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on China |
| By: | Brueckner, Markus; Haidi Hong, Haidi; Vespignani, Joaquin |
| Abstract: | This paper presents estimates of the effects that government regulation of diesel and petrol prices has on GDP growth. Theory suggests that when supply curves are convex, a decrease in the regulatory price has a larger effect on output than a tantamount increase. Motivated by this theoretical insight, we specify VAR models with asymmetric effects of positive and negative changes in the regulatory prices of diesel and petrol. We estimate the VAR models on quarterly data from China’s national accounts during the period Q1 1998 to Q4 2018. Our main findings are that: (i) negative growth rates of regulatory diesel and petrol prices significantly reduce GDP growth; (ii) positive growth rates of regulatory diesel and petrol prices have a positive, but quantitatively small and statistically insignificant effect on GDP growth. |
| Keywords: | GDP growth, energy price regulation |
| JEL: | E0 E00 Q4 Q43 |
| Date: | 2023–06–06 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122869 |
| By: | Belguise, Margot; Chen, Nora Yuqian; huang, yuchen (Sciences Po Paris); Mo, Zhexun |
| Abstract: | China has experienced a remarkable rise in living standards over four decades of economic reforms, alongside a tremendous increase in inequalities. In this context, do Chinese people support redistribution of wealth gained through reform windfalls? To answer this question, we conducted an online survey experiment with a nationally representative sample from China (N = 2, 000). The treatment group was shown examples of wealth acquired through typical reform-era pathways requiring minimal ability or effort. This exposure led to a 0.1 standard deviation decrease in their support for redistribution. We propose a “reform windfall as redistribution” mechanism to explain this reduction: the treated group perceives the reform era as inherently redistributive, providing opportunities to escape systemic inequalities tied to the political system, thereby reducing the perceived need for formal redistribution. This decline in support is not driven by changes in fairness perceptions, as respondents do not attribute the wealth acquisition scenarios to ability or effort, nor do they view them as distinctly fair or unfair. Furthermore, we find limited evidence of heterogeneity, with one exception: individuals reporting higher economic pressure show an even greater reduction in redistributive support when exposed to the treatment. We hypothesize that this occurs because unmet expectations for upward mobility exacerbate their reactions to the treatment scenarios. (Stone Center on Socio-Economic Inequality Working Paper) |
| Date: | 2024–12–16 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:cwv5h |
| By: | Jing Yuan (School of Statistics, Shandong Technology and Business University, Yantai, Shandong 264005, China); Teng Ma (Penglai Sub-branch, Industrial and Commercial Bank of China Limited Company, 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: | Using the China CFPS database, this paper measures the degree of intra-occupational inequality in China with the Pareto coefficient and uses the GE index to decompose the top income gap by region as well as by industry. The empirical results show that, firstly, the degree of income inequality between occupations in China has increased significantly in recent years. The provinces with a higher degree of income inequality between occupations are mostly located in the more economically developed regions in the central and eastern parts of the country, while the degree of inequality between occupations in the western part is lower. Secondly, the highest-income occupations are mainly in the manufacturing industry, with relatively high levels in the construction industry, the education sector, the wholesale and retail trade, and public administration and social organizations, while the levels in other occupations are relatively low. Lastly, the top income gap primarily originates from within industries. However, the contribution rate of the top income gap between industries is gradually increasing, while the contribution rate of the top income gap within industries is gradually decreasing. |
| Keywords: | Occupational income inequality; Pareto coefficient; GE index |
| JEL: | D31 E25 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:kan:wpaper:202502 |
| By: | Li, Yanan (Beijing Normal University); Menon, Nidhiya (Brandeis University); Sunder, Naveen (Bentley University) |
| Abstract: | Attending kindergarten (KG) has been shown to have persistent benefits, but the peer effects of KG remain largely unexplored. We fill this gap in the literature by using nationally representative panel data on a cohort of middle-school students (grade 7) in China. We demonstrate that when peers have had limited time to interact with one another (three to six months), there are no discernable effects of peer KG status. However, in the medium-term (14+ months), having a peer group with KG experience improves academic (math, English, and Chinese exam scores) and non-cognitive outcomes including mental health and social adjustment. These impacts are more pronounced among children from underprivileged families, and are explained by reallocation of student time and effort, a better classroom environment, improved friends' attitudes and behaviors, and pedagogically effective teacher-student interactions. The presence of these positive cross-peer spillovers indicates that the overall benefits of KG attendance are likely to be even higher than previously understood. |
