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on China |
| By: | Lodge, David; Manu, Ana-Simona; Van Robays, Ine |
| Abstract: | Using daily data since 2017, we disentangle China-specific structural shocks driving Chinese financial markets and examine spillovers across global markets. The novelty of this paper consists of simultaneously identifying China shocks with shocks emanating from the United States and shocks to global risk sentiment - two major forces driving global financial markets - to ensure that China spillover estimates do not reflect common factors. Our results show that shocks originating in China have material impacts on global equity markets, although spillovers are much smaller than those following shocks in the United States, or those triggered by shifts in global risk sentiment. By contrast, shocks from China account for a significant proportion of variation in global commodity prices, more on a par with those of the United States. Nevertheless, spillovers from China can be significantly amplified in an environment of heightened global volatility, or when the shocks are large. |
| Keywords: | China shocks, spillovers, global financial markets, commodities |
| JEL: | E44 E52 G15 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bofitp:283609&r=cna |
| By: | Fan, Ying (Department of Building and Real Estate, The Hong Kong Polytechnic University); Wang, Yidi (Department of Economics, Communication University of Beijing, China); Yang, Zan (Department of Real Estate and Construction Management, Royal Institute of Technology) |
| Abstract: | We investigate the impact of offspring’s income uncertainty associated with college enrollment on intergenerational decisions. We exploit the experiment of the national college entrance examination (NCEE) reform in China, which increases the uncertainty of households containing students of compulsory education age. Based on comprehensive survey data, we find that 1) offspring’s uncertainty arising from the NCEE reform significantly decreases household total consumption and shifts consumption structures toward intergenerational inputs and housing purchases; 2) additional housing demand can be attributed to a dynastic precautionary motivation, which has heterogeneous effects based on a status quo bias toward exposure to and perception of the reform; 3) the inclusion of illiquid housing assets tilts the portfolio of households toward safe and liquid financial assets, and this allocation adjustment makes households financially worse off. |
| Keywords: | offspring’s uncertainty; national college entrance examination; consumption; asset allocation; China |
| JEL: | D81 G51 R21 |
| Date: | 2024–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:kthrec:2024_004&r=cna |
| By: | Jing Yuan (School of Statistics, Shandong Technology and Business University, Yantai, Shandong 264005, China); Xiaomin Liu (School of Statistics, Shandong Technology and Business University, Yantai, Shandong 264005, China; School of Statistics, Shandong Technology and Business University, Yantai, Shandong 264005, China); Yinghui Wang (School of Statistics, Shandong Technology and Business University, Yantai, Shandong 264005, China); Zongwu Cai (Department of Economics, The University of Kansas, Lawrence, KS 66045, USA) |
| Abstract: | To achieve the common prosperity is an inevitable goal for the Chinese-style modernization. As an important policy tool for regulating income distribution in the labor market, it is greatly significant to see whether it can effectively lowering and cover the bottom. Using micro-data from the China Household Dynamics Tracking Survey, this paper measures the degree of inequality within occupations in China and explores the impact of the China's minimum wage standard on residents' occupational income inequality. Our empirical results show that for every 100 RMB yuan increase in the minimum wage standard, the Gini coefficient, which measures the level of income inequality among residents, drops by 0.318, which has an obvious economic effect. Income effect analysis results show that for every 100 RMB yuan increase in the minimum wage standard, income inequality for people in the high unequal income group falls remarkably by 0.362. The middle group has the weakest impact effect, and income inequality for people in the low unequal income group falls by only 0.126. This finding shows that the income effect brought about by the increase in the minimum wage standard is mainly reflected in the truncation effect on low-income people. By directly raising their income levels, the wage gap between low- and middle-income people has been reduced, and the level of income inequality has been reduced. Therefore, the improvement of the China's minimum wage standard in the future should be based on priority employment policies, starting with the goal of lowering the minimum wage standard and safeguarding the lives of low-income groups, and steadily promoting the common prosperity and making the substantial progress. |
