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on China |
| By: | Chen, Xi (Yale University); Eggleston, Karen (Stanford University); Sun, Ang (Central University of Finance and Economics) |
| Abstract: | China launched a new rural pension scheme (hereafter NRPS) for rural residents in 2009, now covering almost all counties with over 400 million people enrolled. This implementation of the largest social pension program in the world offers a unique setting for studying the economics of intergenerational relationships during development, given the rapidity of China's population aging, traditions of filial piety and co-residence, decreasing number of children, and dearth of formal social security, at a relatively low income level. We draw on rich household surveys from two provinces at distinct development stages – impoverished Guizhou and relatively well-off Shandong – to better understand heterogeneity in the impact of pension benefits. Employing a fuzzy regression discontinuity design, we find that around the pension eligibility age cut-off, the NRPS significantly reduces intergenerational co-residence, especially between elderly parents and their adults sons; promotes pensioners' healthcare service consumption; and weakens (but does not supplant) nonpecuniary and pecuniary transfers across three generations. These effects are much larger in less developed Guizhou province. |
| Keywords: | social pensions, intergenerational relationships, regional comparisons, coresidence, old-age care, service consumption, transfers |
| JEL: | H55 I18 J14 R28 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10731&r=cna |
| By: | Ho, Sin-Yu; Njindan Iyke, Bernard |
| Abstract: | The impact of financial development on poverty reduction has received attention in the literature recently. While the connection between financial development and poverty may appear straight forward in theory, in empirics it may be much complicated. This study attempted at empirically assessing the causal links between financial development and poverty reduction in China for the period 1985–2014. The study used the Toda-Yamamoto causality test to avoid pretesting bias that has featured majority of the existing studies. The study utilized two standard proxies for financial development, namely: the domestic private credit by banks as percentage of GDP, and money supply (M2) as percentage of GDP; and a standard proxy for poverty reduction namely: the household final consumption expenditure per capita growth (annual percentage). The study found a bidirectional causal flow between financial development and poverty reduction, implying that the causal flow between these important variables is independent of the proxy for financial development. This means that financial sector reforms and poverty reduction programmes are more of “win-win” strategies in the case of China. Therefore policymakers in China should continue to implement robust financial sector reforms and poverty reduction strategies. |
| Keywords: | Financial Development; Poverty Reduction; Toda-Yamamoto Test; China |
| JEL: | C32 E44 I32 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78922&r=cna |
| By: | Hyeongwoo Kim; Wen Shi |
| Abstract: | This paper empirically investigates the determinants of the two key benchmark interest rates in China using an array of constrained ordered probit models for quarterly frequency data from 1987 to 2013. Specifically, we estimate the behavioral equation of the People's Bank of China that models its decision-making process for revisions of the benchmark deposit rate and the lending rate. Our findings imply that the PBC's policy decisions are better understood as responses to changes in inflation and money growth, while output gaps and the exchange rate play negligible roles. We also implement in-sample fit analyses and out-of-sample forecast exercises. Our empirical findings show robust and reasonably good performances of our models in understanding dynamics of these benchmark interest rates. |
| Keywords: | Monetary Policy; People's Bank of China; Ordered Probit Model; Deposit Rate; Lending Rate; In-Sample Fit; Out-of-Sample Forecast |
| JEL: | E52 E58 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:abn:wpaper:auwp2017-04&r=cna |
| By: | Broadberry, Stephen N; Guan, Hanhui; Li, David Daokui |
| Abstract: | Chinese GDP per capita fluctuated at a high level during the Northern Song and Ming dynasties before trending downwards during the Qing dynasty. China led the world in living standards during the Northern Song dynasty, but had fallen behind Italy by 1300. At this stage, it is possible that parts of China were still on a par with the richest parts of Europe, but by 1750 the gap was too large to be bridged by regional variation within China and the Great Divergence had already begun before the Industrial Revolution |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11972&r=cna |
| By: | Carlos Casanova; Alvaro Ortiz; Tomasa Rodrigo; Le Xia; Joaquín Iglesias |
| Abstract: | We develop an indicator to track vulnerability sentiment in China. In order to ensure robustness and depth, we use a combination of traditional macroeconomic and financial time series with textual analysis using Big Data techniques.The index is composed by the following dimensions: state owned enterprises; shadow banking; housing market bubble and exchange rate market. |
