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on China |
| By: | Nobuaki YAMASHITA; Shiro ARMSTRONG |
| Abstract: | Using comprehensive trade transaction and firm-level data from 2015-2023, we examine how Australian firms adjusted import patterns following the US-China trade war. Our method compares firms with high versus low exposure to products subject to Trump tariffs in 2018-2019, measured by their pre-war import patterns. We find that highly exposed Australian firms increased their import dependency on Chinese goods in subsequent years. This suggests the US-China trade war paradoxically reinforced rather than reduced Australia's reliance on Chinese imports, contrary to expectations of supply chain diversification amid deteriorating geopolitics. A trade war unleashed by the Trump administration, intended, in part, to diminish China’s global trade position and encourage US allies to diversify their economic relationships away from China, may have had the paradoxical and unintentional effect of deepening Australia’s reliance on Chinese imports. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25117 |
| By: | Zhou, Haiwen |
| Abstract: | Evolution of institutions in selecting government officials in ancient China reflected efficiency considerations and increased power concentration in the hands of the ruler. Selecting government officials in ancient China became more rule-based over time, and standardization and centralization were some key features of this process. In this dynamic model, a higher volume of transactions shown as the number of candidates needed to be evaluated leads to institutionalization which has a higher fixed cost but a lower marginal cost in processing each transaction. In the steady state, a ruler with a more encompassing interest chooses a higher level of institutionalization. The impact of a change in the level of elite power on the level of institutionalization is sensitive to the relative power of state versus society. |
| Keywords: | Institutionalization, institutional evolution, rule-based governance, Chinese history, political economy |
| JEL: | N45 O53 P40 |
| Date: | 2025–10–22 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126588 |
| By: | Xue, Melanie |
| Abstract: | This paper evaluates the usefulness of crowd-sourced Chinese genealogical data for quantitative research in demography and economic history. I first examine whether genealogies—despite well-known selection biases—produce demographic patterns consistent with established historical knowledge of China. Comparisons with existing studies show that aggregate population-growth trends and sex ratios over time align reasonably well with established demographic and historical findings, suggesting that genealogies, though selective, capture coherent and interpretable patterns. Building on these plausibility checks, the paper argues that the main value of genealogical data lies in their scalability and temporal depth, particularly as crowd-sourced digitization vastly expands the number of available records. These features make genealogies well suited to analyses that leverage variation across regions and over time, an approach that is central in modern economic history. |
| Keywords: | crowd-sourced genealogies; China; migration; sex ratios |
| JEL: | J11 J13 N10 N35 |
| Date: | 2026–01–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130282 |
| By: | Rodríguez-Clare, Andrés; Ulate, Mauricio; Vasquez, Jose |
| Abstract: | We present a dynamic quantitative trade and migration model that incorporates downward nominal wage rigidities and show how this framework can generate changes in unemployment and labor participation that match those uncovered by the empirical literature studying the “China shock.” We find that the China shock leads to average welfare increases in most U.S. states, including many that experience unemployment during the transition. However, nominal rigidities reduce the overall U.S. gains by around two thirds. In addition, there are 18 states that experience welfare losses in the presence of downward nominal wage rigidity that would have experienced gains without it. |
| JEL: | R14 J01 J1 |
| Date: | 2025–11–26 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:127629 |
| By: | Ziegler, Marc; Weck, Thomas |
| Abstract: | The evolving EU-China economic relationship reflects a shift from cooperation to systemic rivalry, driven by China’s increasingly assertive geoeconomic posture and the European Union’s evolving focus on economic security. This article examines the EU's collective securitisation efforts, applying a political and legal lens to assess challenges and opportunities. While legal tools and strategic policy shifts in favour of “de-risking” signify progress, the Union faces substantial hurdles in aligning Member States’ diverse interests and perceptions of China as a threat. Drawing on the evolution of EU-China relations in the past three decades, the analysis underscores the need for enhanced policy coherence and pragmatic measures to address economic security risks. The findings advocate leveraging existing Treaty provisions to foster resilience and strategic autonomy, emphasizing that coordinated action is critical to navigating the complexities of EU-China relations. |
| Keywords: | collective Securitisation; de-risking; economic security; EU foreign policy; EU-China relations |
| JEL: | J1 |
| Date: | 2025–10–07 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130467 |
| By: | Wenyin CHENG; Tao LIANG; Bo MENG; Hongyong ZHANG |