| Keywords: | Inter-occupational Income inequality;, Pareto distribution; Minimum wage standard; Common prosperity |
| JEL: | C10 D63 D30 J30 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:kan:wpaper:202404&r=cna |
| By: | Moustafa Hamil (University of Kasdi Merbah Ouargla, Algeria) |
| Abstract: | This paper explores the competition between China and Taiwan in the semiconductor industry. It discusses the current state of the industry in both countries, their competitive advantages, and the strategies employed to gain an edge. The research also examines the global implications of this competition, the key factors shaping the rivalry, and possible avenues for cooperation to enhance the semiconductor industry's competitiveness and efficiency. The relationship between China and Taiwan is experiencing intense competition over the electronics sector, including semiconductors and electronic chips. Taiwan plays a significant role in the high-tech and electronics industry, which makes it a target of China's economic and technological hegemony strategies. China seeks to achieve superiority in these industries and gain control over the global supply chain, which gives it great strategic power. Its policy is to try to increase its influence on Taiwan, both by diplomatic pressure and by constant military threats. China seeks to achieve "national unity" and restore Taiwan under its control. This geopolitical escalation is increasing simultaneously with the rivalry between China and the USA. The United States stands by Taiwan through its political and military support, which further aggravates the tension between the two states. This competitiveness manifests itself in multiple areas, including technology, security and economics. In short, the conflict between China and Taiwan over semiconductors and electronic chips reflects the rising geopolitical tensions in the region, with the overlap of economic, political and technological factors, the ongoing rivalry between China and the United States further complicates the scene. |
| Keywords: | China, Taiwan, semiconductor, competition, challenges |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:smo:raiswp:0316&r=cna |
| By: | George A. Alessandria; Shafaat Y. Khan; Armen Khederlarian; Kim J. Ruhl; Joseph B. Steinberg |
| Abstract: | We use the dynamics of U.S. imports across goods in the period around the U.S.-China trade war with a model of exporter dynamics to estimate the dynamic path of the probability of transiting between Normal Trade Relations and a trade war state. We find (i) there was no increase in the likelihood of a trade war before 2018; (ii) the trade war was initially expected to end quickly, but its expected duration grew substantially after 2020; and (iii) the trade war reduced the likelihood that China would face Non-Normal Trade Relations tariffs in the future. Our findings imply that the expected mean future U.S. tariff on China rose more under President Biden than under President Trump. We also show that the trade response to the trade war is similar to the response to the 1980 liberalization that initially granted China access to U.S. markets at NTR terms and was expected to be quickly reversed. |
| JEL: | F12 F13 F14 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32150&r=cna |
| By: | International Monetary Fund |
| Abstract: | China has enjoyed decades of impressive growth, which has significantly improved living standards and largely eradicated extreme poverty. The growth has, however, been accompanied by widening imbalances and rising vulnerabilities, as excessive investment in infrastructure and housing has resulted in rising debt levels among property developers, local governments (LG), and local government financing vehicles (LGFVs). The authorities have proactively sought to contain developer leverage. This has contributed to a significant, but needed, adjustment in the property market that continues to weigh on economic activity, including through its impact on LG finances. Amid these structural challenges, the authorities have appropriately announced their goal to transition to high quality growth while tackling risks from the property sector and LG debt. |
| Date: | 2024–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:2024/038&r=cna |
| By: | Hongbin Li; Lingsheng Meng; Kai Mu; Shaoda Wang |
