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on China |
| By: | Tamim Bayoumi; Yunhui Zhao |
| Abstract: | Housing is by far the most important asset in Chinese households’ balance sheets. However, despite forceful and frequent government interventions, the rise in Chinese housing prices has not been contained as much as intended, a trend that has not been reversed by the COVID-19 shock. In this paper, we first provide some stylized facts and then a DSGE model (encompassing both demand and supply channels) to highlight the impact of a “slow-moving” structural vulnerability—financial market incompleteness—on China’s housing prices. The model implies that to eradicate the root causes of the rising housing price, policymakers need to go beyond the housing market itself; instead, it would be desirable to deepen financial markets because these markets would help channel financial resources to productive sectors rather than to housing speculation. This is particularly important in the COVID era because without addressing this structural vulnerability, the higher household savings and the government stimulus may fuel the housing bubble and sow seeds for a future crisis. The paper can also shed light on the housing markets in other economies that face similar vulnerabilities. |
| Date: | 2020–12–04 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2020/265&r=all |
| By: | Yuhua Li (Department of Information Management, Zhejiang University of Finance & Economics, China); Ze Jian (School of business administration, Guangdong University of Finance & Economics, China); Wei Tian (School of Ecnomics, Peking University, China); Laixun Zhao (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan) |
| Abstract: | We examine how political conflicts affect trade, using both the Goldstein score that scales all political conflicts daily worldwide and the firm-country-product level data of Chinese imports. We find that political conflicts reduce Chinese imports in general. Speci cally, (i) the imports of State-owned enterprises (SOEs) are most reduced, and the effects mostly fall on imports for intermediate goods while not so much on capital goods; (ii) foreign-invested enterprises (FIEs) are less negatively affected, because most of their trade is processing, which is less negatively affected by political conflict than ordinary trade. These results are obtained via mechanisms in the mode of trade (processing vs. ordinary), variations in broad economic categories (BEC) and import boycotts and export controls. |
| Keywords: | Political conflicts; Trade; State-owned enterprises; Goldstein score |
| JEL: | F1 F51 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2021-01&r=all |
| By: | Josh De Lyon; Joao Paulo Pessoa |
| Abstract: | We exploit the recent surge in Chinese export growth to study the effects of a trade shock on workers and firms in a foreign market, the UK, in the period 2000-2007. We find that individuals initially employed in sectors highly exposed to growth in imports from China experienced lower income growth and remained out of employment longer than workers in sectors that were less exposed to import competition. The effects are heterogeneous, with initially lower-paid workers suffering more in terms of employment and earnings than those initially better-paid, and female workers experiencing a greater relative fall in total earnings than males, mostly through reduced years of employment. Plants in industries more exposed to Chinese products displayed lower employment growth and higher probability of going out of business than plants in sectors more insulated from competition with China, with stronger effects for larger plants. |
| Keywords: | globalisation, employment, wages, UK economy. |
| JEL: | F14 F16 J3 J6 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1741&r=all |
| By: | Li, Honghui; Hiwatari, Masato |
| Abstract: | In China, the population policy has been a major item on the political agenda since the early 1970s. Given the importance of human capital as an engine for economic growth, the question of how changes in birth rates affect human capital is particularly important for macroeconomic policy. Extant studies have presented contrasting views on the relationship between the number of children and educational investment in households. Some suggest a negative relationship due to the quantity/quality trade-off occasioned by limited resources within the family, while other studies point out a positive relationship caused by economies of scale. This study empirically analyzes the relationship between the number of children and educational attainment in households in China. More specifically, we estimate the effect of the number of siblings on the number of education years among individuals born since 1970, using the China General Social Survey (CGSS) and the Chinese Household Income Project Survey (CHIP). We estimate the causal impact of the number of siblings by exploiting exogenous variation in the number of siblings caused by family planning policies (“Later, Longer, Fewer”) that started in the early the 1970s. The results support the assertion that the number of siblings has a negative effect on educational attainment in China. |