| Keywords: | Asia , China , Economic Analysis , Regional Analysis , Watch , Working Paper |
| JEL: | C55 C38 C43 D81 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:bbv:wpaper:17/13&r=cna |
| By: | Pollitt, M.; Yang, C-H.; Chen, H. |
| Abstract: | We begin with a brief background to the current Chinese power market reforms which began with the State Council No.9 Document of March 2015. We introduce 14 different electricity reform elements from international experience. Under each of these reform elements we will discuss: its theoretical significance; general reform experiences with it; and its application in the Chinese context. Our motivation is how China might bring down the currently high industrial price of electricity. We identify four promising sources of price reduction: the introduction of economic dispatch of power plants; rationalisation of electricity transmission and distribution; reduction of high rates of investment; and rebalancing of electricity charges towards residential customers. We draw out some overall lessons and identify some important points for future research into Chinese power market reform. |
| Keywords: | power market reform, international experience, China, industrial electricity price |
| JEL: | L94 |
| Date: | 2017–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1713&r=cna |
| By: | Van Assche, Ari; Van Biesebroeck, Johannes |
| Abstract: | Functional upgrading occurs when a firm acquires more sophisticated functions within an existing value chain that require a higher skill content. In this paper, we analyze if there is evidence of this type of upgrading in China's export processing regime by investigating dynamics in the relative prevalence of Import & Assembly (IA) versus Pure Assembly (PA) processing trade over the period 2000-2013. Firms in both regimes provide similar manufacturing services to foreign companies, but IA firms also conduct the sophisticated tasks of quality control, searching, financing and storing imported materials. Consistent with a trend of functional upgrading, we show that the share of IA trade in total processing trade has increased rapidly during the period 2000-2006, both overall and within product categories. Furthermore, we find that this trend has gone hand-in-hand with improvements in a sector's labor productivity and unit values. Against expectations, we find that this process has slowed down notably during the period 2006-2013. |
| Keywords: | global value chains; industrial development; Manufacturing |
| JEL: | D2 F1 L2 O1 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11967&r=cna |
| By: | Ravi Kanbur (Cornell University, U.S.A.); Yue Wang (Cornell University, U.S.A.); Xiaobo Zhang (Peking University and International Food Policy Research Institute, China) |
| Abstract: | The high inequality in China has been a focus of interest for policy makers and researchers. However limited work has been done to evaluate its latest trend since 2010. With the change of the economic structure and new policy tools carried out recent years, a revisit of the Chinese inequality should give us the latest information about its evolution and the impacts on income distribution of these economic and policy changes. This paper argues that after a quarter century of sharp and sustained increase, Chinese inequality is now plateauing and even turning down. The argument is made using a range of data sources and a range of measures and perspectives on inequality. The evolution of inequality is further examined through decomposition by income source and population subgroups. Preliminary explanations are provided for these trends in terms of shifts in policy and structural transformation of the Chinese economy. The narrative on Chinese inequality now needs to focus on the reasons for this great turnaround. |
| Keywords: | Chinese Inequality Turnaround, Inequality Data, Inequality Trends, Inequality and Structural Transformation, Harmonious Development and Government Policy. |
| JEL: | D31 D63 O15 O53 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2017-433&r=cna |
| By: | Arpita Chatterjee (UNSW Business School, UNSW); Richa Saraf (SUNY-Albany) |
| Abstract: | We study the effect of a domestic shock in China on the real economy and financial markets of a commodity exporting country. We estimate a dynamic factor model using Bayesian methods to identify a China factor and a global factor using monthly macroeconomic data from China and rest of the world. We, then, assess implications of the China factor on global commodity prices and macroeconomy of a commodity exporting nation in a reduced form Bayesian VAR. A negative China shock causes fall in global commodity prices leading to output loss and stock market fall in these countries. China shock affects output of only a subset of countries in our sample compared to US shock, which affects all countries. Stock markets of commodity dependent countries respond strongly and more quickly to China shock than to US shock. China shock also has more persistent effect on commodity prices than US shock. |
| Keywords: | China; Commodities; Bayesian VAR; Dynamic Factor Model; Emerging Market Economies |
| JEL: | F62 Q02 C38 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2017-13&r=cna |