| Abstract: | This paper studies the unintended effect of English language requirement on educational inequality by investigating how the staggered rollout of English listening tests in China’s high-stakes National College Entrance Exam (NCEE) affected the rural-urban gap in college access. Leveraging administrative data covering the universe of NCEE participants between 1999 and 2003, we find that the introduction of English listening tests significantly lowered rural students’ exam score percentile ranks relative to their urban counterparts, resulting in a 30% increase in the rural-urban gap in college access. Our back-of-the-envelope calculations suggest that, as a result of this policy change, more than 54, 000 rural students lost college seats to their urban peers between 1999 and 2003, and another 11, 000 rural students who elite colleges could have admitted ended up in non-elite colleges, causing them significant future income losses. |
| JEL: | F69 I24 I28 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32162&r=cna |
| By: | Chenggang Xu (University of Hong Kong and WCU–SNU) |
| Abstract: | China's economic reforms have resulted in spectacular growth and poverty reduction. However, China's institutions look ill-suited to achieve such a result, and they indeed suffer from serious shortcomings. To solve the "China puzzle, " this paper analyzes China's institution -- a regionally decentralized authoritarian system. The central government has control over personnel, whereas subnational governments run the bulk of the economy; and they initiate, negotiate, implement, divert, and resist reforms, policies, rules, and laws. China's reform trajectories have been shaped by regional decentralization. Spectacular performance on the one hand and grave problems on the other hand are all determined by this governance structure. |
| JEL: | O17 O18 O43 P21 P25 P26 |
| Date: | 2024–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:cuf:wpaper:621&r=cna |
| By: | Thomas Klitgaard |
| Abstract: | China’s aggressive policies to develop its battery-powered electric vehicle (BEV) industry have been successful in making the country the dominant producer of these vehicles worldwide. Going forward, BEVs will likely claim a growing share of global motor vehicle sales, helped along by subsides and mandates implemented in the United States, Europe, and elsewhere. Nevertheless, China’s success in selling BEVs may not contribute much to its GDP growth, owing both to the maturity of its motor vehicle sector and the strong tendency for countries to protect this high-profile industry. |
| Keywords: | battery-powered electric vehicle (BEV); exports; trade; China; Europe; tariffs; protectionism |
| JEL: | F0 |
| Date: | 2024–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednls:97869&r=cna |
| By: | Kamin, Katrin; Langhammer, Rolf J. |
| Abstract: | The global economic landscape is undergoing a transformative shift, as evidenced by the BRICS nations’ increasing dominance. This development raises questions about the emergence of economic and political blocks and their potential leverage. China and India, as the world’s most populous nations within the group, are instrumental in driving global economic demand. The expansion of BRICS, with new members possessing vast natural resources, amplifies the group’s influence. However, the BRICS face a monetary and financial Achilles heel, especially in the case of China, hindering their ability to act independently. As the BRICS gain geopolitical significance, the G7 responds with infrastructure initiatives and trade agreements, though success hinges on reciprocal concessions. The BRICS thus serve as a wake-up call for the G7, prompting considerations of rejuvenating political and economic links amidst a shifting global landscape. |
| Keywords: | BRICS+, global order, International Trade, strategic resources, Monetary Policy |
| JEL: | F02 F15 F36 F40 F59 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkie:281985&r=cna |
| By: | Wei Jiang (Xiamen University); Daokang Luo (HKU - The University of Hong Kong); Liwen W.L. Wang (Shenzhen Univerisity [Shenzhen]); Kevin Zheng Zhou (HKU - The University of Hong Kong) |
| Abstract: | While financial globalization serves to diffuse positive corporate practices worldwide, there remains a scarcity of studies investigating the potential of foreign ownership in alleviating corporate bribery-a pervasive illegal practice in emerging markets. This study, rooted in institutional theory, examines how foreign ownership affects corporate bribery expenditures in emerging markets, incorporating crucial factors that encapsulate local regulatory, normative, and cognitive pressures. Leveraging longitudinal panel data on Chinese listed firms, our findings reveal that foreign ownership significantly reduces corporate bribery expenditures, underscoring the disciplining role of foreign investors. Moreover, such effect is weakened by regional corruption and regional gambling prevalence, yet amplified by the overseas experience of top executives. These findings yield insights into how international investors affect bribery in investee firms, considering the intricate fabric of local institutional contexts. |