| Keywords: | Quantity-quality trade-off, Demographic Economics, Education, Fertility, Family Planning, China, |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:hok:dpaper:353&r=all |
| By: | Iwasaki, Ichiro; Ma, Xinxin |
| Abstract: | This paper performs a meta-analysis of 1472 estimates extracted from 199 previous studies to investigate the gender wage gap in China. The results show that, although the gender wage gap in China during the transition period has an impact that statistically significant and economically meaningful, it remains at a low level. It is also revealed that the wage gap between men and women is more severe in rural regions and the private sector than those in urban regions and the public sector. Furthermore, we found that, in China, the gender wage gap has been increasing rapidly in recent years. |
| Keywords: | gender wage gap, meta-synthesis, meta-regression analysis, publication selection bias, China |
| JEL: | D63 J31 J71 P25 P36 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hitcei:2020-5&r=all |
| By: | Wang, Qing; Zhang, Shiying |
| Abstract: | This paper examines the growth effect of one of the largest nutrition assistance programs in early life. The program covers 5.8 million children in poor rural China and provides 6-24-month old children with a free nutrition supplement that contains nine essential micronutrients. We utilize a phase-in procedure by county for identification and estimate its impact on several early-life health indicators. Robust evidence shows that such nutrition supplements effectively increase boys' weight and reduce their probability of being underweight. No effect is observed on girls of similar age. These health indicators are related to long-term human capital development. The gender differences in policy impact that are identified in this paper have important implications for nutrition subsidy in the early years of life in developing countries. |
| Keywords: | Nutrition,complementary feeding,health,children,poverty |
| JEL: | I10 I18 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:740&r=all |
| By: | Yiping Huang; Longmei Zhang; Zhenhua Li; Han Qiu; Tao Sun; Xue Wang |
| Abstract: | Promoting credit services to small and medium-size enterprises (SMEs) has been a perennial challenge for policy makers globally due to high information costs. Recent fintech developments may be able to mitigate this problem. By leveraging big data or digital footprints on existing platforms, some big technology (BigTech) firms have extended short-term loans to millions of small firms. By analyzing 1.8 million loan transactions of a leading Chinese online bank, this paper compares the fintech approach to assessing credit risk using big data and machine learning models with the bank approach using traditional financial data and scorecard models. The study shows that the fintech approach yields better prediction of loan defaults during normal times and periods of large exogenous shocks, reflecting information and modeling advantages. BigTech’s proprietary information can complement or, where necessary, substitute credit history in risk assessment, allowing unbanked firms to borrow. Furthermore, the fintech approach benefits SMEs that are smaller and in smaller cities, hence complementing the role of banks by reaching underserved customers. With more effective and balanced policy support, BigTech lenders could help promote financial inclusion worldwide. |
| Keywords: | Fintech;Machine learning;Bank credit;Loans;Credit risk;WP,credit history,Fintech firm,house ownership,internet company,real-time customer rating |
| Date: | 2020–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2020/193&r=all |
| By: | Chu, Shuai; Liu, Xiangbo |
| Abstract: | This paper studies whether research universities can boost regional economic development through an exogenous shock of a forced relocation of a research university in China. We analyze the development in the treated regions compared with a set of control regions that are created using the synthetic control method and find that research universities can have negative effects on local economic development. We then perform a series of robustness checks. Our main results carry through. By employing a more exogenous shock and more reliable identification strategies, our study provides evidence that research universities do not necessarily promote regional economic development. |
| Keywords: | Research Universities,Regional Economic Development,Synthetic Control Method |
| JEL: | O15 O18 R11 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:748&r=all |
| By: | Gordon H. Hanson |
