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on China |
| By: | Francois de Soyres; Ece Fisgin; Alexandre Gaillard; Ana Maria Santacreu; Henry L. Young |
| Abstract: | Since 2018, Chinese officials have been emphasizing the need for China to achieve greater self-reliance. As discussed in de Soyres and Moore (2024), China has reduced its reliance on imported inputs, while simultaneously becoming more dependent on foreign demand to absorb its manufactured goods. In this Note, we look at the evolution of the sectoral composition of China's exports and imports and investigate its similarity with the sectoral composition of the trade baskets of advanced economies (AEs). First, using a gravity model, we show that bilateral trade flows are significantly influenced by the complementarity between trading partners' export and import profiles---a metric we develop to complement existing measures that primarily focus on export similarity. This relationship persists after controlling for conventional variables. Our findings demonstrate how sectoral analysis can reveal shifting trade patterns and competitive dynamics during periods of rapid industrial transformation. We then document three key trends regarding the sectoral composition of Chinese international trade over the past decade. First, using existing measures of export similarity, we show that China has shifted towards producing and exporting in the same sophisticated product categories as advanced economies, particularly the euro area. Second, using our new index capturing the congruence between the sectoral specialization of an exporter and sectoral dependencies of an importer, we highlight that China is importing fewer of the types of goods that European countries typically export, potentially limiting European exporters' ability to benefit from Chinese economic growth. Third, we reveal how China's export basket is becoming more aligned with the import patterns of advanced economies, which could potentially strengthen China's position to serve AE markets. |
| Date: | 2025–02–28 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfn:2025-02-28-2 |
| By: | Jesus Fernandez-Villaverde; Yiliang Li; Le Xu; Francesco Zanetti |
| Abstract: | We examine the rise of dark shipping – oil tankers disabling AIS transceivers to evade detection – amid Western sanctions on Iran, Syria, North Korea, Venezuela, and Russia. Using a machine learning-based ship clustering model, we track dark-shipped crude oil trade flows worldwide and detect unauthorized ship-to-ship transfers. From 2017 to 2023, dark ships transported an estimated 7.8 million metric tons of crude oil monthly – 43% of global seaborne crude exports – with China absorbing 15%. These sanctioned flows offset recorded declines in global oil exports but create distinct economic shifts. The U.S., a net oil exporter, faces lower oil prices but benefits from cheaper Chinese imports, driving deflationary growth. The EU, a net importer, contends with rising energy costs yet gains from Chinese demand, fueling inflationary expansion. China, leveraging discounted oil, boosts industrial output, propagating global economic shocks. Our findings expose dark shipping’s central role in reshaping oil markets and macroeconomic dynamics. |
| Keywords: | dark shipping, oil sanction, satellite data, clustering analysis, LP |
| JEL: | C32 C38 E32 Q43 R40 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2025-12 |
| By: | Branimir Jovanović (The Vienna Institute for International Economic Studies, wiiw); Sonja Stojadinović |
| Abstract: | This note examines the grants and loans provided by the European Union (EU) and China to the Western Balkan economies. The EU remains dominant in grant funding, with annual Instrument for Pre-accession Assistance (IPA) grants averaging 0.8% of the region’s GDP, far above the 0.02% of GDP from Chinese grants. In terms of loans, however, China has nearly caught up with the EU. On an annual basis, the EU has committed loans equal to approximately 1.5% of the region’s GDP, while China has provided loans in the amount of 1.2%. Notably, in Serbia, China’s loan portfolio now exceeds the size of the EU’s. EU loans are cheaper and more transparent but come with stricter conditions for implementation and requirements for institutional reforms. In contrast, Chinese loans are more flexible and quicker to implement, making them appealing to Western Balkan politicians. However, this flexibility comes at a cost, as Chinese loans are significantly more susceptible to corruption, often deliver questionable quality, and have been linked to various drawbacks, such as workers’ rights violations and environmental degradation. |
| Keywords: | EU, China, Western Balkans, grants, loans, investment |
| JEL: | F21 F35 H81 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:wii:pnotes:pn:92 |
| By: | BROADBERRY, Stephen; FUKAO, Kyoji; GUAN, Hanhui |
| Abstract: | Comparing the major Asian economies of China, India and Japan without taking account of variations in size suggests that the Asian Little Divergence began in the eighteenth century when Japan overtook first India and then China. However, the Great Divergence debate has focused on when the leading regions of the declining countries first fell behind and there was significant regional variation in GDP per capita in all three countries. Allowing for regional variation significantly changes the dating of the Asian Little Divergence: (1) In China, the Yangzi Delta, with a population about the same size as the whole of Japan, did not fall behind until around the time of the Meiji restoration in 1868. (2) In Japan, the Kinai region forged ahead of the Yangzi Delta around 1800. (3) In India, Mysore remained behind the Yangzi Delta throughout the period 1600-1870 and therefore has less significance for the timing of the Asian Little Divergence. |
| Keywords: | Regions, GDP per capita, Asia, Little Divergence |
| JEL: | N15 N95 O47 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:hit:hituec:764 |
| By: | Behnaz Minooei Fard; Giovanni Di Bartolomeo; Willi Semmler |
| Abstract: | This study analyzes the dynamics of the global rare earth element (REE) market, with a focus on China's dominant role as the primary supplier, which is crucial for the energy transition and digitalization. Using a game-theoretic approach, the research examines a potential duopoly market structure that may emerge over time, as well as potential shifts in supply from China to other countries in this scenario. It considers China’s low marginal costs and factors like resource extraction and discoveries. Additionally, the study examines the strategic market interactions, the role of technological advancements, and policy support in shaping market outcomes. The methodology incorporates the assumption that agents have limited foresight and use a learned value function to strategically assess outcomes based on their own and others' actions while accounting for environmental constraints. |