| Keywords: | Kindergarten attendance, positive spillovers, cognitive and non-cognitive measures, mental health, middle-school, China |
| JEL: | I21 I24 I26 J13 J24 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17531 |
| By: | Deng, Kent; Shen, Jim Huangnan; Guo, Jingyuan |
| Abstract: | This article probes performance and mechanisms of the Maoist economy from 1950 to 1980, a period commonly regarded as a turning point that ushered in a bumpy but new path for China’s new economic fortune, including industrialisation and modernisation. Mao and his government have often been regarded as a developer and moderniser for China. This study questions it. To that end, the Maoist economy is re-conceptualised, re-examined, and re-assessed with qualitative and quantitative evidence including empirical modelling. The key findings suggest that the Maoist economy was a closed one with industrial dependence on agriculture in an urban-rural zero-sum. In the end, despite the official propaganda agriculture declined, industrial workforce stagnated, and the population was poor. This gloomy performance justified the post-Mao reforms and opening up, a game changer that put China on a very different trajectory of growth and development. |
| Keywords: | Maoism; closed economy; zero-sum; industrial dependence on agriculture |
| JEL: | N0 |
| Date: | 2024–12–05 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124262 |
| By: | Ying Bai; Ruixue Jia; Jiaojiao Yang |
| Abstract: | This study examines the short-, medium-, and long-term impacts of state censorship on knowledge production, focusing on the largest book-banning campaign in Chinese history, initiated during the compilation of the 'Siku Quanshu' (Complete Library in Four Sections) between 1772 and 1783. Analyzing publication data from over 161, 000 books spanning the 1660s to the 1940s, we find that categories subjected to stricter censorship experienced significant declines in publication during the seven decades following the bans (1770s–1830s). However, beginning in the 1840s, political upheavals and the erosion of state control triggered a resurgence of publications in previously restricted categories. This pattern of suppression and recovery extends to ideas, as evidenced by keyword analysis of book titles. Further analysis highlights the central role of chilling effects in driving these dynamics, with the exit and entry of publishers playing a crucial role in both the suppression and subsequent revival of knowledge production. |
| JEL: | D83 H11 N40 O31 Z18 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33258 |
| By: | Wang, Zeyang |
| Abstract: | The Volume-Based Procurement (VBP) undertaken by governments significantly influences the healthcare landscape across numerous nations. Initiated in 2018 and broadened in 2019, the National Volume-Based Procurement in China has experienced eight phases of execution throughout key regions. This research utilizes a Difference-in-Differences (DID) framework to assess the effects of centralized procurement on pharmaceutical results. The results indicate that: (1) in the 2018 pilot phase, there was a significant reduction in drug expenditures, an increase in quantities, and a marked decline in prices; and (2) when analyzing the impact of all seven subsequent rounds, both expenditures and prices continued to show significant decreases, although quantities also saw a considerable decline. |
| Keywords: | Volume-Based Procurement (VBP); Pharmaceutical Prices; Difference-in-Differences (DID) |
| JEL: | C8 H40 I18 |
| Date: | 2024–12–13 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123015 |
| By: | Bian, Jiangze; Da, Zhi; He, Zhiguo; Lou, Dong; Shue, Kelly; Zhou, Hao |
| Abstract: | Using granular data covering both regulated (brokerage-financed) and unregulated (shadowfinanced) margin accounts in China, we provide novel evidence on retail investors’ margin trading behavior and its price implications. First, we show that retail investors’ decisions to lever up in stock trading despite the hefty borrowing cost is related to their lottery preferences. We then show that margin borrowing affects investors’ trading behavior: investors are more likely to liquidate their holdings as they inch closer to margin calls. Third, we show that margin-induced trading aggregates to affect asset prices and contributes to shock spillovers across stocks (for example, from lottery stocks to non-lottery stocks). |
| Keywords: | margin-induced trading; leverage; liquidation; contagion |
| JEL: | G11 G12 G14 |
| Date: | 2024–07–18 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126110 |
| By: | Mau, Karsten (RS: GSBE MORSE, RS: GSBE FSD, RS: GSBE other - not theme-related research, Macro, International & Labour Economics); Xu, Mingzhi; Zheng, Yawen |
