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on China |
| By: | Christopher Clayton; Antonio Coppola; Amanda Dos Santos; Matteo Maggiori; Jesse Schreger |
| Abstract: | We document the rise of China in offshore capital markets. Chinese firms use global tax havens to access foreign capital both in equity and bond markets. In the last twenty years, China's presence went from raising a negligible amount of capital in these markets to accounting for more than half of equity issuance and around a fifth of global corporate bonds outstanding in tax havens. Using rich micro data, we show that a range of Chinese firms, including both tech giants and SOEs, use these offshore centers. We conclude by discussing the macroeconomic and financial stability implications of these patterns. |
| JEL: | F3 G10 G30 H87 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30865&r=cna |
| By: | Cho, Eun Kyo (Korea Institute for Industrial Economics and Trade) |
| Abstract: | Semiconductors are at the heart of the U.S.-China technology hegemony competition under the administration of U.S. president Joe Biden. Conflicts between the U.S. and China over the semiconductor supply chain are intensifying as Biden signed an executive order on February 24, 2021, ordering the government to investigate the supply chains for semiconductors, batteries, rare earths, and biopharmaceuticals. The U.S. enacted the Export Control Reform Act (ECRA) and the Foreign Investment Risk Review Modernization Act (FIRRMA) as parts of a larger omnibus bill, the National Defense Authority Act (NDAA) of 2018, and has been working to keep China’s semiconductor technology innovation in check through restrictions on Chinese firms such as Huawei and SMIC export controls. In addition, the Biden government’s review of the semiconductor supply chain is currently being led by the The Department’s Bureau of Industry and Security (BIS) of the U.S. Department of Commerce, and the U.S. is expected to focus its efforts on building a hightech and supply chain alliance in the future. China’s semiconductor industry faced a major ordeal as the Trump and Biden administrations imposed sanction after sanction. In what form will China’s technological independence strategy proceed? How should Korea respond to the U.S.-China semiconductor competition? With this question in mind, this study aims to examine the U.S. semiconductor supply chain reorganization strategy and China’s response strategy corresponding thereto. In addition, it determines an appropriate response strategy for Korea by anticipating the form the competition between the U.S. and China may take, how semiconductor supply chains may reorganize, and by exploring the possibility of China’s technological independence in the future. |
| Keywords: | semiconductors; chips; semiconductor industry; chipmaking; US; China; US-China conflict; supply chains; Korea; Export Control Act; supply chain management |
| JEL: | F02 O53 |
| Date: | 2022–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kieter:2022_001&r=cna |
| By: | Bergeaud, Antonin; Verluise, Cyril |
| Abstract: | We use patent data to study the contribution of the US, Europe, China and Japan to frontier technology using automated patent landscaping. We find that China's contribution to frontier technology has become quantitatively similar to the US in the late 2010s while overcoming the European and Japanese contributions respectively. Although China still exhibits the stigmas of a catching up economy, these stigmas are on the downside. The quality of frontier technology patents published at the Chinese Patent Office has leveled up to the quality of patents published at the European and Japanese patent offices. At the same time, frontier technology patenting at the Chinese Patent Office seems to have been increasingly supported by domestic patentees, suggesting the build up of domestic capabilities. |
| Keywords: | frontier technologies; China; patent landscaping; machine learning; patents |
| JEL: | O30 O31 O32 |
| Date: | 2022–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:117998&r=cna |
| By: | Mr. Kenneth 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 imbalances 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 outside tier 1 cities. |
| Keywords: | China; Real Estate; Macro Economy; sector vulnerability; housing stock estimation; infrastructure construction; infrastructure investment; construction rate; Housing; Stocks; Infrastructure; Housing prices; Depreciation |
| Date: | 2022–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2022/196&r=cna |
| By: | Jasmin Gröschl; Alexander Sandkamp; Jasmin Katrin Gröschl |
| Abstract: | We quantify the impact of large flooding events on the plant-level trade of manufacturing firms in China. Constructing a panel data set of more than 685, 000 geolocated plants and provincial city and county measures of flooding events derived from precise geolocated monthly flood areas, we show that the impact on production facilities can be considerable, although relatively short-lived. While the number of exporting plants remains below its pre-flood level for at least 12 months, the effect on the distribution of exporter market scope, on the average exporter scale or the sales distribution of plants vanish within a year. Privately owned plants are hit harder than state-owned enterprises, as they continuously produce fewer products, while their export value recovers. Producing products covered by the Chinese Communist’s Party five-year plan tends to insulate firms against the negative effects of floods |
