nep-cna New Economics Papers
on China
Issue of 2024‒01‒15
twelve papers chosen by
Zheng Fang, Ohio State University

  1. China's development co-operation By Rolf Schwartz
  2. The Hukou System and Wage Gap between Urban and Rural Migrant Workers in China : A Meta-Analysis By MA, Xinxin; LI, Yalan; IWASAKI, Ichiro
  3. China’s Meat Consumption: Growth Potential By Gale, Fred; Dong, Fengxia
  4. Assessing the Impact and Implications of US Outbound Investment Screening on China: A Korean Perspective By Cho, Jaehan; Cho, Eun Kyo; Kyung, Heewon; Choi, Mincheol; Kim, Yong; Kim, Hanhin
  5. On the Time-Varying Impact of China’s Bilateral Political Relations on Its Trading Partners (1960-2022) By António Afonso; Valérie Mignon; Jamel Saadaoui
  6. The Impact of Trade Unions on the Gender Wage Gap : Evidence from China By MA, Xinxin; CHENG, Jie
  7. Can scientists remain internationally visible after the return to their home country? A study of Chinese scientists By Ying Zhang; Cornelia Lawson; Liangping Ding
  8. Robust CO2-abatement from early end-use electrification under uncertain power transition speed in China's netzero transition By Chen Chris Gong; Falko Ueckerdt; Christoph Bertram; Yuxin Yin; David Bantje; Robert Pietzcker; Johanna Hoppe; Michaja Pehl; Gunnar Luderer
  9. Improving Regulation for Innovation: Evidence from China’s Pharmaceutical Industry By Ruixue Jia; Xiao Ma; Jianan Yang; Yiran Zhang
  10. The Rise of Ev Protectionism: France's New Subsidies, with Implications for Korean Policy By Kim, Key Hwan; Kang, Ji Hyun
  11. The Russia Economic Sanctions Impact World Economy By Alali, Walid Y.; Alali, Haider
  12. Who Should Pay? Climate Finance Fair Shares By Jonathan Beynon

  1. By: Rolf Schwartz
    Abstract: This paper traces the history of China’s development co-operation system and looks into its practices, touching upon implementation gaps with established international norms and practices.
    Keywords: asia, China, developing countries, development co-operation, development effectiveness, development finance, development planning, institutions, sdgs
    JEL: N2 N25 O1 O19 O2 O5 O53 G28
    Date: 2023–12–22
  2. By: MA, Xinxin; LI, Yalan; IWASAKI, Ichiro
    Abstract: This study performed a meta-analysis of 506 estimates extracted from 75 studies to estimate the effect size of rural household registration (hukou) on wage levels. Our meta-synthesis results indicated that the negative effect of rural hukou on wages is statistically significant; however, the effect size remains small in terms of the partial correlation coefficient. The results of the meta-regression analysis and test for publication selection bias indicated that the differences in the wage effect of hukou among genders, corporate ownership sectors, and periods are insignificant. We also found that publication selection bias is unlikely, and genuine evidence exists in the literature.
    Keywords: household registration (hukou) system, wage gap, rural migrant worker, synthesis, meta-regression analysis, publication selection bias, China
    JEL: D63 J31 J71 P21 P31
    Date: 2023–12
  3. By: Gale, Fred; Dong, Fengxia
    Abstract: China is a major meat producer, consumer, and importer, but consumption changes are difficult to assess due to inconsistencies in Chinese data. China’s population growth is slowing, meat prices are rising, and income is growing at a slower pace than during earlier decades. Disease and other supply-side factors constrain domestic meat supply and imports are a growing share of the supply of each type of meat. Nevertheless, statistical models based on consumer income growth and meat prices suggest China has potential for continued growth in meat consumption. Consumption of poultry, beef, and mutton is growing faster than pork consumption but pork still comprises more than half of consumer meat expenditure in China. Consumption is growing despite rising meat prices in China, and statistical models confirm that consumption is relatively insensitive to price changes. Beef and mutton consumption have risen despite sustained price increases for these meats. Poultry appears to be a substitute for pork.
    Keywords: Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, International Relations/Trade, Livestock Production/Industries, Production Economics, Productivity Analysis, Research Methods/ Statistical Methods
    Date: 2023–07
  4. By: Cho, Jaehan (Korea Institute for Industrial Economics and Trade); Cho, Eun Kyo (Korea Institute for Industrial Economics and Trade); Kyung, Heewon (Korea Institute for Industrial Economics and Trade); Choi, Mincheol (Korea Institute for Industrial Economics and Trade); Kim, Yong (Korea Institute for Industrial Economics and Trade); Kim, Hanhin (Korea Institute for Industrial Economics and Trade)
    Abstract: The Biden-Harris Administration issued an Executive Order in August to limit the financing of and investment in advanced technologies in China. Semiconductors, quantum computers, and artificial intelligence (AI) were specifically targeted. Beijing is expected to respond to the White House’s Executive Order by introducing its own financial restrictions targeting American companies, such as delays in the authorization of merger-and-acquisition (M&A) deals, while also taking measures to accelerate the fragmentation of the world economy into blocs by its augmenting technological competitiveness and related ecosystems. The direct recent order and its ramifications on South Korea are likely to be limited because financial linkages between China and Korea in many key technologies are weak. Nevertheless, Korean policymakers need to devise strategies that enhance the competitiveness of Korean certain technologies and attract investments from international investors, while navigating an increase in uncertainties over technology financing and investment stemming from White House action. The Korean strategy ought to (1) prepare for greater uncertainties in the financial markets of certain technologies and for a broadening of scope of certain technologies in the future, and potential calls to cooperate in US-led efforts to contain China, (2) prepare for an escalation of the US-China technology hegemony rivalry across all fronts, now that the US's China policy measures encompass the financial markets, (3) increase support for and technological cooperation with foreign investors, with a view toward attracting friend-shoring investments in Korean technologies, and (4) reinforce financial and investment strategies and loosen regulations to attract cutting-edge technologies through strategic M&A with foreign companies.