| Keywords: | Rare earth elements; Game theory; Duopoly; Known reserves dynamics; Policy support; Relative scarcity; NMPC; Reinforcement learning |
| JEL: | C61 C7 Q3 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:sap:wpaper:wp260 |
| By: | Peng, Liqun; He, Gang; Lin, Jiang |
| Abstract: | China has pledged to peak its carbon emissions by 2030 and achieve carbon neutrality by 2060. Decarbonizing the power system is key to achieving these targets. Pumped hydropower storage (PHS) can play a crucial role in greening China’s power system, by providing both short- and long-term energy storage, facilitating the integration of renewable energy, and maintaining grid stability. It's critical to evaluate the role of PHS in a power system with a high penetration of renewable energy sources and the amount of PHS needed to support the stability and reliability of a decarbonized power system. Our results indicate that the current PHS target (120 GW) is sufficient to balance the electricity supply and demand in the foreseeable future. However, the capacity of battery storage will witness a substantial increase between 2025 and 2050, emerging as a more economical solution to address the variability of renewable energy and accommodate demand growth. This study suggests that over-investment in PHS could lead to unnecessary electricity price inflation. Introducing market competition through an open and competitive bidding process for PHS development can more effectively control project costs and, consequently, electricity tariffs. |
| Date: | 2024–02–08 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:agrebk:qt5s56m1rm |
| By: | Qiaoyi Chen (Fudan University); Nicholas Ryan (Yale University); Daniel Yi Xu (Duke University) |
| Abstract: | We study carbon offsets sold by firms in China under the Clean Development Mechanism (CDM). We find that offset-selling firms, meant to cut carbon emissions, instead increase them by 49% after starting an offset project. In a model of firm investment decisions and offset review, we estimate that CDM firms increase emissions due to both the selection of higher-growth firms into projects (35 pp) and because offset projects themselves boost firm growth and therefore emissions (14 pp). The CDM reduces global surplus by causing damages from increased emissions four times greater than private gains from trade in the offset market. |
| Date: | 2025–03–18 |
| URL: | https://d.repec.org/n?u=RePEc:cwl:cwldpp:2434 |
| By: | Donni Fajar Anugrah (Bank Indonesia); Cicilia Anggadewi Harun (Bank Indonesia); Dian Rahmawati (Bank Indonesia); Sulistiyo Kadam Ardiyono (Bank Indonesia); Hilya Jannatul Imron (Bank Indonesia) |
| Abstract: | The global economy is currently experiencing geo-economic fragmentation, one of which is driven by the trade war between the United States (US) and China. This trade war has led to tariff increases that have significantly impacted strategic sectors, creating distortions in global supply chains. Indonesia's export dependence on the US and China makes its export performance particularly sensitive to tensions between these countries. To mitigate risks and capitalize on export opportunities arising from global geoeconomic fragmentation, this study analyzes the costs and benefits of trade cooperation and strategies for diversifying Indonesia’s export products and markets. The methods used include the Structural Match Index (SMI), Demand Index, Revealed Comparative Advantage (RCA), and the Global Trade Analysis Project (GTAP) model, based on version 9.0 data. The results indicate that the simulation of alternative cooperation with the Chinese trade bloc yields better export performance for Indonesia than the US bloc. A 95% tariff reduction simulation across all sectors shows a more significant increase in Indonesia’s export value to allied blocs. The study also identifies nontraditional export destinations with high potential as alternative markets for Indonesia, such as Canada, Mexico, Brazil, Pakistan, and South Africa. Indonesia demonstrates comparative advantages in commodities like rubber, iron, steel, and minerals, though challenges remain in improving product competitiveness in international markets. Therefore, Indonesia must enhance its manufacturing capacity and strengthen trade relations with nontraditional countries, reducing dependence on traditional markets and seizing opportunities emerging from global trade shifts. |
| Keywords: | International Trade, Export Diversification, GTAP |
| JEL: | F13 F51 O24 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:idn:wpaper:wp062024 |
| By: | Ye, Meng; Heiss, Andrew (Georgia State University) |
| Abstract: | China’s 2016 Overseas NGO (ONGO) Law is part of a larger global trend of increased legal restrictions on international nongovernmental organizations (INGOs). A growing body of research analyzes the broad effects of this crackdown on INGOs, finding a divergence in formal de jure laws and the de facto implementation of those laws. The causes and mechanisms of this divergence remain less explored. Why do authoritarian governments allow—and often collaborate—with some INGOs while harshly regulating or expelling others? What determines the openness of the practical legal operating environment for INGOs? In this paper, we use the case of China to explore how political demands to both restrict and embrace INGOs have shaped the international nonprofit sector in the five years since the ONGO Law came into effect. We argue that in an effort to bolster regime stability, governments use civil society laws as policy tools to influence INGO behavior. We find that INGO issue areas, missions, and pre-existing relationships with local government officials influence the degree of operating space available for INGOs. We test this argument with a mixed methods research design, combining Bayesian analysis of administrative data from all formally registered INGOs with a comparative case study of two environmental INGOs. Our findings offer insights into the practical effects of INGO restrictions and the dynamics of closing civic space worldwide. |
| Date: | 2025–03–27 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:fzc9y_v1 |