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on China |
| By: | Hanwei Huang; Jiandong Ju; Vivian Z. Yue |
| Abstract: | This paper studies the evolution of China's production and trade patterns during its integration into the global economy. We document and explain new facts concerning changes in production and exports at the industry and firm levels using microdata and a quantitative Ricardian and Heckscher-Ohlin model with heterogeneous firms. Counterfactual simulations reveal that capital deepening made China's production and exports more capital-intensive, although labor-biased productivity growth acted as a counterforce. Consistent with the data, our model demonstrates that China's trade openness peaked around the mid-2000s and fell until the 2020s, while the world's exposure to Chinese exports rose continuously. |
| Keywords: | production and trade patterns, comparative advantage, heterogeneous firm, trade liberalization, capital deepening, productivity growth, trade openness, China shock |
| Date: | 2024–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1997&r= |
| By: | Dai, Li (Hunan University); Martins, Pedro S. (Universidade Nova de Lisboa) |
| Abstract: | China hosts the world's largest secondary education sector: more than 14 million adolescents enrol in secondary academic or vocational schools every year. Despite the large literature on returns to education, little evidence exists as to how these two streams compare in the country. Using 2013 China Household Income Project data, we estimate the returns to secondary vocational education both at the mean and along the conditional wage distribution. We use instrumental variables based on the considerable variation in education provision across cities and years (and a 1995 policy reform). We find that vocational education generates a large wage premium (up to 54%), especially for those of lower earnings potential. Our findings indicate that vocational education can be a good option for those who do not wish to enter tertiary education, especially the less well-off. |
| Keywords: | returns to education, vocational education, heterogeneity, instrumental variable quantile regression, China |
| JEL: | I26 I25 J24 J31 C36 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16957&r= |
| By: | Ackah, Charles; Alemayehu Geda Fole; Görg, Holger; Merchan, Federico |
| Abstract: | Foreign investments bring in not only new employment but also novel technology, managerial skill and know-how, that may also dissipate into the local economy. It is not clear whether this effect differs by the nationality of source countries, in particular between Chinese and non-Chinese firms. Based on a firm level survey on Ethiopia and Ghana, we found that all types of firms are engaged in limited R&D and innovation activity and their transfer to host countries in both countries. There is little difference between Chinese and non-Chinese foreign firms in such technology and managerial skill transfer once controlling for firm size and industry characteristics in the majority of metrices (R&D activities, horizontal & vertical spillover, directly adopting techniques). However, we found for Ghana that Chinese firms have more suppliers but are less likely to transfer technology to them. Chinese firms are more likely to transfer managerial skills than non-Chinese firms in Ghana though not in Ethiopia. Also, there is little evidence that foreign firms transfer technology via horizontal or backward spillovers in either countries. Finally, Chinese firms are much more likely to receive host country policy support than other foreign firms in Ghana but not in Ethiopia. |
| Keywords: | Foreign direct investment, China, Africa, technological transfer, Ethiopia, Ghana |
| JEL: | F2 O1 O3 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:295225&r= |
| By: | Hanwei Huang; Jiandong Ju; Vivian Yue |
| Abstract: | This paper studies the evolution of China's production and trade patterns during its integration into the global economy. We document and explain new facts concerning changes in production and exports at the industry and firm levels using microdata and a quantitative Ricardian and Heckscher–Ohlin model with heterogeneous firms. Counterfactual simulations reveal that capital deepening made China's production and exports more capital-intensive, although labor-biased productivity growth acted as a counterforce. Consistent with the data, our model demonstrates that China's trade openness peaked around the mid-2000s and fell until the 2020s, while the world's exposure to Chinese exports rose continuously. |
| JEL: | D24 E23 E25 F12 F14 F16 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32415&r= |
| By: | Ziwei XU (Faculté de droit, d’économie et de finance, Université du Luxembourg, (Luxembourg)) |
| Abstract: | The development of social enterprises in China has been underway for many years, but there are as yet no laws regulating them. Even though several local governments or private platforms have issued a few social enterprise certification documents in the past years, it is only confined to the standards for social enterprise certification, and such standards are not identical, one reason is the lack of a superior law, i.e., the gap in the regulation and law at the national level, as well as the absence of legal status for social enterprises. Meanwhile, the rapid growth in the number of social enterprises has raised new demands for the legal recognition of social enterprises. As a result of covid-19, the collapse of the real economy and the rise in unemployment due to the delinking of China’s economy from globalization is also awaiting a breakthrough in the legitimacy of social enterprises to seek a solution. The role played by the Chinese government will also have an impact on the need for social enterprise legal frameworks. The introduction of social enterprise legislation in China, especially the timing of the adoption of this legal framework, cannot be separated from the situation of the development of the local social enterprise ecosystem, which is not isolated and closely related to the Chinese social system, economic development, political environment, and cultural background. This paper employs a literature-based analysis, supplemented by a comparative approach, to explore and analyze the need and timing of the introduction of legislation for social enterprises, with the hope of shedding some light on social enterprise stakeholders, potential investors, legal practitioners, lawmakers, and researchers in other fields. |
