|
on China |
| By: | Tianlei Huang (Peterson Institute for International Economics) |
| Abstract: | This working paper reviews the current housing crisis in China and explores the roles of supply-demand imbalances and local governments in the real estate sector. To prevent the housing downturn from further dragging down economic growth, Beijing suspended the financing restrictions on developers imposed in August 2020. These restrictions, known as the "three red lines" that limited new borrowing by developers, led Chinese property developers to default on a record number of debt obligations and triggered the most serious housing slump China has seen since 1998. The property sector saw its value added decline by more than 5 percent in 2022, even as the overall economy grew at 3 percent. But the current dynamics in the housing market reflect a repeated pattern: Loosening financing restrictions on developers and using housing as a macroeconomic stabilization tool risk reinforcing the boom-bust housing cycle. China's real estate sector is a systemic problem. Without serious reforms to address concerns such as supply-demand imbalances and local governments' deep connections with real estate, housing slumps like the one in 2022 may recur |
| Keywords: | China, Real Estate, Land Policy, Local Governments, Property Tax |
| JEL: | H27 H72 N25 R31 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:iie:wpaper:wp23-5&r=cna |
| By: | Qingnan Xie; Richard B. Freeman |
| Abstract: | The close connection between US and China in scientific research and education in the 2000s produced a large group of China-born researchers who work in the US (“diaspora”) and a larger group of China-born researchers who gained US-research experience and returned to do their research in China (“returnee”). Analyzing 2018 Scopus data on research papers, we estimate that diaspora researchers contributed to 27% of US addressed papers, and that returnee researchers contributed to 38% of China addressed papers. Both the number of papers with diaspora authors and the number of papers with returnee authors far exceeded the usual measure of US-China collaborative work, papers with both US and China addresses. In terms of quality or impact, papers with diaspora or returnee authors averaged more citations and had higher proportions of publication in high CiteScore journals than other US-addressed or China-addressed papers. Finally, papers with diaspora and/or returnee authors were at the center of the US-China coauthor network and major conduits of research findings between the countries in the network of scientific citations. The benefits of the US-China research connection notwithstanding, the link between the countries’ research began to fray from 2018 through the early 2020s, with potential deleterious effects on each country’s future research output and on global science writ large to which US and China are the two biggest contributors. |
| JEL: | F1 F22 F63 I2 I20 J2 J20 J3 J30 O3 O30 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31306&r=cna |
| By: | Tabuchi, Takatoshi; Wang, Congcong; Zhu, Xiwei |
| Abstract: | We present a model of Chinese growth in a two-country economy with the manufacturing and natural resource sectors to analyze the impacts of the reform and opening-up policy, which promotes free trade and technological progress, on the net capital flows, net export, and social welfare. We show that manufacturing capital in China initially decreased before increasing. This corresponds with the fact that China was a net importer of manufactured goods initially and became a net exporter recently. These results are consistent with the data obtained after the reform and opening-up policy in 1978. |
| Keywords: | trade liberalization; technological progress; the reform and opening-up policy; deindustrialization; home market effect. |
| JEL: | F12 O11 R12 |
| Date: | 2023–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:117634&r=cna |
| By: | Chae, Minhee (Nankai University); Meng, Xin (Australian National University); Xue, Sen (Jinan University) |
| Abstract: | This study examines the relationship between fertility decline and the reversal/narrowing of the gender gap in literacy/numeracy test scores. Drawing on Becker's Quantity-Quality (Q-Q) trade-off model, we propose that in a society such as China, where son-preference is prevalent, the Q-Q trade-off would be larger for daughters than that for sons. An exogenous reduction of fertility would make girls more likely to live in a single-sex family, which in turn increases the share of human capital investment for girls. We test this empirically. To consider the endogenous nature of the demand for children, we exploit an exogenous variation in fertility due to China's family planning policy. Utilising the policy intensity information collected from hundreds of county gazetteers to construct a novel instrument for fertility, we find that a reduction in one sibling narrows the gender gap in numeracy and literacy test scores by 14.8% and 21.4% of a standard deviation in the rural sample and 4.0% and 6.5% in the urban sample. The pattern is more pronounced in regions with a higher proportion of people who prefer a son over a daughter. We also provide suggestive evidence that the channel of the effect is indeed largely through the increased probability of girls living in single-sex families. |
