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on Transition Economics |
| By: | Fungacova, Zuzana (BOFIT); Korhonen, Iikka (BOFIT) |
| Abstract: | This paper provides an overview of the Chinese banking sector, which has expanded tremendously over the past two decades. We first describe aggregate developments of the sector and compare them to the situation in other countries. Also, various financial institutions that operate in China are analyzed. Our results confirm that the Chinese banking sector is truly in a class of its own, especially given the level of China’s economic development. Despite significant reforms, the state and various public organizations still own controlling shares in the largest commercial banks. The state is also present on the borrowers’ side; it is estimated that about half of state-owned commercial bank lending still goes to state-controlled companies. In this way, the banking system can serve as an important policy tool. Another distinctive feature of the Chinese banking sector is the variety of its banking institutions. New types of banking institutions, especially those serving rural areas, are emerging all the time. While equity and debt markets are still tiny relative to the banking sector and their importance as sources of financing of investment remain minor, they have evolved rapidly in recent years. |
| Keywords: | China; banking sector; state banks |
| JEL: | G21 G28 P34 |
| Date: | 2011–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2011_032&r=tra |
| By: | Zhang, Chuanchuan |
| Abstract: | Retirement system reforms such as postponing retirement age in law are needed in China because of its rapid population aging. The overquick aging will result in both shortage of labor force supply and incubus of the social security system. The Chinese government acknowledged the negative influences of population aging, but finally decided to maintain the retirement age in law unchanged. The reason, as claimed by the policy makers and many socio-economic scholars, is postponing retirement age in law in China will crowd out youth employment. Unfortunately, no empirical evidences are provided, although the claim is critical to the potential retirement system reform. In this paper, we firstly address the validity of this claim. Using micro data from China’s 1990 and 2000 census and the 2005 1% population sample survey, we provide the first piece of evidence on the relationship between elderly employment and youth employment in China. Our OLS estimation results suggest that employment rates of younger persons are positively rather than negatively associated with employment rate of older persons. We further tried to identify a causal relationship by using two-way fixed effects and TSLS estimation strategies and found results consistent with our OLS estimation. Finally, we examine whether employment of older persons hurts the youth at the intensive margin by estimating the impact of elderly employment on younger workers’ monthly wage and still found a positive rather than negative effect. In short, the claim that postponing the retirement age will hurt the youth cannot be supported by empirical evidence. Although our empirical results are tentative, we view this paper as an important try to provide the first piece of evidence on the potential impact of retirement reform on youth employment and as suggesting further empirical studies on the claim that postponing retirement age will hurt the youth. |
| Keywords: | Retirement Reform; Elderly Employment; Youth Employment |
| JEL: | H5 J1 J2 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:37221&r=tra |
| By: | Junsen Zhang (Chinese University of Hong Kong); Mark Rosenzweig (Economic Growth Center, Yale University) |
| Abstract: | Data from two surveys of twins in China are used to contribute to an improved understanding of the role of economic development in affecting gender differences in the trends in, levels of, and returns to schooling observed in China and in many developing countries in recent decades. In particular, we explore the hypothesis that these phenomena reflect differences in comparative advantage with respect to skill and brawn between men and women in the context of changes in incomes, returns to skill, and/or nutritional improvements that are the result of economic development and growth. |
| Keywords: | schooling, gender, twins, China |
| JEL: | J24 J16 I15 I25 O15 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:egc:wpaper:1008&r=tra |
| By: | Tanja A. Börzel; Digdem Soyaltin |
