nep-cna New Economics Papers
on China
Issue of 2023‒04‒17
eight papers chosen by
Zheng Fang
Ohio State University

  1. China's Green Transition Policies and Its Implications for Korea By Choi, Won Seok
  2. Who stands on the shoulders of Chinese (scientific) giants? Evidence from chemistry By Pierre Azoulay; Shumin Qiu; Claudia Steinwender
  3. Age at marriage and marital stability: evidence from China By Garcia Hombrados, Jorge; Özcan, Berkay
  4. Big tech credit and monetary policy transmission: micro-level evidence from China By Yiping Huang; Xiang Li; Han Qiu; Changhua Yu
  5. Mitigation pathway of domestic mixed environmental taxes and the effects of trade restrictions on air pollution mitigation in China By Hu, Xiurong; Liu, Junfeng
  6. Technological Capability Strength/Asymmetry and Supply Chain Process Innovation: The Contingent Roles of Institutional Environments in China By Liwen Wang; Jin Jason Lu; Kevin Zhou
  7. Racing to the bottom or seeking legitimacy? National environmental performance and the location strategies of Chinese MNEs By Ascani, Andrea; Nair, Lakshmi Balachandran; Iammarino, Simona
  8. The impact of EU’s Carbon Border Adjustment Mechanism on Chinas economy By He, Jianwu; Li, Shantong