| Keywords: | bribery, foreign ownership, regional corruption, regional gambling prevalence, overseas experience, emerging markets, bribery foreign ownership regional corruption regional gambling prevalence overseas experience emerging markets |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04432029&r=cna |
| By: | Kohnert, Dirk |
| Abstract: | Human activity has transformed the planet at a pace and scale unprecedented in recorded history, causing irreversible damage to communities and ecosystems. Countries have focused their capacities on economic growth, with too little attention to externalities in terms of environmental quality. The world will not avoid catastrophic warming unless wealthy nations accelerate their reduction of own emissions and help poorer countries to do the same. North America and Europe have contributed 62 % of carbon dioxide emissions since the industrial revolution, while Africa has contributed only 3%. However, it is in sub-Saharan Africa (SSA) that the impacts are most severe and the people most vulnerable. Developed countries, in their own interests, should focus on ways to help developing countries phase out fossil fuels and transition to renewable energy. However, there are tensions between richer and poorer nations over who should pay the costs of global warming. Rich countries have a responsibility to act more quickly than their low-income counterparts. Yet governments continue to subsidise the use of fossil fuels, and banks and companies still invest more in polluting industries than in climate solutions. The consumption habits of the richest 10 % of people generate three times more pollution than those of the poorest 50 %. Emerging economies such as China and India, which plan to achieve net-zero emissions by 2060 and 2070 respectively, should join the developed world in accelerating emissions reductions. It is not just the way we produce and use energy that needs to change quickly. It's the way we consume food, the way we protect nature. It's everything, everywhere, all at once. The agricultural sector is particularly vulnerable, especially in SSA countries where agriculture is central to the economy. Among the top eight countries with the highest cumulative net emissions from agriculture, forestry and other land use are two SSA countries, Nigeria and DR Congo. Most of these emissions are embodied in trade and are caused by consumption in regions such as Europe, the United States and China. The establishment of the Loss and Damage Fund agreed at COP27 will not be enough to turn the tide, nor will it necessarily translate into climate finance commitments, given the lack of progress in delivering the promised US$100 billion in annual climate finance from rich countries. African countries themselves need to reflect on their own strengths and step up their efforts in a timely and substantial way. |
| Keywords: | Environmental sustainability; Carbon neutrality; climate change; Carbon dioxide; environmental pollution; greenhouse gas; fossil fuel; renewable energy; Governance; European Union; highly industrialized countries; emerging economies; BRICS; Sub-Saharan Africa; South Africa; Nigeria; DR Congo; |
| JEL: | E21 E22 E23 E26 F18 F54 F64 G38 H23 H84 H87 I15 I31 K32 N17 N37 N57 O13 O44 O55 Q54 Z13 |
| Date: | 2024–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120212&r=cna |
| By: | Qixin Zhan (China Economics and Management Academy, Central University of Finance and Economics); Heng-fu Zou (The World Bank; Institute for Advanced Study, Wuhan University; Institute for Advanced Study, Shenzhen University) |
| Abstract: | This paper delves into the theoretical underpinnings of how freedom, grounded in the rule of law and property rights, shapes wealth accumulation and economic growth. By integrating liberty into the neoclassical growth model, we introduce the innovative concepts of "liberty consumption" and "liberty capital" and define utility and production functions on them. Through theoretical analysis and simulations, we ascertain that a robust preference for liberty nurtures sustained prosperity and heightened productivity. However, in scenarios where the costs associated with liberty consumption are substantial and liberty capital depreciates rapidly—indicating an environment inhospitable or constraining to liberty -- it adversely affects economic output and overall well-being. These insights underscore the significance of examining liberty dynamics in economic growth and development. Without the presence of liberty, property rights, and the rule of law within utility and production functions, society faces the peril of descending into either a Hobbesian state of "war of all against all" or a totalitarian state ruled by a singular authority. In either case, life becomes solitary, poor, nasty, brutish, and potentially short. |
| Date: | 2024–02–12 |
| URL: | http://d.repec.org/n?u=RePEc:cuf:wpaper:619&r=cna |