nep-cna New Economics Papers
on China
Issue of 2023‒03‒13
seven papers chosen by
Zheng Fang
Ohio State University

  1. Social preferences before and after the onset of the COVID-19 pandemic in China By King King Li; Ying-Yi Hong; Bo Huang; Tony Tam
  2. Do Pension Benefits Accelerate Cognitive Decline? Evidence from Rural China By Plamen Nikolov; Md Shahadath Hossain
  3. Cognitive Misperception and Chronic Disease Awareness: Evidence from Blood Biomarker Data By Lin, Zhuoer; Fu, Mingqi; Chen, Xi
  4. The Quality of Society and Happiness: Fairness, Trust, and Community in China By John Knight; Ramani Gunatilaka
  5. People’s Republic of China: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the People’s Republic of China By International Monetary Fund
  6. Trade Policy Uncertainty, Offshoring, and the Environment: Evidence from US Manufacturing Establishments By Choi, Jaerim; Hyun, Jay; Kim, Gueyon; Park, Ziho
  7. The effect of Public Land Development on Implementation of Housing Plans By Babak Firoozi Fooladi; Heidi Falkenbach; Ploegmakers Huub

  1. By: King King Li (Shenzhen Audenica Financial Technology Institute); Ying-Yi Hong (Chinese University of Hong Kong - Partenaires INRAE); Bo Huang (Chinese University of Hong Kong - Partenaires INRAE); Tony Tam (Chinese University of Hong Kong - Partenaires INRAE)
    Abstract: This study compares Chinese people's trust and trustworthiness, risk attitude, and time preference before and after the onset of the COVID-19 pandemic in China. We compare the preferences of subjects in two online experiments with samples drawn from 31 provinces across mainland China before and after the onset of the pandemic. We test two competing hypotheses regarding trust and trustworthiness. On the one hand, the outbreak as a collective threat could enhance in-group cohesion and cooperation and thus increase trust and trustworthiness. On the other hand, to the extent that people expect their future income to decline, they may become more self-protective and self-controlled, and thus less trusting and trustworthy and more risk averse and patient. Comparing before and after the onset, we found that the subjects increased in trustworthiness. After the onset, trust and trustworthiness (and risk aversion and present bias too) were positively correlated with the COVID-19 prevalence rate in the provinces. Subjects with more pessimistic expectations about income change showed more risk aversion and lower discount rates, supporting the speculation concerning self-control.
    Keywords: COVID-19, trust, trustworthiness, social preference, risk attitude
    Date: 2022–11
  2. By: Plamen Nikolov (State University of New York); Md Shahadath Hossain (State University of New York at Binghamton)
    Abstract: Economists have mainly focused on human capital accumulation, rather than on the causes and consequences of human capital depreciation in late adulthood. To investigate how human capital depreciates over the life cycle, we examine how a newly introduced pension program, the National Rural Pension Scheme, affects cognitive performance in rural China. We find significant adverse effects of access to pension benefits on cognitive functioning among the elderly. We detect the most substantial impact of the program on delayed recall, a cognition measure linked to the onset of dementia. In terms of mechanisms, we find that cognitive deterioration in late adulthood is mediated by a substantial reduction in social engagement, volunteering, and activities fostering mental acuity.
    Keywords: life cycle, human capital, cognitive functioning, cognition, middle-income countries, LMICs, developing countries
    JEL: J24 H55 O15
    Date: 2023–02
  3. By: Lin, Zhuoer (Yale University); Fu, Mingqi (Wuhan University); Chen, Xi (Yale University)
    Abstract: Cognitive misperception contributed to poor decision-making; yet their impact on health-related decisions is less known. We examined how self-perceived memory was associated with chronic disease awareness among older Chinese adults. Data were obtained from the China Health and Retirement Longitudinal Study. Nationally representative blood biomarkers identify participants' dyslipidemia and diabetes status. Among participants with biomarker identified dyslipidemia or diabetes, disease awareness was defined as self-reported diagnosis of the conditions. The proportions of disease awareness were lower for individuals with better self-perceived memory and those with more impaired cognitive ability, showing opposite patterns. Controlling for cognitive ability and covariates, self-perceived memory was negatively associated with the dyslipidemia and diabetes awareness. In particular, older adults with the highest level of self-perceived memory had significantly lower disease awareness as compared to those with the lowest level of self-perceived memory. Our findings were robust to alternative cognitive measures and were stronger for less educated rural residents or those living without children. Cognitive misperception poses great challenges to chronic disease management. Targeted interventions and supports are needed, particularly for the disadvantaged.
    Keywords: cognitive impairment, self-perceived memory, chronic disease awareness, dyslipidemia, diabetes
    JEL: I12 J14 D91 I18
    Date: 2023–02
  4. By: John Knight; Ramani Gunatilaka
