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on China |
| By: | Fabrice Defever; Emanuel Ornelas |
| Abstract: | We study how the end of the quota system for textiles and clothing products in the American and European markets on January 1, 2005, affected China's exports to third countries, where policy was unchanged. Using a difference-in-differences approach, we find that the number of Chinese firms exporting previously restricted products to third countries increased sharply after quota removal. The expansion involved many private firms that exported to neither US-EU markets before nor after 2005. This indicates that the policy shock enhanced China's role as an export base. Conversely, protectionist shifts in large economies would likely generate sizeable negative third-market effects. |
| Keywords: | import quotas, export entry, China |
| Date: | 2026–04–02 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2170 |
| By: | James Giesecke; Xiujian Peng |
| Abstract: | China has experienced remarkable economic growth since its reform and opening-up in the early 1980s. Although growth has moderated as the economy has matured and undergone structural adjustment, China has maintained relatively strong performance, averaging 5-6% annually between 2010 and 2024. Using an economy-wide dynamic computable general equilibrium model of the Chinese economy, CHINAGEM, and a historical/decomposition approach, this study identifies the key drivers of growth over 2012-2017 and 2017-2022. Productivity growth emerges as the dominant driver in both periods. In contrast, declining employment exerts a negative effect, which intensifies in 2017-2022 due to a sharper contraction in labour supply associated with population ageing. External demand and a rising preference for domestically produced goods also contributed positively to growth. Looking ahead, the projected decline in China's working-age population will place sustained downward pressure on labour supply. These findings underscore the central role of productivity growth in offsetting demographic headwinds. Policies that foster technological progress and innovation, alongside investment in human capital and skills, will be critical to sustaining long-term economic growth. |
| Keywords: | Economic Growth, Decomposition, Historical simulation, CGE model, China |
| JEL: | O47 O53 C68 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:cop:wpaper:g-366 |
| By: | Thomas Klitgaard |
| Abstract: | China has spent considerable government resources to develop advanced electric technology industries, such as those that produce electric vehicles, lithium batteries, and solar panels. These efforts have spilled over to international trade as improvements in price and quality have increased the global demand for these goods. One consequence is that passenger cars and batteries have been disproportionately large contributors to the rise in the country’s trade surplus in recent years. This has not been the case, though, for solar panels, as falling prices due to a supply glut pulled down export revenues despite higher volumes. |
| Keywords: | China; exports; green technology; electric vehicles; solar panels; lithium batteries; industrial policy; electrification |
| JEL: | F1 O3 |
| Date: | 2026–03–23 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednls:102920 |
| By: | Alicia Garc¡a Herrero (Natixis); Rajeswari Sengupta (Indira Gandhi Institute of Development Research) |
| Abstract: | Despite strong GDP growth and favourable demographics, India faces an impending jobs crisis. A large share of the workforce remains stuck in low-productivity agriculture, while new entrants are increasingly absorbed into the informal sector. By contrast, China's rapid growth was driven by manufacturing-led, export-oriented industrialisation, supported by substantial foreign direct investment and sustained technology transfer. India's manufacturing sector remains relatively small, and formal employment is concentrated in skill-intensive services. This paper compares the development trajectories of India and China and identifies four underutilised levers in India: manufacturing, goods exports, manufacturing-oriented foreign direct investment, and innovation. While each remains underdeveloped, together they offer a pathway to more labour-intensive and durable growth. Given the need to create 8-10 million jobs annually, job creation must become an explicit policy priority. We argue that this requires greater trade openness, particularly with Asia and Europe, to integrate India into global value chains; deeper labour market reforms, including effective implementation of the new labour codes; and stronger innovation and skills ecosystems aligned with industrialisation. Absent such structural shifts, India's current pattern of jobless growth risks turning its demographic dividend into a long-term liability. |
| Keywords: | GDP growth, Jobs, Exports, Foreign Direct Investment, Manufacturing, Innovation |