| Keywords: | social enterprise, legislation, need, time, ecosystem, China |
| JEL: | K22 L30 L31 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:crc:wpaper:2306&r= |
| By: | Bode, Eckhardt |
| Abstract: | This paper is one of the first to show systematically that the motives for sovereign lending to African countries differed considerably between China and Western countries during the last two decades. While Chinese lending mainly served its own economic or geopolitical objectives, which is well-known from the existing literature, Western countries' lending also pursued objectives that appear to be at odds with their self-interests but whose precise nature is not yet well-understood. While China lent to African countries with richer resources, lower risk of default and higher willingness to pay for credit, Western countries lent preferably to less resource-rich and more indebted African countries. Using a new, dataset on loans from China, Western countries and multilateral organizations to African countries, I empirically examine a broad variety of potential motives, aim at separating the motives pursued by the national governments from those pursued by their lending agencies, and employ an estimation strategy with increasingly complex fixed effects that yields additional interesting insights into the specificities of the motives. |
| Keywords: | Sovereign lending, Economic motives, Geopolitical motives, Africa, China, Western countries |
| JEL: | F21 F34 F35 F55 H63 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:295226&r= |
| By: | Sébastien Jean; Ariell Reshef; Gianluca Santoni; Vincent Vicard |
| Abstract: | We characterize China’s atypical dominance in world trade at the product level and analyze a number of factors that could explain it. Defining product-level dominant positions as a share of more than 50% of worldwide exports, we show that China held a dominant position in almost 600 products out of some 5, 000 in 2019. This is at least six times greater than the equivalent number for the United States, Japan or any other country, and twice the number for the European Union considered as a whole. This large number of dominant positions held by China is atypical by historical standards, at least since the 1970s. While we do not identify definite causes of China’s numerous dominant positions, we can rule out some explanations. The number of dominant positions is not explained by Chinese global market share alone. Nor is it explained by China’s sector specialization; dominant positions are prevalent in several important sectors (electronics, textiles/wearing apparel, footwear and machinery). Looking at pricing behavior, a fine-grained analysis based on individual firms’ average market share suggests that Chinese firms use their market power to charge significant mark-ups, much more than French exporters. Such product-level dominant positions make it difficult for importers to substitute their supplier for another, at least in the short term. This may be consequential in an open world increasingly seen through the lens of dependencies. |
| Keywords: | China;Export Concentration;Trade Dependencies;Economic Security |
| JEL: | F5 F14 F15 |
| Date: | 2023–12 |
| URL: | https://d.repec.org/n?u=RePEc:cii:cepipb:2023-44&r= |
| By: | Yanqiao Deng; Minda Ma |
| Abstract: | Assessing the energy and emissions of representative plug-in hybrid electric vehicle (PHEV) model operations is crucial for accelerating carbon neutrality transitions in China's passenger car sector. This study makes the first attempt to create a bottom-up model to measure the real-world energy use and carbon dioxide (CO2) emissions of China's top twenty selling PHEV model operations across different geographical regions during 2020-2022. The results indicate that (1) the actual electricity intensity for the best-selling PEHV models (20.2-38.2 kilowatt-hour [kWh]/100 kilometers [km]) was 30-40% higher than the New European Driving Cycle (NEDC) values, and the actual gasoline intensity (4.7 to 23.5 liters [L]/100 km) was 3-6 times greater than the NEDC values. (2) The overall energy consumption of the best-selling models exhibited variations among various geographical regions, and the total gasoline equivalent was twice as high in southern China (1283 mega-liters, 2020-2022) than in northern China and the Yangtze River Middle Reach. (3) The top-selling models emitted 4.9 mega-tons (Mt) of CO2 nationwide from 2020-2022, 1.9 Mt from electricity and 3 Mt from gasoline. In northern China, carbon emissions per vehicle were more than 1.2 times greater than those in other regions. Furthermore, targeted policy implications for expediting the carbon-neutral transition within the passenger vehicles are proposed. Overall, this study reviews and compares national and regional benchmark data and performance data for PHEV operations. Its objective is to bolster national decarbonization initiatives, ensuring low emissions and expediting the transportation sector's transition toward a net-zero era. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.07308&r= |
| By: | BAI Yuting; MARUYAMA Shiko; WANG Si |
