nep-cna New Economics Papers
on China
Issue of 2023‒06‒12
seven papers chosen by
Zheng Fang
Ohio State University

  1. Assessing the dependency of Finland and the EU on Chinese imports By Kaaresvirta, Juuso; Kerola, Eeva; Nuutilainen, Riikka
  2. Structural transformation and international trade: Evidence from the China shock By Clément Nedoncelle; Julien Wolfersberger
  3. Early Childhood Conditions and Adolescent Mental Health By Erten, Bilge; Keskin, Pinar; Pinto, Rodrigo; Xie, Huihua; Zhu, Lianming
  4. Does extreme temperature exposure take a toll on mental health? Evidence from the China Health and Retirement Longitudinal Study By Chen, Yanran; Sun, Ruochen; Chen, Xi; Qin, Xuezheng
  5. US-China Decoupling Patterns in Supply Chains and Ecosystems for Semiconductors and AI technologies By Cho, Eun Kyo
  6. Access to Pensions, Old-Age Support, and Child Investment in the People’s Republic of China By Shan, Xiaoyue; Park, Albert
  7. Strategies of Multinational Companies Entering China in the Era of U.S.-China Competition and Implications for Korea By Hyun, Sang Baek; Moon, Ji Young; Park, Minsuk; Oh, Jonghyuk; Oh, Yun Mi