    Abstract: Adam Smith argued that ‘moral sentiments’ – the norms, customs and conventions that are developed in society - provide a benefit to society, improving both economic efficiency and well-being. We take our cue from this insight. Three important moral sentiments are a perception of fairness, a willingness to trust people, and a sense of community We analyse representative national socioeconomic surveys of the China Household Income Project (CHIP), conducted in 2002 and 2013. It contains information that is used to create a happiness score, a fairness score, a trust score, and a community score for each respondent. Three main hypotheses are tested: that higher reported fairness, higher reported trust, and greater sense of community each raises happiness. In the first case there is strong evidence of a positive association in both rural and urban China. Moreover, we find that a higher sense of fairness ameliorates the adverse effect of reference group income on happiness, especially for the poor. Higher reported trust scores are also strongly associated with greater happiness in both rural and urban China. Average trust scores in the locality are positively associated with happiness, suggesting that a high level of trustworthiness in the community is also valued. Three measures of village sense of community are each associated with greater happiness. Attempts are made to ascertain whether the associations are causal; use of internal instruments provides some support. The possible determinants of reported fairness, trust, and community are investigated, some of which have policy implications. The evidence of the paper is generally consistent with the broader argument that an informal social contract constrains antisocial behaviour and improves wellbeing in ways little studied by economists.
    Date: 2023–02–17
  5. By: International Monetary Fund
    Abstract: Following an impressive recovery from the initial impact of the pandemic, China’s growth has slowed significantly in 2022. It remains under pressure as more transmissible variants have led to recurring outbreaks that have dampened mobility, the real estate crisis remains unresolved, and global demand has slowed. Macroeconomic policies have been eased appropriately, but their effectiveness has been diminished by a focus on enterprises and increasingly less effective traditional infrastructure investment rather than support to households. The pandemic and its impacts have also been a setback to economic rebalancing toward private consumption and to reducing greenhouse gas emissions. A slowdown in growth-enhancing reforms against the backdrop of increasing geoeconomic fragmentation pressures stand in the way of a much-needed lift to productivity growth, weighing on China’s medium-term growth potential.
    Date: 2023–02–03
  6. By: Choi, Jaerim (University of Hawaii at Manoa); Hyun, Jay (HEC Montreal); Kim, Gueyon (University of California, Santa Cruz); Park, Ziho (National Taiwan University)
    Abstract: We study long-run environmental impacts of trade liberalization on US manufacturing by exploiting a plausibly exogenous reduction in US trade policy uncertainty: the conferral of Permanent Normal Trade Relations (PNTR) to China. Using detailed data on establishment-level pollution emissions and business characteristics - including trade activities and global subsidiary information - from 1997 to 2017, we show that establishments reduce toxic emissions in response to a reduction in trade policy uncertainty. Emission abatement is mainly driven by a decline in pollution emission intensity, and not by establishment exits or a reduction in production scale. Emission reduction is more pronounced for (i) establishments with foreign sourcing networks and (ii) those under more stringent environmental regulations. We provide further evidence that supports the pollution haven hypothesis whereby offshoring is central to the mechanism - US manufacturers begin to source from abroad and establish more subsidiaries in China after PNTR, especially those that emit pollutants heavily.
    Keywords: pollution haven hypothesis, toxics release inventory, pollution emissions, trade and environment, trade policy uncertainty, offshoring, particulate matter, PNTR
    JEL: Q53 Q56 F14 F18 F23
    Date: 2023–02
  7. By: Babak Firoozi Fooladi; Heidi Falkenbach; Ploegmakers Huub
    Abstract: Public Land Development (PLD) is an active form of land policy that is mainly used in the Netherlands, Finland, Sweden, and China. In PLD, the public authority buys the land in an area of interest, prepares the plan for the area, rearranges the plots, provides infrastructure, and sells the serviced plots to developers for development. Some literature suggests that PLD gives control over land supply, which may lead to more timely plan implementation. However, other work indicates that PLD may not offer better outcomes than other forms of land development policies in terms of timing of development and implementation of housing plans. In this context, the use of PLD as a significant public intervention in the land market is difficult to rationalize.In this paper, we focus our investigation on the impact of PLD on housing plan implementation. In addition, we investigate if PLD has any advantages compared to other forms of land development policies.Our empirical analysis focuses on the Netherlands. We construct a panel of approved housing plans in Dutch municipalities from 2010 to 2019 and estimate the impact of PLD on plan implementation using survival models.
    Keywords: Housing Supply; land development; Land Policy; plan implementation
    JEL: R3
    Date: 2022–01–01

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