| Keywords: | China, trade, firm heterogeneity, natural disasters |
| JEL: | F14 F18 Q54 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ifowps:_389&r=cna |
| By: | David Autor; David Dorn; Gordon H. Hanson |
| Abstract: | Previous research finds that the greater geographic mobility of foreign than native-born workers following economic shocks helps to facilitate local labor market adjustment to shifting regional economic conditions. We examine the role that immigration may have played in enabling U.S. commuting zones to respond to manufacturing job loss caused by import competition from China. Although population headcounts of the foreign-born fell by more than those of the native-born in regions exposed to the China trade shock, the overall contribution of immigration to labor market adjustment in this episode was small. Because most U.S. immigrants arrived in the country after manufacturing regions were already mature, few took up jobs in industries that would later see increased import penetration from China. The foreign-born share of the working-age population in regions with high trade exposure was only three-fifths that in regions with low exposure. Immigration thus appears more likely to aid adjustment to cyclical shocks, in which job loss occurs in regions that had recent booms in hiring, rather than facilitating adjustment to secular regional decline, in which hiring booms occurred in the more distant past. |
| JEL: | E24 F14 F16 J23 J31 L60 O47 R12 R23 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30904&r=cna |
| By: | Al-Haschimi, Alexander; Apostolou, Apostolos; Azqueta-Gavaldon, Andres; Ricci, Martino |
| Abstract: | We develop a measure of overall financial risk in China by applying machine learning techniques to textual data. A pre-defined set of relevant newspaper articles is first selected using a specific constellation of risk-related keywords. Then, we employ topical modelling based on an unsupervised machine learning algorithm to decompose financial risk into its thematic drivers. The resulting aggregated indicator can identify major episodes of overall heightened financial risks in China, which cannot be consistently captured using financial data. Finally, a structural VAR framework is employed to show that shocks to the financial risk measure have a significant impact on macroeconomic and financial variables in China and abroad. JEL Classification: C32, C65, E32, F44, G15 |
| Keywords: | China, financial risk, LDA, machine learning, textual analysis, topic modelling |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20232767&r=cna |
| By: | Zhiguo He; Yuehan Wang; Xiaoquan Zhu |
| Abstract: | As a bridge between Chinese mainland and international financial markets, the Stock Connect program allows investors on both sides to gain mutual access. By analyzing how cross-border flows respond to macro-related shocks, we show that compared with possibly homemade foreign investors, genuine foreign investors are more likely affected by the U.S. monetary shocks, the exchange rate risk, the U.S. market performance as well as the cross-market valuation disparity. The paper highlights the importance of profiling different groups of cross-border participants over market integration. |
| JEL: | E50 F65 G23 O16 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30893&r=cna |
| By: | Marcella Alsan; Luca Braghieri; Sarah Eichmeyer; Minjeong Joyce Kim; Stefanie Stantcheva; David Y. Yang |
| Abstract: | Concerns have been raised about the “demise of democracy”, possibly accelerated by pandemic-related restrictions. Using a survey experiment involving 8, 206 respondents from five Western democracies, we find that subjects randomly exposed to information regarding civil liberties infringements undertaken by China and South Korea to contain COVID-19 became less willing to sacrifice rights and more worried about their long-term-erosion. However, our treatment did not increase support for democratic procedures more generally, despite our prior evidence that pandemic-related health risks diminished such support. These results suggest that the start of the COVID-19 crisis was a particularly vulnerable time for democracies. |
| JEL: | I1 P0 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30846&r=cna |
| By: | Kim, Bawoo (Korea Institute for Industrial Economics and Trade); Kim, Yunsoo (Korea Institute for Industrial Economics and Trade); Kim, Kye Hwan (Korea Institute for Industrial Economics and Trade) |
| Abstract: | China's recent export regulations have exposed weaknesses in Korea's industrial supply chain. China's restrictions on the export of raw materials, such as urea and chemical fertilizers, have shed light on problems in Korea's supply chain. Key countries have been attempting to diagnose weaknesses in their supply chains using various approaches. A high dependency on exports and trade imbalances are broadly recognized as indicators of supply chain weakness. The current study builds on that same foundation to define vulnerabilities among imports from China. In this study, urea and other goods with vulnerability issues were categorized as "products of interest" or "vulnerable products." This report diagnoses weaknesses in Korea's supply chain with regards to China, identifying products of interest and vulnerability using trade statistics. |
| Keywords: | Korea; China; trade; supply chains; economic security; national security; trade conflict; international political economy; strategic diversification; strategic cooperation; trade policy; international trade; export dependency; industrial policy |