| Abstract: | We evaluate how access to international transport infrastructure promotes trade and economic development. Exploiting the gradual unfolding of transcontinental rail freight connections between China and Europe, our empirical findings indicate increasing exports from connected cities, with positive spillovers to other transport modes, neighboring cities, and indicators of economic activity. Not all products and cities are equally responsive to new rail export opportunities. We set up a multi-sector heterogeneous firms model with a rich specification of trade costs, in which firms optimize trade costs by choosing alternative transportation modes and routes. Leveraging a unique data set on trade flows between Chinese cities, we calibrate our model to discuss local welfare effects, relying on a sufficient statistic that quantifies changes in city-level trade costs. We also highlight significant spatial distributional effects of trade infrastructure development. |
| JEL: | F14 F15 R11 R41 |
| Date: | 2025–01–16 |
| URL: | https://d.repec.org/n?u=RePEc:unm:umagsb:2025001 |
| By: | Zhengyang Jiang; Hongqi Liu; Cameron Peng; Hongjun Yan |
| Abstract: | We survey a large, representative sample of retail investors in China to elicit their memories of stock market investments and their return expectations. We merge this survey data with administrative transaction data to test a model in which investors selectively recall past experiences to form their beliefs. Our analysis uncovers new facts about investor memory and highlights similarity-based recall as a novel mechanism of belief formation in financial markets. A rising market prompts investors to recall their past experiences more positively, leading to more optimistic forecasts of future returns. Recalled experiences explain a sizable fraction of cross-investor variation in return expectations and dominate actual experiences in their explanatory power. In the transaction data, we confirm that recalled experiences affect investors' trading decisions through a belief channel. |
| JEL: | D14 D91 G41 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33226 |
| By: | Liu, Xueying (Capital University of Economics and Business, Beijing); Zhao, Zhong (Renmin University of China) |
| Abstract: | This study investigates the impact of social pension insurance on the efficiency of household financial portfolios, utilizing data from the 2019 wave of the China Household Finance Survey. Our findings indicate that social pension insurance significantly enhances the efficiency of household financial portfolios, partly through the channels of risk attitude and precautionary savings. |
| Keywords: | social pension insurance, household portfolios, sharpe ratio, efficiency |
| JEL: | G59 J24 I28 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17492 |
| By: | Ehrlich , Isaac (State University of New York at Buffalo); Liu, Zhiqiang (State University of New York at Buffalo) |
| Abstract: | Our paper examines the financial preparedness of near-retirement individuals across five countries: the United States, Japan, and the Republic of Korea (developed economies) and the People’s Republic of China and India (developing economies). It focuses on four channels of retirement support: intra-family transfers, self-managed assets, private pensions, and public pensions, with an emphasis on self-dependency and willingness to hold risky assets. We develop two measures of preparedness—wealth-based and consumption-based—which assess the resources available to individuals near retirement. We find that, while wealth-based and, generally, consumption-based preparedness tends to be significantly higher in the more developed countries, self-dependency measures are higher in the developing countries, particularly in rural areas, where public pensions play a smaller role. Our regression analysis reveals that education, health, and prior wealth are key factors influencing individual preparedness through investments in risky assets. The paper concludes with policy recommendations for enhancing retirement preparedness in both developed and developing economies. |
| Keywords: | later-life financial preparedness; public pensions; human capital; self-dependency; asset management |
| JEL: | H55 J14 J32 |
| Date: | 2025–01–17 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:0763 |
| By: | Wu, Han (HEC Paris); Li, Yi (Central South University); Hope, Ole-Kristian (University of Toront); Liu, Qiliang; Cai, Hong |
| Abstract: | Despite a strong investor and social demand for firms to disclose information on political connections, mandatory disclosure requirements face considerable opposition. Given the challenges in enforcing mandatory disclosures, we investigate whether private information acquisition can be a viable alternative to disclosure. Using a setting of corruption investigations, we find that investors, on average, are not aware that the firms they have invested in have connections with the officials under investigation, suggesting a lack of visibility of the connections. However, a small number of institutional investors exploit their private access to information and sell their shares in response to the investigations. We also show that the high costs of information acquisition and a lack of incentives for analysts to disseminate sensitive information they have obtained contribute to this lack of visibility and result in a significant delay in retail investors’ reaction to material information. Our study contributes to the debate on mandating disclosure of political connections by showing that the lack of mandatory disclosure results in an uneven playing field that undermines transparency and fairness. |