    Keywords: US-China rivalry; protectionism; reshoring; friendshoring; economic security; economic nationalism; chips; semiconductors; batteries; electric vehicles; EVs; manufacturing; trade policy; trade protectionism; advanced technologies; Korea
    JEL: F02 F13 F21 F50 F51 F52
    Date: 2023–09–27
  5. By: António Afonso; Valérie Mignon; Jamel Saadaoui
    Abstract: We assess the impact of China’s bilateral political relations with three main trading partners—the US, Germany, and the UK—on current account balances and exchange rates, over the 1960Q1-2022Q4 period. Relying on the lag-augmented VAR approach with time-varying Granger causality tests, we find that political relationships with China strongly matter in explaining the dynamics of current accounts and exchange rates. Such relationships cause the evolution of the exchange rate (except in the UK) and the current account; these causal links being time-varying for the US and the UK and robust over the entire period for Germany. These findings suggest that policymakers should account for bilateral political relationships to understand the global macroeconomic consequences of political tensions.
    Keywords: political relations, time-varying causality, lag-augmented vector autoregression, China
    JEL: C22 F51 Q41
    Date: 2023
  6. By: MA, Xinxin; CHENG, Jie
    Abstract: Using national longitudinal survey data from the China Family Panel Studies from 2010 to 2020, this study explores union effects on the gender wage gap in China. The results demonstrate that the union wage premium is greater for women than men; the union wage premium beneficial for women in the public sector is greater than that in the private sector. The gender gap in the probability of obtaining union membership is insignificant for both the public and private sectors. Discrimination against women among the non-union group is the main factor generating the gender wage gap for both the public and private sectors, and the effect in the public sector is greater than that in the private sector. Additionally, the gender gap in unionism reduces the gender wage gap in the public sector while it widens the wage gap in the private sector, and the endowment differences reduce the gender wage gap in both the public and private sectors.
    Keywords: union membership, gender wage gap, discrimination, public and private sector, China
    JEL: J51 J52 J16 J31 J71
    Date: 2023–12
  7. By: Ying Zhang (Department of Information Management, Peking University); Cornelia Lawson (Manchester Institute of Innovation Research, The University of Manchester); Liangping Ding (National Science Library, The Chinese Academy of Sciences; Department of Library, Information and Archives Management, The University of The Chinese Academy of Sciences)
    Abstract: Returning scientists play a critical role in building up the academic workforce and science in their home country. Yet, in this study we argue that return mobility may limit scientists‟ international relevance and thus spillover effects may not be realised. We take scientists returning to China as a sample to investigate the impact of return mobility on international visibility/impact. What is more, we explore the roles of the international collaboration network and international knowledge base in this effect. Our findings clarify the limitation of return mobility and provide some empirical evidence on the limits of global knowledge spillovers in science and talent introduction policies.
    Keywords: International mobility, International collaboration, Academic performance, Research visibility, Knowledge spillovers
    Date: 2023–02
  8. By: Chen Chris Gong; Falko Ueckerdt; Christoph Bertram; Yuxin Yin; David Bantje; Robert Pietzcker; Johanna Hoppe; Michaja Pehl; Gunnar Luderer
    Abstract: Decarbonizing China's energy system requires both greening the power supply and end-use electrification. While the latter speeds up with the electric vehicle adoption, a rapid power sector transformation can be technologically and institutionally challenging. Using an integrated assessment model, we analyze the synergy between power sector decarbonization and end-use electrification in China's net-zero pathway from a system perspective. We show that even with a slower coal power phase-out, reaching a high electrification rate of 60% by 2050 is a robust optimal strategy. Comparing emission intensity of typical end-use applications, we find most have reached parity with incumbent fossil fuel technologies even under China's current power mix due to efficiency gains. Since a 10-year delay in coal power phase-out can result in an additional cumulative emission of 28% (4%) of the global 1.5{\deg}C (2{\deg}C) CO2 budget, policy measures should be undertaken today to ensure a power sector transition without unexpected delays.