| Keywords: | gender gap, family size, test scores |
| JEL: | J13 J16 I24 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16208&r=cna |
| By: | Flavia Corneli (Bank of Italy); Fabrizio Ferriani (Bank of Italy); Andrea Gazzani (Bank of Italy) |
| Abstract: | China has become a major player in the global economy. Our new and original database of Chinese macroeconomic surprises shows the significant impact they have on equity markets worldwide. These surprises also affect commodity prices, the US nominal effective exchange rate and the VIX Index. Finally, we establish that positive Chinese macroeconomic news is associated with the expansion of global trade and industrial production. Overall, we provide evidence of the growing role of the Chinese economy as a driving force for both the real and the financial global cycle. |
| Keywords: | global financial cycle, China macroeconomic announcements, international spillovers, commodity prices |
| JEL: | E44 F21 F40 G15 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_772_23&r=cna |
| By: | Cho, Eun Kyo (Korea Institute for Industrial Economics and Trade); Shim, Woojung (Korea Institute for Industrial Economics and Trade) |
| Abstract: | In 2022 the US Congress passed the Inflation Reduction Act (IRA). This law aims to reduce American dependency on Chinese batteries and reorder the global supply chain in America’s favor by excluding electric vehicles containing any minerals, materials, or parts sourced from China from federal new car subsidies. In response, China has launched a strategy to strengthen its secondary battery supply chain, leveraging its superiority in all aspects of the chain, including raw materials procurement and cell manufacturing. China’s strategy rests on three core pillars: 1) Internalizing or localizing advanced technologies, 2) globalizing China’s supply chain and increasing investment abroad, and 3) reinforcing the security of its supply chains of raw materials, particularly the supply chains for core minerals. For now, the intensifying US-China rivalry and growing divide in the global supply chain of secondary battery industries presents new opportunities for the Korean battery industry. However, China is determined to bolster its battery technologies and continue to invest abroad; this poses substantial challenges to the Korean battery industry. The Korean secondary battery industry now stands at a crossroads of risks and opportunities, brought about by the widening gaps in the global supply chain and China’s strategy to supercharge its battery industry. Korean policymakers must work to maintain Korea’s technologically superior position by investing in advanced battery research and by establishing a technological alliance with Japan, Germany, and the United States. Korea must also diversify its core minerals supply chains through using the Indo-Pacific Economic Framework, and increase its shares in European, Southeast Asian, and other markets worldwide. It should also look to cooperate with China where possible in order to secure an edge over competitors in emerging markets. |
| Keywords: | batteries; secondary batteries; energy storage solutions; US-China rivalry; technology hegemony; economic security; supply chains; technology localization; raw materials; industrial competition; technology competition; US; China; Korea |
| JEL: | F51 F52 F62 L60 L65 L72 L78 Q02 Q34 |
| Date: | 2023–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kietrp:2023_001&r=cna |
| By: | Shi, Song (School of Built Environment, University of Technology Sydney. Australia); Wu, Shuping (School of Economics and Management, Beijing Jiaotong University, Beijing. China.); Yang, Zan (Department of Real Estate and Construction Management, Royal Institute of Technology) |
| Abstract: | The aim of this study is to examine the investment behaviour of Hong Kong-based real estate firms in Mainland China. In particular, this research examines how the competitiveness of Hong Kong developers evolved from initial success to subsequent decline in an emerging and potentially lucrative real estate market in China following the economic reforms of the early 2000s. This study uses a dataset of 305 firm-year observations from 2005 to 2015 and applies ordinary least square regression analysis. The study sample is based on real estate firms headquartered in Hong Kong and publicly listed on the Hong Kong Stock Exchange. It is found that there is a significant positive association between the competitive advantage of Hong Kong-based real estate firms and their out-of-town investment activities in Mainland China. Furthermore, there was a notable decline in land purchase activities among HK-based developers after the initial period of growth, with a shift from super cities to other lower-tiered cities. |
| Keywords: | growth options; investment activities; investment distance; real estate developments; location choices; Hong Kong developers |
| JEL: | D22 F21 G11 |
| Date: | 2023–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:kthrec:2023_008&r=cna |