| Abstract: | Research on Europeanization and domestic change has moved south-eastwards and was provided with another real-world experiment when it has meet with Turkey. This paper explores to what extent Europeanization approaches travel to Turkey, which does have a membership perspective that looks, however, ever less credible. The first part outlines the main findings of research on ‘External Europeanization’ focusing on factors that have limited or at least qualified the domestic impact of the EU in the Central and Eastern European (CEE) and Western Balkan (WB) accession countries. The paper, then, discusses to what extent Europeanization approaches need further qualification when applied to Turkey, which squares on democracy with the Western Balkans (with the exception of Croatia), but whose statehood is less limited. We argue that existing Europeanization approaches, largely, account for the overall moderate degree of Europeanization in Turkey. Yet, selective and differential domestic changes are mostly related to the extent to which EU conditionality helps domestic actors gain or hold political power and push their own political agenda. The paper concludes by summarizing the major implications Turkey’s accession to the EU has for Europeanization approaches and discussing why Turkey is not a case sui generis. |
| Keywords: | East-Central Europe; East-Central Europe; EU-South-Eastern Europe; EU-South-Eastern Europe; Turkey; neighbourhood policy; governance |
| Date: | 2012–03–02 |
| URL: | http://d.repec.org/n?u=RePEc:erp:kfgxxx:p0036&r=tra |
| By: | Diagne, Mame Fatou; Ringold, Dena; Zaidi, Salman |
| Abstract: | Using data from the 2010 Life in Transition Survey, this paper examines the levels of citizens'satisfaction with public service delivery in Europe and Central Asia and identifies some factors that may help explain variation in utilization and levels of satisfaction with service delivery. It finds satisfaction with public service delivery in Europe and Central Asia to be relatively high, and, despite the adverse economic and social impact of the recent global economic crisis, to have risen since 2006 in most countries in the region. However, the level of satisfaction with public service delivery in Eastern European and Central Asian countries in 2010 remains lower than in Western European comparator countries. Although the Life in Transition Survey does not provide specific objective measures of service delivery quality and efficiency, the data provide three important clues that may help explain why satisfaction is lower in transition countries than in western comparators: (i) relatively higher utilization of public services in Eastern European and Central Asian countries, (ii) relatively higher reported prevalence of unofficial payments, and (iii) relatively underdeveloped mechanisms for grievance redress. |
| Keywords: | Population Policies,Public Sector Corruption&Anticorruption Measures,Governance Indicators,Housing&Human Habitats,E-Government |
| Date: | 2012–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5994&r=tra |
| By: | Marek Dabrowski; Svitlana Taran |
| Abstract: | The negotiations on the Association Agreement (AA) between the European Union (EU) and Ukraine, including its trade component, i.e., the Deep and Comprehensive Free Trade Agreement (DCFTA), were completed in December 2011. The agreement is practically ready to be signed, if the EU’s concerns related to the deteriorating political freedoms in Ukraine are addressed (especially the jailing of former Prime Minister Yulia Timoshenko). The ball is now in Ukraine’s court and the correct and rapid response is crucial for the country’s future. Both the AA and the DCFTA offer Ukraine an opportunity to deepen its political and economic relations with the EU and modernize its own economy and state institutions. |
| Keywords: | Trade, economic integration and globalization, Eastern Europe, Caucasus and Central Asia, Ukraine, FTA |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:sec:ebrief:1206&r=tra |
| By: | Shahin Vallée |
| Abstract: | As Chinaâ??s economic might grows, its standing and that of its currency in the international monetary system become increasingly pressing issues. The crisis seems to have reminded the Chinese authorities of the dangers of a unipolar monetary system, and they have therefore accelerated their plans to internationalise the renminbi (RMB). The goal of this internationalisation strategy is not clear and China has not defined publicly the monetary system it aims to achieve. Nevertheless, there are more and more signs that the internationalisation of the RMB is progressing, notwithstanding major challenges. Conventional wisdom and the majority of the literature posits that the RMB will not succeed in its internationalisation process until China fully opens its capital and financial accounts, makes its exchange rate flexible and liberalises its financial sector. These three obstacles are real but circumventable. However, if China's internationalisation strategy follows a path that concentrates on overcoming immediate challenges in order to raise the status of the RMB to that of a second-tier world currency, the Chinese authorities will still have to undertake substantial reforms if they intend to place the RMB on a footing comparable to the dollar or the euro. |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:bre:wpaper:715&r=tra |
