&D employee. Overall, we show that air pollution has created a gap in human capital, knowledge, and innovation between firms in the north and south of China, highlighting the importance of environmental quality as a significant factor for productivity and welfare.
    Keywords: Pollution, human capital, knowledge, innovation and China
    JEL: O15 O30 O44 Q51 Q56
    Date: 2023–01
  5. By: Bogdanova, Iryna
    Abstract: Executive Summary The great-power rivalry between the United States and China, the European Union’s policy of technological sovereignty as well as the nature and economic implications of the fifth-generation wireless (5G) set the context for the politicization of said technology. This politicization is reflected in the growing resistance to the participation of the Chinese technology giant Huawei Technologies Co., Ltd. in the 5G projects. As numerous states shore up legislation and administrative actions geared toward eliminating Huawei’s participation in their 5G networks, China has maintained a proactive posture and redoubled efforts to export Chinese 5G infrastructure. In its turn, Huawei, as the company bearing financial and reputational costs deriving from the prohibitions on its participation in the 5G rollout, seized the opportunity of calling into question the legality of such restrictions. To achieve this, the company initiated administrative proceedings and disputes at the domestic and international levels. Policy brief by WTI's Postdoctoral Researcher, Dr Iryna Bogdanova
    Date: 2023–01–24
  6. By: Kang, Bada (Korea Institute for Industrial Economics and Trade)
    Abstract: This report examines the place of China’s automobile industry in the global market and analyzes the recent, rapid increase in Chinese automobile exports. In addition, the implications carried by the rise of Chinese auto exports for the Korean automobile industry are identified and analyzed.
    Keywords: China; manufacturing; auto industry; automotive industry; vehicle manufacturing; Korea; exports; automotive exports; vehicle exports; cars; trucks; autos
    JEL: F10 F23 L11 L16 L22 L25 L52 L60 L62
    Date: 2022–12–01

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