| Abstract: | China is now the world’s largest exporter, with average export prices ranging from only 40% to 60% of those in other countries. This paper examines whether industrial subsidies can explain China’s export performance and global competitiveness. Using firm-level subsidy data and inter-provincial input-output tables with firm ownership information, we measure both direct subsidies and indirect subsidies from upstream industries. Our analysis yields several key findings: (1) Direct subsidies significantly increase both Chinese firms’ probability of exporting (extensive margin) and their export volume (intensive margin), with a larger effect on the intensive margin. (2) Notably, indirect subsidies (especially those from first-tier upstream industries) also play an important role in boosting exports. (3) Both domestic and foreign-invested firms benefit from direct subsidies, though the effects of upstream subsidies vary by firm ownership. (4) Contrary to expectations, subsidies do not lead to lower export prices. Instead, both direct and indirect subsidies are positively associated with product quality, thereby reducing quality-adjusted prices. The mechanism analysis suggests that export growth and quality upgrading are driven by (i) direct subsidies through increased R&D and imported inputs, and (ii) indirect subsidies through domestic intermediate inputs. Overall, the findings indicate that government support may promote quality upgrading and strengthen the global competitiveness of Chinese exporters. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25119 |
| By: | Michele Bertani (Ca’ Foscari University of Venice); Yanjiao Chen (Henan Normal University) |
| Abstract: | This paper comparatively analyzes the long-term care (LTC) systems in China and Italy, two countries experiencing profound demographic shifts with rapidly aging populations. While both nations face the common challenge of providing sustainable and adequate care for an increasing number of older adults, their regulations and policy responses diverge significantly, shaped by distinct socio-economic contexts, welfare regimes, and cultural norms. Italy, representing a Southern European welfare model, has historically relied on a fragmented system characterized by familial support, supplemented by cash-for-care benefits and a significant influx of migrant care workers. In contrast, China is in the process of constructing its LTC system, moving from a tradition of family-based care towards a state-led, multi-pillar framework that includes social insurance experiments, private sector engagement, and the integration of health and social care. This paper examines the evolution of LTC policies in both countries, analyzing the drivers behind their different strategic choices. By contrasting the Italian model of "familism by default" with China's top-down, experimental approach, we highlight the respective strengths and weaknesses of each system. The analysis concludes that while no single model is universally applicable, a cross-national comparison offers valuable insights for policymakers grappling with the global challenge of providing sustainable and equitable long-term care in an aging world. |
| Keywords: | Long-term care, China, Italy, Older adults, Governance, Social policies, Welfare systems |
| JEL: | H51 H53 I18 I38 J14 J18 Z18 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ven:wpaper:2025:27 |
| By: | Larsen, Mathias; Jackson, James |
| Abstract: | Climate change has become a concern for central banks, at least rhetorically. Questioning whether the banks walk the talk, a proliferating research agenda covers mandates, motives, expertise, and independence. Yet, it remains unappreciated that the only central bank with actual green monetary policies is not independent, namely, the People’s Bank of China (PBoC). Here, we explore the relation between independence and climate action through an in-depth, interview-based study of the PBoC, in comparison with the U.S. Federal Reserve, the European Central Bank, and the Bank of England. First, we find that Western central banks indirectly promote financial institutions to consider climate issues, whereas the PBoC, most centrally, directly intervenes through monetary policy. Second, by examining legal independence, mandates, and government influence, we find that independence constrains Western central banks, while non-independence forces the PBoC to act. From this, we discuss how the climate era requires revisiting central bank independence. |
| Keywords: | China; finance; environment; governance; state |
| JEL: | H11 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130460 |
| By: | Chihiro Shimizu; Xiaoying Deng |
| Abstract: | We develop a structural framework in which cross-border commercial real estate prices reflect fundamentals, a macro-valuation component, and an endogenous nationality-specific bargaining wedge. Building on recent work on the interest rate-growth differential, safe-asset shortages, and global capital-flow frictions, we show that capital controls, geopolitical tensions, and financial-market depth shift investors' outside options and beliefs, generating systematic pricing differentials across nationalities. Using 1, 113, 349 global commercial property transactions from 172 countries, we provide the first large-scale empirical estimates of these bargaining wedges. After controlling for detailed property characteristics and multi-layer fixed effects, Chinese investors pay persistent premia -- 18-22 percent on average and up to 21.7 percent in offshore markets -- while U.S. investors obtain 3-4 percent discounts. These wedges respond sharply to macroprudential and geopolitical regimes: China's capital-control tightening compresses premia, whereas the U.S.-China trade war increases them for both sides. Our results reveal that nationality-specific bargaining power is an equilibrium outcome shaped jointly by macroeconomic valuation forces, regulation, and geopolitical shocks. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:tcr:wpaper:e218 |