| Abstract: | Late-life cognition is a growing concern as populations age. This study investigates how the number of children affects late-life cognition in rural China by exploiting the exogenous variation in the rollout timing of Family Planning Policies. Theoretical analysis suggests a nonlinear effect along the fertility dimension. Using data from the China Health and Retirement Longitudinal Study, we find nonlinear causal effects of fertility. Having one more child when the mother has 4+ children leads to adverse effects on a range of late-life cognition measures, while positive effects exist for episodic memory and mental intactness at low parities, implying hump-shaped effect heterogeneity. Underlying this hump-shaped causal relationship is increased interaction with children but a greater risk of chronic conditions. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:24056&r= |
| By: | Shuo Chen; Raymond Fisman; Xiaohuan Lan; Yongxiang Wang; Qing Ye |
| Abstract: | Kinship ties are a common institution that may facilitate in-group coordination and cooperation. Yet their benefits – or lack thereof – depend crucially on the broader institutional environment. We study how the prevalence of clan ties affect how communities confronted two well-studied historical episodes from the early years of the People's Republic of China, utilizing four distinct proxies for county clan strength: the presence of recognized ancestral halls; genealogical records; rice suitability; and geographic latitude. We show that the loss of livestock associated with 1955-56 collectivization (which mandated that farmers surrender livestock for little compensation) documented by Chen and Lan (2017) was much less pronounced in strong-clan areas. By contrast, we show that the 1959-61 Great Famine was associated with higher mortality in areas with stronger clan ties. We argue that reconciling these two conflicting patterns requires that we take a broader view of how kinship groups interact with other governance institutions, in particular the role of kinship as a means of elite control. |
| JEL: | N95 P32 Z10 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32414&r= |
| By: | Yijun YU; Hisaki KONO |
| Abstract: | Since 2013, China’s Two-Child Policy has significantly r eformed t he O ne-Child Policy, permitting the birth of a second child. This paper explores how this policy revision affects female labor participation in China, arguing that the policy negatively impacts women’s workforce involvement resulting from statistical discrimination. We employ the China Family Panel Studies data and a difference-in-difference mo del to in vestigate di fferences bet ween wom en wit h one child and women with two children in terms of employment status, job stability, and promotion. The findings i ndicate t hat t he p robability o f o btaining e mployment i n a w age-paying position is about 8% lower for women with one child compared to women with two children. Additionally, one-child women are around 11% more likely to experience unemployment, suggesting the existence of demand-side discrimination. Our results are robust under an inverse propensity weighting approach that balances the characteristics between the treatment and control group, and Heckman’s two-step method that accounts for a selection bias. A sensitivity check considering the unobserved characteristics further validates our analysis. |
| Keywords: | family planning policy, two-child policy, women labor force participation, statistical discrimination |
| URL: | https://d.repec.org/n?u=RePEc:kue:epaper:e-24-001&r= |
| By: | Xiaoxuan Zhang (University of Waikato); John Gibson (University of Waikato) |
| Abstract: | China’s high-speed rail (HSR) has quickly expanded to over 40, 000 km of lines operating and another 10, 000 km under construction. This is over 10-times longer than the networks in long-established HSR countries like France, Germany or Japan. While fewer than 100 county-level units had stations on the HSR network in the first years of operation, the eight years from 2012-19 saw almost 400 more county-level units connect to the HSR network. Effects on local economic activity from this substantial increase in connections to the HSR network remain contested. Some prior studies find either insignificant effects on local economic growth or even negative effects in peripheral regions. In light of this debate, we use spatial econometric models for a panel for almost 2500 county-level units to study effects of connecting to the HSR network. We especially concentrate on the 2012-19 period that has high quality night-time lights data to provide an alternative to GDP as an indicator of growth in local economic activity. Our spatial econometric models allow for spatial lags of the outcomes, of the covariates, and of the errors. We also address potential endogeneity of the HSR networks and connections, using an instrumental variables strategy. Across a range of specifications, we generally find that growth in local economic activity is lower following connection to the HSR network, with this effect especially apparent when using high quality night-time lights data for the 2012-19 period. Hence, expansion of the HSR network may not boost China’s economic growth. |
| Keywords: | High-speed rail; infrastructure; luminosity; spatial spillovers; China |
| JEL: | R12 |
| Date: | 2024–06–05 |
| URL: | https://d.repec.org/n?u=RePEc:wai:econwp:24/03&r= |
| By: | Xiao Cen; Vyacheslav Fos; Wei Jiang |
| Abstract: | China’s industrial policies (“Five-Year Plans”) displace U.S. production/employment and heighten plant closures in the same industries as those targeted by the policies in China. The impact was not anticipated by the stock market, but U.S. companies in the "treated industries" suffer a valuation loss afterwards. Firms shift production to upstream or downstream industries benefiting from the boost, or offshore to government-endorsed industries in China. Such within-firm adjustments offset the direct impact. U.S. firms are better able to withstand foreign government interventions provided that they enjoy flexibility, including preexisting business toeholds in the "beneficiary" industries, financial access, and labor fluidity. |