| JEL: | E2 E6 F1 F4 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:ind:igiwpp:2026-002 |
| By: | Yao Liang; Xin Weng; Tingting Sun |
| Abstract: | This study provides a comprehensive strategic analysis of infrastructure energy investment in the context of the global low-carbon transition. Integrating quantitative panel data analysis across 15 countries (2010-2023), detailed case studies of Germany, the United States, China, and the European Union, and scenario simulations through 2050, we examine how policy, technology, and economic factors interact to determine investment effectiveness. Using panel data from 15 countries over the period 2010-2023, we find that renewable energy investment is systematically associated with higher economic growth and lower carbon emissions after controlling for country and year fixed effects. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.26702 |
| By: | Junyuan Chen; Carlos Góes; Marc-Andreas Muendler; Fabian Trottner |
| Abstract: | Global trade flows and supply chains adjust gradually. Empirical estimates of the trade elasticity for the short run are a fraction of those for the long run and suggest that trade is subject to substantive dynamic frictions. We develop a tractable framework that provides microfoundations for trade adjustment and rationalizes estimation of a time-varying trade elasticity. The model features forward-looking firms facing sticky sourcing choices and nests a version of the Eaton-Kortum model as a limiting long- run case. We calibrate the model and quantify the impacts of two events: the 2004 EU Eastern enlargement (an anticipated change) and the 2018 US-China trade war (an arguably unanticipated change). Our findings suggest that sourcing frictions and anticipation effects alter the time pattern of specialization, can result in short-term welfare losses but long-term gains, and can drive marked trade adjustments before anticipated shocks occur. |
| JEL: | C51 F11 F14 F17 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35013 |
| By: | Junyuan Chen; Carlos Góes; Marc-Andreas Muendler; Fabian Trottner |
| Abstract: | Global trade flows and supply chains adjust gradually. Empirical estimates of the trade elasticity for the short run are a fraction of those for the long run and suggest that trade is subject to substantive dynamic frictions. We develop a tractable framework that provides microfoundations for trade adjustment and rationalizes estimation of a time-varying trade elasticity. The model features forward-looking firms facing sticky sourcing choices and nests a version of the Eaton-Kortum model as a limiting long-run case. We calibrate the model and quantify the impacts of two events: the 2004 EU Eastern enlargement (an anticipated change) and the 2018 US-China trade war (an arguably unanticipated change). Our findings suggest that sourcing frictions and anticipation effects alter the time pattern of specialization, can result in short-term welfare losses but long-term gains, and can drive marked trade adjustments before anticipated shocks occur. |
| Keywords: | international trade, estimation of the elasticity of trade, dynamic trade adjustment, staggered sourcing decision, 2004 EU enlargement, US-China trade war |
| JEL: | F11 F14 F17 C51 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12570 |
| By: | Henrekson, Magnus; Sandström, Christian; Stenkula, Mikael |
| Abstract: | * Since the 2008 financial crisis, environmental policy has shifted away from simply managing negative externalities and gradually converged with regular industrial policy. Various 'green deals' have been launched around the world with the aim of achieving a combination of economic and environmental development. * Economists, such as Mariana Mazzucato, have gained traction among European policymakers, arguing that governments should not only focus on correcting potential market failures but should also formulate and finance comprehensive public missions to steer innovation towards proposed solutions and technologies. * In 2020, the European Union launched its Green Deal. Six years later, investments in hydrogen-based projects have collapsed, and electricity prices are twice as high as in the U.S. and China. * The United Kingdom has followed a similar trajectory, with comparable results in terms of declining industrial competitiveness and soaring electricity prices. * So far, the EU Green Deal has proved to be expensive, fragmented and ineffective. However, this does not mean that there are no alternative ways to reconcile economic development with environmental considerations. * The green transition should be guided by market price signals rather than by directional industrial policy. Such a framework could be achieved with a) a uniform and comprehensive emissions trading system that in principle covers the entire economy, and b) technology neutrality on the part of government without sector targets, industry support, or industry-specific subsidies. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ieadps:339593 |