| By: | Carry, Inga; Godehardt, Nadine; Müller, Melanie |
| Abstract: | When it comes to being supplied with raw materials, Europe faces a number of challenges. These include the diversification of European supply chains, the implementation of effective sustainability standards, and the reduction of strategic dependencies on China. What will European-Chinese raw material supply chains look like in 2030? This paper outlines three possible scenarios, illustrating the combined effects of different political and socio-economic developments and the impact they could have on European-Chinese supply chains. It aims to help political actors gain a deeper understanding of possible future trajectories and map out appropriate policy strategies in response to different scenarios. |
| Keywords: | raw materials, diversification of European supply chains, effective sustainability standards, reduction of strategic dependencies on China, Sustainability Due Diligence Directive |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:swpcom:272023&r=cna |
| By: | Yangtian Jiang (Institute of New Structural Economics, Peking University, Beijing, China.); Yu Zheng (School of Economics and Finance, Queen Mary University of Lon-don. Mile End Road, E1 4NS London, UK.); Lijun Zhu (Institute of New Structural Economics, Peking University, Beijing, China.) |
| Abstract: | We propose a quantitative theory of wealth creation and distribution during China’s transitional growth from the early 1990s, when barriers to setting up private businesses, trading housing, and migrating from rural to urban areas are struck down. In response to the changing economic environment, a small entrepreneurial class emerges and accumulates substantial wealth, whereas the majority working class, partly due to limited investment available from an underdeveloped financial sector, uses housing as the main vehicle of wealth accumulation over the course of a long-time housing boom. Our heterogeneous-agent dynamic equilibrium framework determines growth and equity jointly. We show a reasonably calibrated version of the model matches the rise in urban China’s wealth inequality since 1995 almost exactly. We further quantify the relative contribution of different reform measures to the rising inequality and discuss the welfare implications taking into account possible growth-equity trade-offs. |
| Keywords: | Wealth inequality, Capital accumulation, Entrepreneurship, Housing, Migration |
| JEL: | E21 O11 O16 O18 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:955&r=cna |
| By: | Liu, Zhen; Kornher, Lukas; Qaim, Matin |
| Abstract: | In many developing countries, food environments are changing rapidly. One emblematic trend is the proliferation of supermarkets and other modern retailers. While changing food environments likely influence the types of foods supplied and consumed, research on the implications for people’s diets and nutrition is still scant. Here, we analyze the effects of supermarkets on child diets and nutrition in China. We use nationally representative panel data that include information on households’ access to supermarkets and individual-level anthropometric and dietary indicators. Results show that improved access to supermarkets leads to higher child dietary diversity and nutrient intakes, especially among children in rural areas and from low-income households. Supermarkets are also found to increase child height, but not weight. Estimates with different model specifications and placebo tests confirm the results’ robustness. The effects are mediated through supermarkets contributing to more variety in local food supplies and lower average food prices. Our findings suggest that the spread of supermarkets improves child dietary quality and nutrition in China. |
| Keywords: | Food Consumption/Nutrition/Food Safety |
| Date: | 2023–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ubzefd:335389&r=cna |
| By: | Helu Jiang (Institute for Advanced Research, Shanghai University of Finance and Economics. 111 Wuchuan Road, Shanghai, China, 200433.); Yu Zheng (Queen Mary University of London and CEPR); Lijun Zhu (Peking University) |
| Abstract: | We use China’s growth experience as a laboratory to study how reductions in entry barrier contribute to economic growth by inducing a more competitive market structure. The removal of entry restrictions on private firms in the late 1990s and early 2000s made the Chinese economy more competitive and dynamic, propelling the growth acceleration from the early 1990s to late 2000s. We develop a model of endogenous productivity and market structure with heterogeneous firms and frictional entry and calibrate it to Chinese manufacturing from 2004-7. We show about 25% of the productivity growth in 2004-7 is contributed by the reduction of entry barriers during the reforms in the previous decade. While close to 40% of the gain in growth comes from entry bringing about younger firms with higher growth potential, over 60% of the gain in growth comes from entry enforcing tighter market competition which strengthens all active firms’ incentive to grow. We also provide suggestive evidence that this mechanism may be at play in a wider economic context. |