| JEL: | G3 G30 G31 G38 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32411&r= |
| By: | Gorgens, Tue (Australian National University); Meng, Xin (Australian National University); Zhao, Guochang (Southwest University of Finance and Economics, Chengdu) |
| Abstract: | Fifty years ago, China sent more than 16 million urban youths aged 16–19 to rural villages to work and they spent between 1 and 10 years there. This is known as the 'sent-down youth' (SDY) program. This paper examines how this internal migration impacted rural economic development in the regions that received a larger number of SDY per capita relative to regions that received less. We find a sizeable and persistent impact of the SDY program on real per capita GDP and nighttime light in the years after the program ended. Surprisingly, although our results confirm that the SDY increased education level of relevant cohorts, the variation in the education level of these cohorts does not seem to contribute directly to rural GDP and nighttime lights. We provide suggestive evidence regarding mechanisms through which the SDY influenced rural economic development. |
| Keywords: | economic development, migration, sent-down youth, China |
| JEL: | O18 J61 R23 N00 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16951&r= |
| By: | Miaomiao Shen; Linxuan Yu; Jing Xu; Zihao Sang; Ruijia Li; Xiang Yuan |
| Abstract: | Autonomous vehicles (AVs) have begun experimental commercialization initiatives in places such as Shanghai, China, and it is a valuable research question whether people's willingness to use AVs has changed from the prior. This study explores Shanghai residents' attitudes towards AVs by applying the Technology Acceptance Model (TAM), the Perceived Risk (BAR) model, and introducing perceived externalities as a new psychological variable. Through a survey in Shanghai, where AVs are operational, and structural equation modeling, it was found that perceived usefulness and ease of use positively influence willingness to use AVs, with perceived usefulness being the most significant factor. Perceived externalities have a positive impact, while perceived risk negatively affects willingness to use. Interestingly, ease of use increases perceived risk, but this is mitigated by the benefits perceived in usefulness. This research, differing significantly from previous studies, aims to guide government policy and industry strategies to enhance design, marketing, and popularization. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.05578&r= |
| By: | Salam Rabindrajit Luwang; Anish Rai; Md. Nurujjaman; Om Prakash; Chittaranjan Hens |
| Abstract: | Statistical analysis of high-frequency stock market order transaction data is conducted to understand order transition dynamics. We employ a first-order time-homogeneous discrete-time Markov chain model to the sequence of orders of stocks belonging to six different sectors during the USA-China trade war of 2018. The Markov property of the order sequence is validated by the Chi-square test. We estimate the transition probability matrix of the sequence using maximum likelihood estimation. From the heat-map of these matrices, we found the presence of active participation by different types of traders during high volatility days. On such days, these traders place limit orders primarily with the intention of deleting the majority of them to influence the market. These findings are supported by high stationary distribution and low mean recurrence values of add and delete orders. Further, we found similar spectral gap and entropy rate values, which indicates that similar trading strategies are employed on both high and low volatility days during the trade war. Among all the sectors considered in this study, we observe that there is a recurring pattern of full execution orders in Finance & Banking sector. This shows that the banking stocks are resilient during the trade war. Hence, this study may be useful in understanding stock market order dynamics and devise trading strategies accordingly on high and low volatility days during extreme macroeconomic events. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.05634&r= |
| By: | Boeing, Philipp; Mueller, Elisabeth |
| Abstract: | The global economic landscape has fundamentally shifted from the paradigm of globalization to renewed concerns regarding the risks and rewards of technological interdependence. This shift has sparked a critical discussion on technology sovereignty. This concept refers to a country's ability to provide essential technologies for competitiveness and welfare, and to develop or acquire them from other geographic areas without being unilaterally dependent on any particular one. We analyze the technology sovereignty of the world's leading innovators, including Europe, the US, China, Japan and Korea. By examining citation data from the universe of PCT patent applications, we determine the strength and direction of inventions' influence at global and bilateral levels to assess each geographic area's technology sovereignty. Our analysis shows that the US holds substantial technology sovereignty due to its leading global and bilateral influence. Despite ongoing US-European integration, their global positions differ, as Europe is dependent on all other areas except China. Although China has globally filed the most patent applications in recent years, bilaterally it remains dependent on all other geographic areas. Moreover, only Japan and Korea show a recent decline in their global influence. |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewpbs:294873&r= |