| JEL: | F10 F13 F14 F18 F21 F29 F50 F52 |
| Date: | 2021–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kietia:2021_019&r=cna |
| By: | Gwak, Daejong (Korea Institute for Industrial Economics and Trade) |
| Abstract: | Compared with the Paris Agreement, in which countries agreed to reduce carbon emissions, the current paradigm is shifting to the pursuit of carbon neutrality, which has cost implications for carbon positive beyond reduction. In order to actively respond to climate change, global regulations and corporate management activities have changed, and as a result, the global economic order is being reorganized with a focus on carbon neutrality. Major countries are promoting the simultaneous achievement of economic revitalization and carbon neutrality through green industry development. In particular, Korea, Japan, and China, the economies of which feature a strong manufacturing sector and energy-intensive industrial structures, as well as insufficient energy resources, face many challenges in transitioning to a carbon-neutral economy. From this point of view, this article examines the carbon-neutral policies of Korea, Japan, and China, summarizes the potential and current status of each country’s photovoltaic (PV) sector, and identifies implications for policy these findings carry for Korea. |
| Keywords: | energy; energy policy; environmental policy; solar photovoltaic; solar energy; solar power; solar PV; PV; environmental regulations; Korea; China; Japan; net-zero; carbon neutrality; net zero emissions; carbon emissions; emissions policy; climate change |
| JEL: | Q53 Q54 Q56 Q58 |
| Date: | 2022–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kieter:2022_005&r=cna |
| By: | Zhou, Haiwen |
| Abstract: | The mutual dependence between national integration and institution building is established in a formal model. It is shown that a decrease in transportation costs, but not necessarily an increase in population size, reduces the equilibrium number of states and the adoption of rule-based institutions. With endogenous transportation costs or endogenous population size, the unification process can feed on itself. The model is illustrated by the state of Qin’s unification of China in 221 BC. During this process of national integration, transformations from relation-based governance to rule-based governance happened. |
| Keywords: | National integration, institution building, China, rule-based governance, optimal size of nations |
| JEL: | H56 N45 R40 |
| Date: | 2023–01–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:116152&r=cna |
| By: | Xin Su; Frédéric Ghersi (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique); Fei Teng; Gaëlle Le Treut; Meicong Liang |
| Abstract: | Designing mid-century low-emission development strategies is crucial to guiding long-term mitigation pathways at national levels. The cost of low-carbon transition is one of the key concerns in deep decarbonisation pathways (DDPs). In this study, we estimate the macroeconomic cost of a deep decarbonisation pathway for China, by integrating an energysystems optimization model with an economic model through hard linking. Our results show that deep decarbonisation increases the energy expenses of households in the mid-run through, especially, the higher cost of power and its substitution to coal; but not those of firms, who benefit from lower coal prices caused by the reduction of coal demand and reduce costly oil products consumptions early on. Energy-efficiency improvements therefore lead to a decrease of firms' total energy costs, which allows partially compensating the crowding-out effect of low-carbon investment on general productive capital. Compared to business-as-usual, our DDP 2 scenario consequently comes at a small macroeconomic cost, equal to a lag of less than one year of growth in 2050. |
| Keywords: | Hybrid energy-economy model China deep decarbonisation pathways mitigation, Hybrid energy-economy model, China, deep decarbonisation pathways, mitigation |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03897206&r=cna |
| By: | Kim, Bawoo (Korea Institute for Industrial Economics and Trade); Kim, Jeong-Hyun (Korea Institute for Industrial Economics and Trade) |
| Abstract: | This article aims to examine the trade war so far and the impact of additional U.S. tariffs on the Korean economy. The reason we do not consider Chinese tariffs is because their impact is limited. This chapter also discusses the background and progress of the trade war thus far. The U.S.-China trade war was initiated by the administration of U.S. president Donald Trump, but it owes its existence to a specific set of economic circumstances. President Trump has often used the phrase “America First” from the very beginning of his first presidential election campaign. He has argued that many trade partners have hurt the United States through trade, and has been especially critical of trade deficits. He repeatedly heaped scorn on trade agreements exacerbating the merchandise trade deficit and had pledged to rectify the situation as a presidential candidate. External economic policies implemented since Trump took office are realizing his promises. Those policies differ but share one commonality: they protect jobs and intellectual property rights in the United States. |
| Keywords: | manufacturing; employment; manufacturing employment; intellectual property; tariffs |
| JEL: | F13 F18 |
| Date: | 2023–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kieter:2019_020&r=cna |