| Abstract: | In this paper, I review evidence on changing global specialization in labor-intensive exporting. Production of apparel, footwear, furniture, and related products are how many low-income countries first enter export manufacturing. Just as China's rise as a powerhouse in these goods supplanted a role previously occupied by the East Asian Tigers, the world may again be on the cusp of significant change in where labor-intensive goods are produced. China's prowess in these sectors peaked in the early 2010s; its share in their global exports, while still substantial, is now in decline. Mechanisms through which the global economy may adjust to China's graduation into more technologically sophisticated activities include expanded labor-intensive export production in other emerging economies and labor-saving technological change in products currently heavily reliant on less-educated labor. Available evidence suggests that the first mechanism is operating slowly and the second hardly at all. As a third mechanism, China may in part replace itself by moving labor-heavy factories out of densely populated and expensive coastal cities and into the country's interior. Such a transition, though still in its infancy, would mirror the decentralization of manufacturing production in the U.S. and Europe, which occurred after World War II. |
| JEL: | F14 F61 O24 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28313&r=all |
| By: | Tak Wing Chan (Social Research Institute, University College London) |
| Abstract: | I use household panel data to study the dynamics of relative poverty in China, Germany, the UK, and the US. Compared to the three Western countries, not only is relative poverty more common in China, it is also deeper and more severe. Transient poverty accounts for less than half of the total poverty in Germany or the US, but about two thirds of that in China or the UK. Over three waves, 87 percent of Germans, 78 percent of Brits, 71 percent of Americans, but only 46 percent of Chinese were never poor. Using a multinomial logistic regression model, the determinants of poverty are found to be very similar across the four countries. But the variance explained of that model is much smaller for China than for the three Western countries. The results also raise questions about some regularities reported in previous research on poverty dynamics. |
| Keywords: | relative poverty, panel data, cross-national comparison, China |
| JEL: | I32 O57 |
| Date: | 2021–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:2101&r=all |
| By: | Nitya Aasaavari; Fabio Di Vittorio; Ana Lariau; Yuebo Li; Rui Mano; Pedro Rodriguez |
| Abstract: | Asia and Latin America and the Caribbean (LAC), two regions with large growth potential, have become increasingly connected over the last 20 years. China has emerged not only as a top trading partner, but also as an important competitor of LAC exports. China’s retreat from certain markets, due to the ongoing rebalancing process, could open new opportunities for LAC exporters but also entail some challenges. Our results show that China’s rebalancing will have an overall positive effect on LAC’s GDP and exports in the long run, but this effect is small and uneven across countries, leading to winners and losers. We also provide evidence that other countries, such as India, are currently trying to fill the gap left by China and could undermine LAC’s competitive advantage in some export markets. In this context, reduction of trade barriers and further integration within the region and/or with the rest of the world would lead to unequivocally positive outcomes for all LAC countries. The COVID-19 shock might exacerbate the effects identified in our analysis. |
| Keywords: | Exports;Competition;Comparative advantage;Imports;Real exports;China’s rebalancing,Latin America and the Caribbean,trade integration,WP,Asia-Lac trade linkage,export category,trade competition index,exports of goods,export dependency,exports of service |
| Date: | 2020–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2020/239&r=all |
| By: | Cigna, Simone; Meinen, Philipp; Schulte, Patrick; Steinhoff, Nils |
| Abstract: | In this paper we provide evidence on the existence of short-run trade diversion effects towards third countries as a consequence of tariff shocks. We exploit sudden policy changes in the context of the trade dispute between the US and China. Based on a data set covering monthly product-level information on US imports from 30 countries for the period January 2016 until May 2019, we employ a difference-in-differences estimation framework. Doing so, we (1) can confirm previous findings showing a strong negative direct effect of US tariffs on US imports from China, but (2) do not find evidence for significant short-run trade diversion effects towards third countries. This latter finding holds for product and country subgroups as well as for a variety of robustness checks. JEL Classification: F13, F14, F61 |
| Keywords: | difference-in-differences, product-level data, tariffs, trade diversion, US imports |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20202503&r=all |