| Keywords: | Political connections; Visibility; China; Information Acquisition; Price Incorporation |
| JEL: | M41 |
| Date: | 2024–03–23 |
| URL: | https://d.repec.org/n?u=RePEc:ebg:heccah:1511 |
| By: | MUYA, Jonathan |
| Abstract: | This paper explores the impact of geopolitical fragmentation on developing countries amid rising tensions between major powers like the USA, Russia, and China. It examines how these dynamics compel developing nations to make difficult decisions regarding economic survival, sovereignty, and growth. The analysis focuses on the economic, political, security, and environmental consequences of this fragmentation, using examples such as sanctions and trade wars. The study also assesses the role of the USA and its allies in shaping global governance, highlighting the challenges brought by the increasing influence of emerging powers like China and India. It argues for the need to reform institutions such as the IMF to better reflect the complexities of this fractured global landscape. At the same time, the paper emphasizes the potential of regional institutions to address these challenges and foster cooperative development. Ultimately, the paper underscores the importance of navigating these shifts to ensure sustainable development in a divided geopolitical environment. |
| Keywords: | Geopolitical Fragmentation, Developing Countries, Major Powers, Global Governance, Emerging Economies |
| JEL: | F51 F52 F53 F63 O19 Q56 R58 |
| Date: | 2024–11–09 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122708 |
| By: | Yue Cai (Faculty of Economics, Gakushuin University) |
| Abstract: | Many mutual fund investors rely primarily on past performance and likely do not engage in sophisticated analysis of managers' alpha when making investment decisions. This paper explores how investors' misperception of managerial skill affects mutual funds' market power and investors' welfare, using data from China's mutual fund market. Our findings indicate that investors often confuse the effects of fund exposures to common systematic factors with genuine managerial skill, thereby increasing the market power of funds. Market power of funds are higher when investor demand arises from factor-related returns. Counterfactual experiments suggest that employing more sophisticated asset pricing models to assess fund managerial skills can enhance investor welfare. For instance, basing investment decisions on performance adjusted by a 4-factor model could increase investor welfare by $203 to $674 per year for each investor |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:wap:wpaper:2412 |
| By: | Llamas Paola |
| Abstract: | This paper studies the link between historical rice cultivation and the ‘math quality’ of institutions in Chinese provinces. To address potential endogeneity concerns, we use Rice Suitability as an instrumental variable for rice cultivation. We find strong evidence of causal relationship between historical rice cultivation and institutions ‘math quality’, even after addressing potential endogeneity concerns and micronumerosity issues. Our findings suggest a novel perspective over conventional determinants of educational quality and evidence of a new potential long-term effect of rice cultivation. |
| JEL: | B23 C36 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:aep:anales:4741 |
| By: | Santiapichi, Giulio; Akcija, Zelena |
| Abstract: | This paper examines the dynamics of EU Environmental policy enforcement and the issue of ensuring compliance from foreign companies operating in the EU's waste management sector. The analysis will discuss the impact of China's 2017 ban on importing plastic waste for the EU, particularly looking at its implications for the EU waste management sector. The paper will suggest that China's ban ultimately dismantled the EU waste management framework, forcing it to begin treating low-quality plastics domestically. Through highlighting inconsistencies in the EU's environmental regulations, the study will suggest that the current domestic treatment of low-quality plastics in the EU has triggered instances of environmental and health damage to vulnerable local communities. The case study of Phaten Plastic recycling will underscore a critical instance of non-compliance to EU Environmental standards, yet this will serve to outline regulatory issues with ensuring that waste management companies comply with the EU’s environmental regulations. The paper will ultimately advocate for the need of a more robust EU accountability framework, in order to deter waste management companies from causing environmental damage to local environments and communities and adhere to Eu environmental standards. |
| Date: | 2024–11–29 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:x8jyz |