  1. By: Kaaresvirta, Juuso; Kerola, Eeva; Nuutilainen, Riikka
    Abstract: This policy brief provides an overview of Finland's dependency on imports from China in both a national and EU context. As trade figures based on value added only provide a rough notion of China's contribution to final consumption, we also consider import dependence from the goods imports figures of Finnish Customs to assess import dependence directly for specific product groups. As many products of Chinese origin are imported as semifinished goods or components for products finished in another EU country, we break down also the import dependency of the EU on China by specific product groups. We then compare Finland's domestic production of select industrial product groups against comparable imports from China. We analyze Finland's dependence on China for critical raw materials and identify potential alternative sources for key product groups for which Finland and the EU are currently dependent on China.
    Keywords: China, Finland, EU, foreign trade, imports, dependency
    Date: 2023
  2. By: Clément Nedoncelle; Julien Wolfersberger
    Abstract: How does international trade affect structural transformation in developing countries? We use data on sectoral allocation of labour and value-added in 46 developing economies over the period 1995-2017 and exploit for identification plausibly exogenous variation in manufacturing imports from China. We find that the so-called 'China shock' largely slows down the transformation of low- and middle-income economies out of agriculture. In our main specification industrialization decreases by 0.49 per cent on average for each additional per cent of manufacturing imports from China.
    Keywords: Developing countries, Industrialization, Structural transformation, Trade
    Date: 2023
  3. By: Erten, Bilge (Northeastern University); Keskin, Pinar (Wellesley College); Pinto, Rodrigo (University of California, Los Angeles); Xie, Huihua (Chinese University of Hong Kong); Zhu, Lianming (Osaka University)
    Abstract: We investigate how early life circumstances induced by trade liberalization affect adolescent mental health in China, exploiting variation in tariff uncertainty faced by prefecture economies pre-2001. Our model differs from the classic difference-indifferences design in that it considers a moderator variable determining the intensity with which the treatment affects the outcomes. Our findings show that children born in prefectures more exposed to an exogenous change in international trade policy experienced a significant decline in the incidence of severe depression during adolescence. We find that the estimated relationships are robust to controls for initial prefecture attributes and other policy changes. Improvements in parental income, early childhood investments, and care provision in formal early childhood education programs are likely operative channels of impact.
    Keywords: China, trade reform, mental health, early life investments
    JEL: F16 I15 J13 C21
    Date: 2023–04
  4. By: Chen, Yanran; Sun, Ruochen; Chen, Xi; Qin, Xuezheng
    Abstract: Long-term exposure to extreme temperatures could threaten individuals' mental health and psychological wellbeing. This study aims to investigate the long-term impact of cumulative exposure to extreme temperature. Differently from existing literature, we define extreme temperature exposure in relative terms based on local temperature patterns. Combining the China Health and Retirement Longitudinal Study and environmental data from the U.S. National Oceanic and Atmospheric Administration from 2011 to 2015, this study demonstrates that heat and cold exposure days in the past year significantly increase the measured depression level of adults over age 45 by 1.75 and 3.00 per cent, respectively, controlling for the city, year, and individual fixed effects. The effect is heterogeneous across three components of depression symptoms as well as age, gender, and areas of residency, and air conditioning and heating equipment are effective in alleviating the adverse impact of heat and cold exposure. The estimation is robust and consistent across a variety of temperature measurements and model modifications. Our findings provide evidence on the long-term and accumulative cost of extreme temperature to middle-aged and elderly human capital, contributing to the understanding of the social cost of climate change and the consequent health inequality.
    Keywords: mental health, climate change, extreme temperature, aging
    JEL: I12 I18 Q54
    Date: 2023
  5. By: Cho, Eun Kyo (Korea Institute for Industrial Economics and Trade)
    Abstract: The sharp confrontation between the US and China in high-tech industries continues. Securing and protecting the competitiveness of advanced technologies such as semiconductors and artificial intelligence (AI) are emerging as key issues in external economic security, and the US government continues to check technologies in China through various means. In addition, the US has recently strengthened direct technical sanctions on China, and these have taken the form of export controls and investment restrictions, and has sought to check China through technological cooperation with US allies, as well. These sanctions against China and tech alliances with allies are likely to lead to an anti-globalization “blocification” that severs and separates high-tech supply chains, technologies, market ecosystems, and standards into two separate, opposed camps. Korea, which is highly dependent on the external economy in the high-tech sector, needs to be able to respond to a situation in which supply chains, technologies, standards, markets, and ecosystems of the US and China reside in separate blocs for a considerable period of time to come. This study analyzes the emerging supply chain blocs of both the US and China, in terms of technologies and ecosystems, focusing on the semiconductor and AI. It identifies the implications for industry carried by the analysis, and describes prospects for future developments.
    Keywords: high-tech industries; high-tech competition; economic security; US-China conflict; semiconductors; artificial intelligence; trade conflict; technological cooperation; technological alliances; blocification; Korea
    JEL: F50 F51 F52 F59 F69 H56
    Date: 2023–04–27
  6. By: Shan, Xiaoyue (University of Pennsylvania); Park, Albert (Asian Development Bank)
    Abstract: This paper studies how access to public pensions affects old-age support and child investment in traditional societies. Guided by predictions from an overlapping generations model, we analyze the influences of a new pension program in rural People’s Republic of China, using a difference-in-differences approach. We find that the program crowds out transfers from working-age adults, especially men, to their elderly parents. Interestingly, the impact on child investment significantly differs by child gender. While adult parents increase educational investment in sons, their investment in daughters appears to decrease. Our findings highlight the unintended consequences of public pensions on parental investment.
    Keywords: altruism; pension; old-age support; rural PRC; intergenerational transfers
    JEL: D64 H55 J14 J16
    Date: 2023–05–12
    Abstract: With the integration of resources and markets around the world sparked by the trend of globalization, multinational companies have continued to grow at a rapid pace. In particular, global manufacturers have maintained their competitiveness by distributing resources more efficiently while establishing a global value chain with China as their main production hub. However, measures taken by the U.S. to block China’s access to technology and supply chains in some high-tech industries have prompted discussions on reorganization of the global supply chain, placing these multinational companies in an uncertain situation concerning their operations in China. At a time when competition between the U.S. and China is intensifying, it is necessary to look at the response strategies of global companies that have entered China and seek effective countermeasures for Korean companies.
    Keywords: China; Multinational Companies; U.S.-China Competition
    Date: 2023–03–03

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