| By: | Lee, Sang Hyun (Korea Institute for Industrial Economics and Trade) |
| Abstract: | The emergence of manufacturing related services (MRS) coincides with the revaluation of manufacturing. We observed that manufacturing-focused countries overcame the financial crisis which broke out in 2007 with less difficulty than their service-focused counterparts. Manufacturing played a crucial role in navigating the economic problems such as unemployment, polarization and stagnant growth and so on. Moreover, this pattern of positive impacts from the manufacturing sector was observed from European countries trying to boost their economy. Germany, a manufacturing-driven economy, showed continuous economic growth, while service-driven economies in Greece and Austria experienced recession. This work reevaluates the importance of manufacturing. |
| Keywords: | manufacturing; service; MRS |
| JEL: | L60 L80 O11 |
| Date: | 2023–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kieter:2019_024&r=cna |
| By: | Taha Choukhmane (MIT Sloan - Sloan School of Management - MIT - Massachusetts Institute of Technology, NBER - National Bureau of Economic Research [New York] - NBER - The National Bureau of Economic Research); Nicolas Coeurdacier (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR); Keyu Jin (LSE - London School of Economics and Political Science) |
| Abstract: | We investigate whether the 'one-child policy' has contributed to the rise in China's household saving rate and human capital in recent decades. In a life-cycle model with intergenerational transfers and human capital accumulation, fertility restrictions lower expected old-age support coming from children-inducing parents to raise saving and education investment in their offspring. Quantitatively, the policy can account for at least 30% of the rise in aggregate saving. Using the birth of twins under the policy as an empirical out-of-sample check to the theory, we find that quantitative estimates on saving and education decisions line up well with micro-data. |
| Keywords: | Life Cycle saving, Fertility, Human Capital, Intergenerational Transfers |
| Date: | 2023–01–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:spmain:hal-03915301&r=cna |
| By: | Park, Sohee (Korea Institute for Industrial Economics and Trade) |
| Abstract: | As action to respond to the climate crisis galvanizes globally, carbon neutrality, the circular economy and sustainable development are emerging as key concepts for structural socioeconomic transformation. Countries around the world, led by Europe, are now establishing policies and related institutions for carbon neutrality. In pursuing carbon neutrality — which refers to zero net carbon emissions — countries around the world are considering ways to offset greenhouse gas (GHG) emissions by using carbon sinks such as forests and carbon capture, utilization and storage (CCUS) technologies, while reducing greenhouse gas emissions from human activity as much as possible. Each country’s carbon neutrality policies contain a core vision, along with more specific goals, strategies, and implementation plans for carbon neutrality. This work identifies the implications for the Korean response to the challenges described previously and for the promotion of carbon neutrality policies by comparing the Korean and Chinese strategies. This study first examines the current status of carbon neutrality policy promotion in Korea and China, and then draws implications for the promotion of carbon neutrality policy in Korea through a comparative analysis of core carbon neutrality policy case studies in the two countries. |
| Keywords: | carbon neutrality; net-zero emissions; net-zero; carbon neutrality policy; China; Korea; emissions; carbon emissions; environmental policy; industrial policy; greenhouse gases; GHGs; greenhouse gas emissions; GHG emissions; carbon capture utilization and storage; CCUS |
| JEL: | Q01 Q56 |
| Date: | 2022–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kieter:2022_014&r=cna |
| By: | Dan Zhang (CUP - China University of Petroleum Beijing, IFPEN - IFP Energies nouvelles - IFPEN - IFP Energies nouvelles, IFP School); Arash Farnoosh (IFPEN - IFP Energies nouvelles - IFPEN - IFP Energies nouvelles, IFP School); Zhengwei Ma (CUP - China University of Petroleum Beijing) |
| Abstract: | Based on the examination of price discovery between Shanghai crude oil futures and the spot market, this paper explores whether the introduction of Shanghai crude oil futures can play a stabilizing role in the spot market, alleviating the impact of the financial cycle risk on the crude oil market from March 2018 to December 2019. The results show that there is only a uni-directional relationship of the spot price to futures price, and spot plays a leading role in price discovery. The risk of the financial cycle will increase the volatility of spot price, and the introduction of crude oil futures market can increase the impact of the financial cycle on the spot market. The additional research on the microcosmic mechanism of Shanghai crude oil futures indicates that crude oil futures market mainly influences the spot market fluctuation through the behaviour of traders: speculation increases price volatility in the spot market, which is more pronounced in the high volatility of the financial cycle as oppose to hedging transaction. |
| Keywords: | Shanghai crude oil futures, Price discovery, Stabilization, Financial cycle |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03910474&r=cna |