| By: | Ziran Ding; Adam Hal Spencer; Zinan Wang |
| Abstract: | Amid ongoing geoeconomic tensions, industrial policy has emerged as a prominent tool for policymakers. What are the dynamic and welfare effects of these policies? How does the short-sightedness of policymakers influence their choice of instruments? What are the distributional consequences of these protectionist measures? We address these questions with a dynamic two-country general equilibrium framework that incorporates ï¬ rm heterogeneity, trade, and the offshoring of tasks. By calibrating the model to the contexts of the US and China, we explore the effects of three popular industrial policies: import tariffs, domestic production subsidies, and entry subsidies. Our findings indicate that, from an initial state free of interventions, myopic policymakers are incentivized to subsidize production, while more forward-looking ones favor imposing import tariffs. Although all of these policies initially reduce wage inequality, some result in aggregate welfare losses, either in the short run or the long run. |
| Keywords: | macroeconomic dynamics, firm heterogeneity, trade, trade-in-tasks, industrial policies, welfare, global value chains |
| JEL: | F23 F41 F51 F62 L51 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2025-67 |
| By: | Alden, Chris; Ocquaye, Nathaniel |
| Abstract: | Contrary to the conventional notion that African agency outside of the state is marginal if not irrelevant, this paper argues that it is ‘local patrons’ in Africa who are actually the most powerful determinants of the success of Chinese enterprises in Africa. These ‘local patrons’ exact financial resources from the Chinese in exchange for their services as brokers between state officials. Specifically, their ‘informal connections’ to local state authorities enables them to insure the Chinese firms against official state prosecution/demands as well as facilitate related bureaucratic procedures. Using the case of the Chinese construction firms operating in Ghana, we will investigate the challenges experienced by Chinese firms entering into new markets and the strategies utilised by them to address and mitigate risk in their search for profit, chief amongst them the employment of ‘local patrons’ to serve as brokers with state officials. This relocation of agency, drawing from scholarship by Mohan, Lampert and Soule-Kohndou as well as the empirical materials based on substantive fieldwork, provides new insights into terms of engagement with local actors that form a bonded relationship facilitating integration of Chinese enterprises into the African political economy. |
| Keywords: | China-Africa; African agency; Chinese construction firms; local patrons; middlemen |
| JEL: | R14 J01 J1 |
| Date: | 2024–06–17 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130391 |
| By: | Fabiani Josefina (European Commission - JRC); Fernández Cruzado Ana (European Commission - JRC); De Prato Giuditta (European Commission - JRC) |
| Abstract: | This study underscores the EU's progress and challenges in the twin transition, offering insights into the EU's competitive position and potential areas for policy action. Despite twin patents filed by EU players increasing on average of 14% annually since 2009, the number of patents is still far behind those from China and the US, clear leaders in twin technologies innovations. China and the US host also most co-applicants for patent filings of EU-based players, and the study underscores potential dependencies on Chinese partnerships. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc142637 |
| By: | Idomoto, Yuji |
| Abstract: | China’s rise is widely viewed as a destabilizing force in East Asia, prompting concerns of heightened military competition or even an arms race. This paper challenges such assumptions by reexamining traditional security threats through the lens of realist theory. Drawing on offensive and defensive realism, it argues that China’s capabilities and revisionist intentions—while significant—do not warrant the level of alarm often portrayed. Regional capability balances, geographic buffers, and the high costs of territorial aggression constrain China’s ability to project traditional military power. Moreover, China’s increasing reliance on gray-zone tactics and geoeconomic tools suggests a strategic shift away from direct military confrontation. Empirical analysis reveals that East Asian states’ military responses remain moderate, especially when compared globally. Taken together, this study offers a more calibrated understanding of East Asia’s evolving security landscape. |
| Keywords: | Social and Behavioral Sciences, East Asia, East Asia security, defensive realism, offensive realism, Chinese gray-zone tactics |
| Date: | 2025–12–16 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:globco:qt5g2051pg |
| By: | Meng Yu Ngov; Pierre-Louis Vezina; Trang Thu Tran; Gaurav Nayyar |
| Abstract: | When countries subsidize the production and innovation of green goods, does it make it easier for others to join their value chains? We explore this question using Viet Nam’s solar panel industry as a case study, using firm-to-firm transaction data to map out its value chain. We find that Viet Nam imports solar parts and components at substantially lower prices from subsidizing countries: about 30% cheaper than from non-subsidizing countries and nearly 50% cheaper from China, where all key inputs are subsidized. We also find that Chinese FDI firms - which account for around 75% of exports and 50% of jobs among all solar producers - export solar panels at around 38% cheaper than other solar panel exporters in Viet Nam. Lastly, we find that local suppliers of solar panel parts and components linked to these firms experience positive productivity gains. Together, the results are consistent with subsidy spillovers that operate through cheaper intermediate inputs, transmission of cost advantage through multinational production networks, and productivity spillovers to local firms. |