| By: | Guilhem Fabre (CCJ - Chine, Corée, Japon - CNRS : UMR8173 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Université Paris VII - Paris Diderot); Stephane Grumbach (LIAMA - NETQUEST - CIRAD - CNRS - INRA - INRIA - Chinese Academy of Science (CAS) - Institute of Automation, Chinese Academy of Sciences) |
| Abstract: | R&D and innovation have become much more strategic than ever before for the growth of China as well as for its global societal upgrade. The Chinese authorities have designed an innovation strategy to face new economic and social challenges. The first part of the paper is focused on the emergence of the policy, in the 2006-2020 Plan for S&T, with a historical perspective explaining the legacy of the past in today's choices. In the second part, we illustrate China's catching up strategy through four sectors (high-speed trains, aeronautics, clean energy, IT) and discuss its potential impact on the world industry. |
| Keywords: | Research and development; innovation; high-speed trains; aeronautics; clean energy; information technology ; China |
| Date: | 2012–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00677171&r=tra |
| By: | Dennis Best; Ellina Levina |
| Abstract: | This paper is the first IEA analysis that focuses on country-specific trends, opportunities and challenges for carbon capture and storage (CCS). It follows previous IEA publications on CCS and studies on cleaner coal and advanced coal technologies. The paper benefitted from significant contributions and support from the China Coal Information Institute (CCII) of the State Administration of Work Safety (SAWS), and The Climate Group China. According to IEA analysis, if there are no major policy changes, carbon-intensive coal and other fossil fuels will continue to play a significant role in meeting future energy needs, both in China and globally. CCS is one technological option available to reduce carbon dioxide (CO2) emissions from the use of fossil fuels. CCS offers the opportunity to meet climate change objectives while providing energy security, as part of a portfolio of options including energy efficiency, renewable energy, nuclear energy, more efficient coal technologies and fuel switching from coal to gas. To meet global energy challenges associated with CO2 emissions, development and deployment of all available technologies will be necessary to achieve a more sustainable future. This paper discusses the status of CCS in China, providing updates on past activities in research and development (R&D), on current projects underway, and an overview of potential and challenges for CCS development in China. By exploring China’s energy and emission trends and pathways, this paper analyses China’s current CCS-related activities and policies, and options for financing CCS. The paper also provides perspectives on CCS from various Chinese stakeholders, and examples of key CCS activities with details on specific projects, and information on the regulatory and policy environment, as well as international co-operation related to CCS in China. |
| Date: | 2012–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ieaaaa:2012/5-en&r=tra |
| By: | Bidani, Benu; Fatou Diagne, Mame; Zaidi, Salman |
| Abstract: | This paper analyzes the subjective impact of the global economic crisis on households in Europe and Central Asia and relates subjective impacts to consumption, actual shocks, and coping strategies, using the 2010 Life in Transition Survey. Two-thirds of respondents in Europe and Central Asia report their household was subjectively affected, primarily through the labor market. The findings underscore the limitations of cross-country comparisons of subjective perceptions, due to reporting biases. Within countries, richer households felt a decline in their relative income position, consistent with evidence from household budget surveys that the crisis reduced the consumption of the middle and upper classes. But the analysis also finds that poorer households report being (subjectively) affected by the crisis more. Differences in the feasibility of coping strategies may help explain variations in subjective perceptions: the poorest were forced to reduce their staple food consumption and health spending, and tended to depend on public safety nets. Richer households had more options to cope, pursuing so-called"active strategies"(such as increasing their labor supply), borrowing, and cutting spending on non-essentials. Transition countries differed significantly from western European comparator countries in that public safety nets had lower coverage, private safety nets and informal insurance mechanisms could not meet the shortfall in income, and a large proportion of their populations reduced the consumption of basic necessities. The paper finds subjective perceptions of the impact of the crisis to be relevant to socio-political outcomes: the harder the impact, the lower the life satisfaction level and the more negative the assessment of government performance. |
