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on China |
| By: | Fernald, John G. (Federal Reserve Bank of San Francisco); Hsu, Eric (University of California, Berkeley); Spiegel, Mark M. (Federal Reserve Bank of San Francisco) |
| Abstract: | We propose using imports, measured as reported exports of trading partners, as an alternative benchmark to gauge the accuracy of alternative Chinese indicators (including GDP) of fluctuations in economic activity. Externally-reported imports are likely to be relatively well measured, as well as free from domestic manipulation. Using principal components, we derive activity indices from a wide range of indicators and examine their fit to (trading-partner reported) imports. We choose a preferred index of eight non-GDP indicators (which we call the China Cyclical Activity Tracker, or C-CAT). Comparison with that index and others indicate that Chinese statistics have broadly become more reliable in measuring cyclical fluctuations over time. However, GDP adds little information relative to combinations of other indicators. Moreover, since 2013, Chinese GDP growth has shown little volatility around a gradually slowing trend. Other measures, including the C-CAT and imports, do not show this reduction in volatility. Since 2017, the C-CAT slowed from well above trend to close to trend. As of mid- 2019, it was giving the same cyclical signal as GDP. |
| JEL: | C53 C82 E20 F17 |
| Date: | 2019–09–04 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2019-19&r=all |
| By: | Shaghil Ahmed; Ricardo Correa; Daniel A. Dias; Nils Gornemann; Jasper Hoek; Anil K. Jain; Edith X. Liu; Anna Wong |
| Abstract: | China’s economy has become larger and more interconnected with the rest of the world, thus raising the possibility that acute financial stress in China may lead to global financial instability. This paper analyzes the potential spillovers of such an event to the rest of the world with three methodologies: a VAR, an event study, and a DSGE model. We find the sentiment channel to be the primary spillover channel to the United States, affecting global risk aversion and asset prices such as equity prices and the dollar, in addition to modest real effects through the trade channel. In comparison, the combined financial and real effects to other advanced and emerging market economies, especially net commodity exporters, would be more consequential due to their larger direct exposure to China and more limited scope of monetary policy to respond to shocks. |
| Keywords: | China ; Financial crisis ; Spillovers ; Financial system |
| JEL: | F30 G28 E60 |
| Date: | 2019–10–18 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:1260&r=all |
| By: | Clemens Fuest; Felix Hugger; Samina Sultan; Jing Xing |
| Abstract: | In recent years Chinese foreign acquisitions have increased significantly. In Europe and the US, these investments are often criticized. Critics argue that Chinese investors outbid other investors with help from their government, that the acquisitions lead to undesirable technology transfer or that they may have negative consequences for the employees of the target firm. We use a large deal-level dataset on cross-border acquisitions to investigate whether Chinese foreign acquisitions differ from cross-border investment coming from other countries. We find that relative to non-Chinese investors, Chinese acquirers indeed appear to be different in some dimensions. They focus on targets with higher debt levels and lower profitability. At the same time, they don’t seem to pay more for targets with given characteristics, questioning the view that they are subsidized to outbid other investors. Policy initiatives like the Belt and Road Initiative and Made in China 2025 influence state-owned but not private Chinese investors, suggesting that geopolitical or technology interests play a role. In the years after the takeover, target companies acquired by Chinese investors exhibit lower growth in capital productivity but a higher growth of employee compensation. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:econwp:_33&r=all |
| By: | Shuyang Qu; Wendong Zhang (Center for Agricultural and Rural Development (CARD)); Minghao Li; Lulu Rodriguez; Guang Han; Erin Cork; James M Gbeda |
| Abstract: | We provide the first micro-level analysis of farmers’ perceptions and views of the U.S.-China trade war. We asked farmers in Minnesota, Iowa, and Illinois with at least 250 operating acres of corn or soybeans from February to April 2019. Our results show that despite the immediate negative economic impacts they have experienced, over 56% were still somewhat (38%) or strongly supportive (22%) of President Trump’s tariffs on Chinese products. This relates, in part, to the 2018 Market Facilitation Program payments that a vast majority of farmers (86%) find at least somewhat useful. We find that in general, our farmer-respondents largely view the trade disruption as a short-term-pain/long-term-gain phenomenon. At the same time, a vast majority (76%) recognize that American farmers will bear the brunt of the tariffs imposed by China, and 62% agree that U.S. agriculture is likely to lose markets. In addition, a majority of our sample harbor five "pain points" related to China: poor intellectual property protection, the trade deficit, the U.S. Treasury debt it holds, cyber-economic espionage, and job losses to China. Finally, Fox News, farm bureaus, and Successful Farming magazine were the most frequently cited information sources by farmers. |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:19-pb26&r=all |