| Keywords: | global value chains, green subsidies, FDI |
| JEL: | F14 F23 Q42 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:csa:wpaper:2025-14 |
| By: | Katharina Ledebur (Supply Chain Intelligence Institute Austria); Ladislav Bartuska (Supply Chain Intelligence Institute Austria); Klaus Friesenbichler; Peter Klimek (Supply Chain Intelligence Institute Austria) |
| Abstract: | The automotive industry is undergoing a profound transformation, driven by the electrification of powertrains, the rise of software-defined vehicles, and the adoption of circular economy concepts. These trends are increasingly blurring the boundaries between the automotive sector and other industries. The pace of adaptation to electrification varies considerably between regions and firms. Unlike internal combustion engine (ICE) production, where mechanical capabilities dominated, competitiveness in electric vehicle (EV) production increasingly depends on expertise in electronics, batteries, and software. This study investigates whether and how firms' ability to leverage cross-industry diversification contributes to their competitive advantage in this evolving landscape. We develop a country-level product space covering all industries, and an industry-specific product space covering over 900 automotive components. This allows us to identify clusters of parts which are exported together, revealing shared manufacturing capabilities. Closeness centrality in the country-level product space, rather than simple proximity, is a strong predictor of where new comparative advantages are likely to emerge. First, we examine this relationship across all industrial sectors to establish general patterns of path dependency, diversification and capability formation. Then, we focus specifically on the electric vehicle (EV) transition. It is argued that new strengths in vehicles and aluminum products in the EU will generate 5 and 4.6 times more EV-specific strengths, respectively, than other EV-relevant sectors over the next decade. In contrast, these sectors are expected to generate only 1.6 and 4.5 new strengths, respectively, in already diversified China. A different pattern emerges when these country-level results are compared to the firm-level product space. Countries such as South Korea, China, the USA and Canada show the greatest potential for diversification into EV-related products. Established producers in the EU are likely to come under pressure. These findings suggest that the success of the automotive transformation will depend on the ability of regions to mobilize existing industrial capabilities, particularly in related sectors such as machinery and electronic equipment. |
| Keywords: | diversification, car industry, automotive, electric cars, supply chains, network, product space, regions, firms, transition, complexity |
| Date: | 2025–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:wfo:wpaper:y:2025:i:717 |
| By: | Lykke E. Andersen (SDSN Bolivia); Marcelo Delajara (Anker Research Institute); Richard Anker (Anker Research Institute); Martha Anker (Anker Research Institute) |
| Abstract: | This report provides updated estimates of family living expenses and living wage for workers in Shanghai, China. The update for 2025 takes into account inflation and changes in payroll deductions since the original Anker living wage study carried out in August 2015 (Yuan, Ke, Jing & Feng, 2015). The update also reflects revised expectations for the normative standards of a basic but decent living for a typical family, driven by a decade of rapid economic growth and a near doubling of average household consumption per capita. |
| Keywords: | Living costs, living wages, Anker Methodology, China |
| JEL: | J30 J50 J80 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:iad:glliwa:250445 |
| By: | Tao Liu (Central University of Finance and Economics); Dong Lu (Renmin University of China); Liang Wang (University of Hawaii) |
| Abstract: | There have been two competing views on the structure of the international monetary system: one sees it as a unipolar system with a dominant currency, such as the U.S. dollar, while the other argues that a multipolar system has been the rule, not the exception. We propose a unified theoretical framework to reconcile these two views. In a micro-founded monetary model, we examine the interactions of two essential roles played by international currencies, the medium of exchange and the store of value, and highlight the importance of abundant safe asset supplies. When the two roles reinforce each other, a unipolar equilibrium exists. However, when one currency is unable to serve as sufficient safe assets for international trade transactions, the two roles work against each other, and agents have the incentive to diversify their portfolio, giving rise to a multipolar system. The effects of monetary policy, fiscal policy, and their combinations crucially depend on the total supply of safe assets and the relative importance of the two functions of international currencies. The structure of the international monetary system could be influenced by various policies such as monetary policy, fiscal policy, and financial sanctions. A calibrated model shows that, all else equal, USD could lose its dominance if the US fiscal capacity deteriorates by 34\% or the US economy size shrinks by 32%. |
| Keywords: | International Currency, Money, Multipolar, Safe Assets, Unipolar |
| JEL: | E42 E52 F33 F40 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:hai:wpaper:202504 |