| Keywords: | Safety Nets and Transfers,Housing&Human Habitats,Rural Poverty Reduction,Labor Policies,Consumption |
| Date: | 2012–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5995&r=tra |
| By: | Yiping Huang (Asian Development Bank Institute (ADBI)); Kunyu Tao |
| Abstract: | The current account surplus of the People’s Republic of China (PRC) has drawn much foreign and domestic attention. This paper focuses on the reasons and remedies for the PRC’s current account surpluses. Rather than deploying the standard explanations, we argue that asymmetric market liberalization and the related factor market distortion is the root reason for the PRC’s external imbalances. These cost distortions have artificially lowered PRC production costs, raised profits, and improved their products’ international competitiveness which has not only stimulated the economy, but also brought about severe structural risks. We completed a crude estimation for factor cost distortions in the PRC during 2000–2009 which matched its current account surpluses quite well. In order to rebalance the economy, we recommend that the PRC should adopt a comprehensive reform package focusing on removing the factor market distortions. |
| Keywords: | External Imbalances, PRC, Factor Market Distortion, current account surpluses, asymmetric market liberalization |
| JEL: | F32 O11 H24 E61 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:eab:financ:23257&r=tra |
| By: | Yiping Huang (Asian Development Bank Institute (ADBI)); Kunyu Tao |
| Abstract: | The current account surplus of the People’s Republic of China (PRC) has drawn much foreign and domestic attention. This paper focuses on the reasons and remedies for the PRC’s current account surpluses. Rather than deploying the standard explanations, we argue that asymmetric market liberalization and the related factor market distortion is the root reason for the PRC’s external imbalances. These cost distortions have artificially lowered PRC production costs, raised profits, and improved their products’ international competitiveness which has not only stimulated the economy, but also brought about severe structural risks. We completed a crude estimation for factor cost distortions in the PRC during 2000–2009 which matched its current account surpluses quite well. In order to rebalance the economy, we recommend that the PRC should adopt a comprehensive reform package focusing on removing the factor market distortions. |
| Keywords: | External Imbalances, PRC, Factor Market Distortion, current account surpluses, asymmetric market liberalization |
| JEL: | F32 O11 H24 E61 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:eab:macroe:23257&r=tra |
| By: | Selin Özyurt; Timo Mitze |
| Abstract: | Since the introduction of its “open door” policy in the late 1970s, China has been attracting a growing share of FDI inflows and its international trade integration has advanced considerably. In this study, we take a closer look at the regional growth impact of the Chinese internationalization activity on labour productivity over the period 1979-2006. Our empirical analysis thereby extends the existing empirical literature by considering the likely spatial effects associated with Trade- and FDI-led growth in a dynamic error correction modelling framework. Our results indicate that, in the long-run relationship, regional labour productivity is indeed driven by direct and indirect spatial effects of FDI and trade activity next to further supply side factors such as the regional infrastructure equipment and human capital endowment. Similarly, in the short-run, changes in FDI activity and especially human capital variables are found to matter for the regional growth dynamics. |
| Keywords: | Trade; FDI; productivity growth; spatial spillovers; China |
| JEL: | O11 O18 P20 R10 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0308&r=tra |
| By: | Giles, John; Park, Albert; Cai, Fang; Du, Yang |
| Abstract: | Evidence from a range of different sources suggests that Chinese workers lost 20-36 million jobs because of the global financial crisis. Most of these layoffs affected migrant workers, who have typically lacked employment protection, tend to be concentrated in export-oriented sectors, and were among the easiest to dismiss when the crisis hit. Although it was severe, the employment shock was short-lived. By mid-2009, the macroeconomic stimulus and other interventions had succeeded in boosting demand for migrant labor. By early 2010, abundant evidence pointed to scarcity in China's labor market, as labor demand was once again leading to brisk growth in wages.The paper reviews different available sources of evidence for the effectsof the crisis, and notes the biases associated with alternative ex post efforts to measure the employment effects of the crisis. In particular, the paper highlights the usefulness of household surveys with employment histories relative to surveys based on sampling through firms. |