| Keywords: | Entry Barriers; Firm Dynamics; Market Structure; Endogenous Growth |
| JEL: | D22 D43 O11 O30 O47 |
| Date: | 2023–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:956&r=cna |
| By: | Jung, Jihyun (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Sung, Hankyoung (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Kim, Hongwon (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Lee, Hanna (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Kim, Joo Hye (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Park, Hea Ji (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | 본 보고서는 ‘2060년 탄소중립 달성’을 선언한 중국의 탄소저감전략과 탄소가격정책의 특징을 살펴보고, 중국의 탄소가격정책이 중국 산업과 한중 경제관계에 미치는 영향을 정량적으로 분석하였다. 이를 통해 중국의 탄소가격정책으로 인한 산업 생산 및 비용의 변화, 한국의 수출경쟁력 및 대중국 수입·투자의 변화 등을 파악하였으며, 중국 탄소저감정책 관련 수입 공급망 리스크 대응 및 중국과의 협력 분야 모색 등에 대한 시사점을 도출하였다. China’s “carbon neutral clock” has been speeding up since pivoting from its original skepticism regarding developing countries’ obligations to reduce emissions, internationally declaring in 2020 its vision of bringing carbon emissions to a peak in 2030 and achieving carbon neutrality by 2060. As a developing economy that emits the largest amount of carbon in the world, China’s declaration of carbon neutrality ahead of Korea, the United States, and Japan was praised as a “historic event” adding momentum to the vision of carbon neutrality proposed by the EU, as well as certain doubts over the plausibility of this declaration. However, South Korea, which is highly dependent on China’s economy, experienced an unintended supply chain shock during the so-called “urea water crisis, ” and has come to realize the potential ripple effects caused by China’s accelerated “carbon neutral clock.” This study began with the question of and concern over how China’s carbon neutrality policy will affect not only China but also Korea. Leaving for the future a quantitative impact analysis on the entire carbon neutrality policy accompanied by economic and social transformation, this study chose to analyze the impact of China’s carbon price policy, as the first among developing countries to start a national emissions trading system (ETS). In Chapter 2, following a review of China’s carbon reduction strategy, the development process and characteristics of carbon price policy were analyzed. Aiming to meet its mid- to long-term growth target for 2035 (first stage goal of socialist modernization, doubling GDP from 2020), China has designated the target period for carbon emission peaking and achieving carbon neutrality. It plans to reduce carbon emission intensity (emission to GDP) rather than total carbon emission by 2030, the target year for carbon emission peaking, and its strategy is to reduce total carbon emission quickly by 2060 after reaching the mid- to long-term growth target in 2035. Accordingly, in the short term, it plans to control production in high-emission (i.e. high-pollution) industries to quickly reduce emissions.(the rest omitted) |
| Keywords: | Chinas carbon neutrality; carbon pricing policy; supply chain; low-carbon/eco-friendly; Korea-China economic relations |
| Date: | 2022–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kieppa:2022_025&r=cna |
| By: | Kyung, Heekwon (Korea Institute for Industrial Economics and Trade) |
| Abstract: | The escalating hegemonic rivalry between the United States and China will exert profound, long-term impacts on the global geopolitical landscape as well as South Korea’s strategic industries. This report examines the implications for policy carried by these political developments for semiconductors, future cars, and biopharmaceuticals — Korea’s three key strategic industries — based on input from 45 experts. The suggestions for policy will seek to establish an advantage for Korean industries that they might leverage to dominate the global competition. The semiconductor industry will require robust government support to maintain and strengthen its advanced manufacturing base, while the future car industry will need government support to flexibly and rapidly adapt to changes in the industrial ecosystem and develop world-class software service platforms. The biopharmaceutical industry will require support to develop innovative new products both in Korea and abroad and enhance its manufacturing competitiveness in the face of new risks and opportunities presented by geopolitics and an evolving demand structure. Other important manufacturing industries in Korea, such as shipbuilding, steel, communication equipment, electronic appliances (the Internet of Things), and displays, will also require a prompt and strategic policy response to meet the challenges and take advantage of opportunities being ushered in by a political environment in flux and rapidly changing market conditions. |
| Keywords: | US-China rivalry; economic security; economic nationalism; protectionism; economic blocs; geopolitical risk; semiconductors; chips; software; steel; IoT; displays; telecommunications; manufacturing; exports; trade; Korea |
| JEL: | F13 F50 F51 F52 F55 H56 |
| Date: | 2023–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kietrp:2023_003&r=cna |