    Abstract: In China, carbon emissions from the energy and heat producing sector account for 53.4% of total emissions, with industry (28.6%) and transportation (8.9%) being the main carbon emission sectors. Therefore, various green transition policies in energy, industry and transportation are being pursued in Chinese cities. In Chinese cities, the promotion of rooftop-distributed photovoltaic power generation, among renewable energy sources, is evaluated to be capable of intensive development, reducing power peak load, and inducing residents to consume green energy. Policies are being implemented in urban industries to reduce pollution and carbon emissions, increase energy use efficiency, improve resource use levels, and improve green manufacturing systems. In the transportation sector, China's policies to reduce emissions, expand the supply of new energy vehicles, and strengthen green transportation technology are representative. Consequently, this study summarizes the policy implications, areas of Korea-China cooperation, and risk factors of China's green transition promotion plan for its Chinese cities.
    Keywords: China; Green Transition Policies; Urban Development
    Date: 2023–02–16
  2. By: Pierre Azoulay; Shumin Qiu; Claudia Steinwender
    Abstract: In recent decades, Chinese researchers have become preeminent contributors to the scientific enterprise, as reflected by the number of publications originating from Chinese research institutions. China's rise in science has the potential to push forward the global frontier, but mere production of knowledge does not guarantee that others are able to build on it. In this manuscript, we study how fertile Chinese research is, as measured by citations. Using publication and citation data for elite Chemistry researchers, we show that Chinese authored articles receive only half the citations from the US compared to articles from other countries. We show that even after carefully controlling for the "quality" of Chinese research, Chinese PIs' articles receive 28% fewer citations from US researchers. Our results imply that US researchers do not build as readily on the work of Chinese researchers, relative to the work of other foreign scientists, even in a setting where Chinese scientists have long excelled.
    Keywords: research and development, international spillovers, economics of science, citations, patent citations
    Date: 2023–03–13
  3. By: Garcia Hombrados, Jorge; Özcan, Berkay
    Abstract: Many studies showed that marrying younger is associated with a higher risk of divorce. We investigate the causal effect of marrying at an earlier age on women’s divorce risk. We exploit the introduction of the 1981 reform in China, which facilitated legal marriage for urban women younger than 25 years old, using the Chinese Census data. We show that the reform generated a kink in the mean age at marriage for women, which we use in a fuzzy regression kink design (RKD) to assess the causal effect of marrying younger on the probability of divorce. First, we confirm in our data the existence of a negative (in fact, a U-shaped) association between age at marriage and divorce, as commonly observed in previous studies from the USA. Then, we show that this association disappears in our analyses based on RKD. This finding suggests that the well-documented association between early marriage and divorce is in fact attributable to unobservable factors driving both marriage timing and the likelihood of divorce. We discuss the implications.
    Keywords: age at marriage; divorce; Regression Kink Design (RKD); China; 336475; Springer deal
    JEL: J12
    Date: 2023–03–15
  4. By: Yiping Huang; Xiang Li; Han Qiu; Changhua Yu
    Abstract: This paper studies monetary policy transmission through BigTech and traditional banks. By comparing business loans made by a BigTech bank with those made by traditional banks, it finds that BigTech credit amplifies monetary policy transmission mainly through the extensive margin. Specifically, the BigTech bank is more likely to grant credit to new borrowers compared with conventional banks in response to expansionary monetary policy. The BigTech bank's advantages in information, monitoring, and risk management are the potential mechanisms. In addition, the usage of BigTech credit is associated with a stronger response of firms' sales in response to monetary policy.
    Keywords: financial technology, monetary policy transmission, bank lending
    JEL: G21 E52 G23
    Date: 2023–03
  5. By: Hu, Xiurong; Liu, Junfeng
    Abstract: China’s environmental protection tax (EPT) has been implemented since the beginning of 2018 to conquer the severe air pollution problems. Meanwhile, carbon tax (CAT) has been approved as the most effective way on climate mitigation. However, the combined effects across different environmental taxes on emission reduction have not been comprehensively characterized. Besides environmental taxes, changes in trade policy between countries may also influence pollution emissions, which also needs a deeper investigation. In order to provide insights for decision-making on air pollution mitigation under an uncertain worldwide trade policy, we simulated the effects of the combinations of EPT and CAP changes on air pollutants emissions and economic activities. Utilizing a multiple-province computable general equilibrium (CGE) model, we quantify the emissions changes resulting from the individual or mixed policy components: including variating EPT from 2yuan per kilogram emissions to12yuan/kg, CAT from 50yuan per tonne CO2 emissions to 300yuan/tonne. Our results show that although CAP policy may result in greater emission reductions than that of the EPT, the EPT policy is more cost-effective to the CAP policy. Besides, CAP is most redundant to the EPT, while the EPT is complementary to a CAP policy. On province level, in most provinces, carbon pricing could increase the air pollution mitigation but also strengthen the burden of GDP at the same time, while Heilongjiang, Tianjin, Jiangsu, Hainan, Guangxi and Jiangxi provinces could result in air pollution reduction and GDP increase. Provincial distribution is vital for regional equality. We suggest to introduce relative smaller tax rate on provinces who suffer large GDP loss, or provide subsidies to these provinces.
    Keywords: Environmental Economics and Policy, International Relations/Trade
    Date: 2022
  6. By: Liwen Wang (SAFTI - Shenzhen Audencia Financial Technology Institute); Jin Jason Lu; Kevin Zhou
    Abstract: Despite the importance of process innovation in fostering supply chain competitiveness, existing studies primarily emphasize product innovation and overlook institutional environments. This study builds on the dyadic capability-based view and institutional theory to investigate how buyer's and supplier's technological capabilities jointly affect supply chain process innovation in China. We differentiate between two distinct dimensions, technological capability strength and technological capability asymmetry, and propose that technological capability strength negatively influences supply chain process innovation whereas technological capability asymmetry promotes such innovation. We also examine how formal (i.e., government intervention) and informal (i.e., guanxi importance) institutional factors moderate the effects of technological capability strength and asymmetry on supply chain process innovation. Empirical analyses based on 157 buyer-supplier dyads in China offer strong support for our hypotheses, which provide important implications for the supply chain innovation collaboration literature and managerial practice.
    Keywords: Supply chain process innovation, technological capability strength, technological capability asymmetry, government intervention, guanxi importance, buyer-supplier exchanges
    Date: 2023–01–05
  7. By: Ascani, Andrea; Nair, Lakshmi Balachandran; Iammarino, Simona
    Abstract: This paper studies the extent to which the international location patterns of Chinese MNEs privilege economies with environmentally sustainable practices. We develop a theoretical framework confronting the traditional race-to-the-bottom arguments with the Chinese MNEs' need to gain legitimacy abroad and signal their global citizenship. We also examine a set of conditioning factors pertaining to the heterogeneity of both host countries and firms, to explore potential sources of ethical pluralism in Chinese MNEs' location strategies. Empirically, we study 948 greenfield investments in manufacturing undertaken by Chinese companies in 82 countries over the 2013–2019 period. Our results suggest that Chinese MNEs may feed a downward spiral by favouring locations with fragile ecosystem vitality, that is, a weak sustainable use of natural resources with the consequent erosion of environmental quality. This result is driven by Chinese FDI in developing countries and locations with fragile institutional setting. Furthermore, the attracting force of a degraded environmental situation holds especially for Chinese MNEs operating in most polluting sectors and with private ownership.
    Keywords: Chinese outward foreign direct investment (Chinese OFDI); emerging countries' multinationals (EMNEs); environment; legitimacy; location strategies; NWO-Innovational Research Incentives Scheme Veni SSH 2018 [Grant N. 016.Veni.195.085]
    JEL: J50 F3 G3
    Date: 2023–04–01
  8. By: He, Jianwu; Li, Shantong
    Abstract: In 2021, the EU announced a detailed proposal for the "Carbon Border Adjustment Mechanism (CBAM)". The EU is China's second largest export market, and the carbon emission intensity of China's export products is significantly higher than that of many other countries. Therefore, it is necessary to analyze the impact of the carbon border adjustment mechanism on China's economy. In order to assess the macro-economic impacts of the CBAM, this study will use ENVISAGE model. In this paper the model covers 16 countries and regions, and 27 sectors. The ENVISAGE model is used to compare CBAM policy against a baseline scenario (without CBAM), and the difference represents the impact of CBAM on the global economy. As for the uncertainties, two scenarios of CBAM are designed to analyze the impacts of CBAM. The first is the partial scenario, that is, the scenario in which both the coverage of product and the embedded carbon emission are narrow. The second is the comprehensive scenario, that is, the CBAM will cover all primary products and industrial products, and the carbon emissions of products include both direct and indirect carbon emissions. This report calculated the carbon emissions of products (incl. direct and indirect carbon emission) for 15 countries and regions based on the GTAP 11 database, and then calculated the carbon tariffs in the two scenarios based on product coverage and the difference of carbon price between the EU and other countries and regions. The carbon tariffs will be feed into the ENVISAGE model to simulate the economic impacts of the CBAM scenarios. The results of the simulation show that if the carbon border adjustment mechanism is limited to five types of products such as steel, cement, fertilizer, aluminum and electricity, its impact on China will be very limited; and once the carbon border adjustment mechanism is fully implemented, it will lead to a loss of GDP by 0.64% and about 2.3 million manufacturing jobs in China in the short term.
    Keywords: Environmental Economics and Policy
    Date: 2022

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