| Keywords: | Labor Markets,Labor Policies,Population Policies,Labor Standards,Tertiary Education |
| Date: | 2012–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5984&r=tra |
| By: | Ralph De Haas (European Bank for Reconstruction and Development (EBRD)); Yevgeniya Korniyenko (Bank of England); Elena Loukoianova (International Monetary Fund (IMF)); Alexander Pivovarsky (European Bank for Reconstruction and Development (EBRD)) |
| Abstract: | We use data on 1,294 banks in Emerging Europe to analyze how bank ownership and the so-called Vienna Initiative impacted credit growth during the 2008-09 crisis. As part of the Vienna Initiative western European banks signed country-specific commitment letters in which they pledged to maintain exposures and to support their subsidiaries in Emerging Europe. We show that in general both domestic and foreign banks sharply curtailed credit during the crisis, but that foreign banks that participated in the Vienna Initiative were relatively stable lenders. We find no evidence of negative spillovers from countries where banks signed commitment letters to countries where they did not. |
| Keywords: | Foreign banks, Vienna Initiative, financial crisis, state support |
| JEL: | C23 F36 G21 P34 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wmofir:62&r=tra |
| By: | Yuqing Xing (Asian Development Bank Institute (ADBI)) |
| Abstract: | This paper analyzes the role of processing trade in the People’s Republic of China (PRC)’s bilateral trade balances and the impact of the yuan’s appreciation on processing trade. The analysis is based on panel data covering the PRC’s 51 trading partners from 1993–2008. The empirical analysis shows that : (1) processing trade accounts for 100% of the PRC’s overall trade surplus and can explain most of its bilateral trade balances; (2) the PRC’s processing trade shows a significant regional bias—its processing exports to East Asian economies are three times those to other regions while its processing imports from East Asian economies are eleven times those from other regions; (3) the PRC is one of the major sources of its own processing imports, accounting for 16.8% of its total processing imports from all 51 trading partners; and (4) the appreciation of the yuan would affect both processing imports and exports in the same direction—specifically, a 10% real appreciation of the yuan would reduce not only the PRC’s processing exports by 9.6% but also its processing imports by 3.9%. Therefore, a moderate appreciation of the yuan would have a very limited impact on the PRC’s trade balance. |
| Keywords: | Processing Trade, exchange rates, Bilateral Trade Balances, PRC |
| JEL: | F1 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:23266&r=tra |
| By: | Ying Fan (Asian Development Bank Institute (ADBI)) |
| Abstract: | Adverse effects of the global financial crisis on international trade include falling demand, increased trade protectionism, and drying up of trade finance. Much attention has focused on the impact of the crisis on goods trade; however literature on its impact on services trade is limited, especially on the services trade in the People’s Republic of China (PRC). This paper analyzes the impact of the global financial crisis on the PRC’s services trade, discusses policy responses by the government, and puts forward policy suggestions. The main findings of the paper are as follows : Although the global economic and financial crisis spawned a synchronized recession leading to a contraction in the PRC’s services trade, the crisis has had a moderate effect on the PRC’s trade in services because of the lower internationalization of services. The PRC’s trade surplus in goods decreased and its trade deficit in services increased after the crisis. Structural reforms are now urgently needed to help support the recovery of output and trade. A possible solution to rebalancing the trade balance (trade surplus in goods and trade deficit in services) would be to expand trade in services. The degree of openness for services is lower than for goods in the PRC. Further liberalization in services trade is the appropriate policy choice for the government. Continued policy and regulatory reform in favor of services trade will be vital to supporting economic recovery. Improved market access and national treatment of foreign service suppliers would help enhance the productivity and competitiveness of local services firms and upgrade the industry structure of services, which is essential for the country’s economy to change from being driven by exports to being driven by domestic demand. Decreasing trade and investment barriers would help expand services trade and investment, and increase PRC involvement in the globalization of services. |
| Keywords: | Services Policy Reform, PRC, global financial crisis, Services Trade |
| JEL: | F13 F14 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:eab:financ:23232&r=tra |