    Date: 2023–12
  9. By: Ruixue Jia; Xiao Ma; Jianan Yang; Yiran Zhang
    Abstract: This study investigates how enhanced regulation can promote innovation, focusing on the impacts of a significant regulatory reform in China's pharmaceutical sector implemented in 2015. Inspired by regulatory practices in the U.S., the reform aimed to address application backlogs and reduce administrative waiting time for new drug development. Using data at the drug and firm levels during 2012--2021, we make three main findings: (1) drug categories experiencing improved approval times witnessed a surge in investigational new drug applications and related clinical trials; (2) despite little improvement in innovativeness (measured by novel targets unexplored by U.S. counterparts) within drug categories, the reform led to changes in firm composition, attracting innovative new firms and boosting overall drug innovativeness; and (3) the market recognized the improvement in drug innovation, as reflected in stock price adjustments post new drug registrations after the reform. Our findings demonstrate that regulatory barriers can hinder the entry of innovative firms and suggest that latecomers could boost their innovation potential by adopting specific, effective regulatory practices from frontier countries.
    JEL: D22 I15 I18 O31
    Date: 2023–12
  10. By: Kim, Key Hwan (Korea Institute for Industrial Economics and Trade); Kang, Ji Hyun (Korea Institute for Industrial Economics and Trade)
    Abstract: The new green industry bill (known as la loi industrie verte) in France can be seen as the French version of the United States’ Inflation Reduction Act (IRA). The bill introduces new subsidies for electric vehicles (EVs), necessitating an analysis of the possible impact of these subsidies on Korean industries. The EV subsidies of the IRA are designed to relocate production and assembly of finished vehicles and key components parts back to the United States or the countries with which the US has free trade agreements (FTAs) in place. The EV subsidies introduced by the new bill in France, on the other hand, base subsidization on the carbon footprints of EV production and distribution. The new system of EV subsidies seeks to reduce the carbon footprint in six major areas of EV manufacturing: steel, aluminum, other materials, battery production, assembly, and transportation. This system effectively favors EVs produced in European countries, whose industries make more use of renewable energy and which are closer to France, at the cost of EV makers in China and elsewhere in Asia, as the long distances involved in transportation essentially preclude them from subsidization, and constitute non-tariff barriers (NTBs). Serving environmental and industrial objectives simultaneously, the new bill embodies an important paradigm shift in policymaking. From a trade perspective, this shift in the focus of protectionist policymaking from intermediate goods such as EV batteries to finished goods such as EVs threatens to see NTBs erected at every stage of the value chain in which these finished goods are produced. More barriers to trade under protectionist statutes like the IRA and France’s new green industry are likely to prompt the reintegration of markets and production bases after decades of geographical separation. Korean businesses will therefore be forced to change their business model, from an export-led approach that favored production in Korea to a model in which they increasingly produce goods in target markets. This has the potential to hollow out Korean industries. The manufacturing-driven Korean economy needs to adapt to new global reality radically different from the heyday of globalization, when major importing countries were neutral about foreign manufacturers.
    Keywords: electric vehicles; EVs; batteries; secondary batteries; Inflation Reduction Act; IRA; la loi industrie verte; France; subsidies; EV subsidies; non-tariff barriers; NTBs; protectionism; economic nationalism; economic security; reshoring; France; Korea
    JEL: H23 H25 K32 L60 L62 Q56 Q58
    Date: 2023–09–29
  11. By: Alali, Walid Y.; Alali, Haider
    Abstract: This paper examines the effects of the economic Russian Republic's sanctions on global trade, macroeconomic dynamics, and welfare losses by using a calibrated novel model of three groups sets of the global economy. These groups are Russia, the second imposing the sanctions (EU, UK and the United States) and the third group (Turkey, India and China Republic). We assume that each nation of the group has two spheres subject sanctioned, these are the gas and final necessary commodity product of consumer. We consider three different sanctions types: Financial, trade on Gas and trade sanctions on finished products or goods. We demonstrate that currency rate changes reflect the type of sanction and the direction of the consequent sectoral reallocation's within countries, rather than indicating the effectiveness of sanctions. Our welfare study shows that if the third nation group does not ratify the sanctions, the sanctioned country's welfare losses are greatly reduced, and the sanctioning country's welfare losses are increased, but the third country gains from not being associated with the sanctioning group nations. These results demonstrate the need for international sanction coordination but also its difficulties.
    Keywords: International coordination, Currency volatility, Economic growth, Reallocation, Welfare, Sanctions
    Date: 2023
  12. By: Jonathan Beynon (Center for Global Development)
    Abstract: The scale, source, and allocation of climate finance have been contentious aspects of the Paris Agreement and its implementation. Central to these are questions of “fair shares”: who might contribute what and whether the group of contributors should be expanded. New analysis presented here concludes that there is a case for nontraditional donors providing 20-30 percent of any total, with this finding robust to a variety of different measures of historical emissions, cut-off dates, and income. China, Russia, South Korea, Saudi Arabia, Taiwan, Poland, the United Arab Emirates, and Mexico consistently feature in the top 20. Developed countries, however, should continue to take primary responsibility, with the United States shouldering at least 40 percent of the burden in virtually all scenarios. The politics of climate finance will continue to be difficult, but it is hard to escape the conclusion that both the United States and China will need to provide more.
    Date: 2023–11–01

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