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on China |
| By: | Hinh T. Dinh |
| Abstract: | President Biden's announcement of new tariffs on China, though not economically significant on its own, symbolizes the deepening decoupling of the U.S. and Chinese economies. These tariffs, supported by both major political parties, represent the latest step in a broader strategy that favors policy interventions over traditional free-market principles and aims to protect domestic workers, maintain technological leadership, and prioritize economic security. This policy brief discusses the factors behind this shift in U.S. economic policy, including the experiences from the first and second China shocks. This shift, along with China's subsequent export policy reactions, will have important implications for the trade policies of developing countries. |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpaeco:pb_28_24 |
| By: | Marcus Vinicius de Freitas |
| Abstract: | China is the largest developing country. Africa is the continent with the largest number of developing countries. The China-Africa economic relationship has developed rapidly over the last two decades. China has increased its investment in Africa over the last four decades. Flows surged from $75 million (2003) to $5 billion (2021). This has had both positive and negative impacts on Africa. Infrastructure improvement, job creation, and overall economic growth can be listed as positive results, leading to improved connectivity, trade, and transportation in a continent where infrastructure integration has always been challenging. Creating such opportunities in Africa has supported lower unemployment rates, particularly among young people, which is fundamental in a continent that enjoys a positive demographic bonus. |
| Date: | 2023–08 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpaeco:pb_30-23 |
| By: | David A. Grigorian (Mossavar-Rahmani Center for Business and Government, Harvard Kennedy School; Center for Global Development); Winston Tang (MPP and MUP candidate, Harvard Kennedy School) |
| Abstract: | As the largest bilateral lender to the developing world, China’s involvement in efforts to help countries in debt distress achieve debt sustainability is very important. However, China has often been criticized for being slow to respond to those challenges due at times to some strategic motives. The paper discusses five hypotheses that may potentially explain China’s behavior within the G20 Common Framework, the main vehicle for low-income country sovereign debt restructuring. While difficult, if not impossible, to quantify, the factors underpinning these hypotheses—historic, ideological, institutional, and political in nature—nevertheless offer some useful insights into potential reasons behind China’s behavior within the context of the Common Framework. Studying these factors is critical for understanding China’s behavior and for projecting the way forward for sovereign debt restructuring efforts. |
| Date: | 2024–10–15 |
| URL: | https://d.repec.org/n?u=RePEc:cgd:wpaper:706 |
| By: | Xiaofeng Wang; Otaviano Canuto |
| Abstract: | The surprising victory of Javier Milei, the unconventional ‘anarcho-capitalist’ candidate, in the August primaries ahead of Argentina’s October 2023 general election, can be largely credited to his commitment to dollarize the Argentine economy, a move perceived as the ultimate solution to bring an end to the nation's economic turmoil. The potential shift from the local currency to the dollar has sparked concerns about Argentina's bilateral currency swap line with China. This swap line plays a crucial role in their bilateral relations and has also served as a means for Argentina to fulfill its debt obligations to the International Monetary Fund. The swap line is seen as a key element in preventing Argentina from defaulting on its IMF obligations, which is vital for both its economic and international financial stability. Given the significance of these developments, this article explores Argentina's potential shift towards dollarization and its implications for the country's relationship with China. It does so by assessing the critical role of the bilateral currency swap line between the Central Bank of Argentina (BCRA) and the People's Bank of China (PBOC) in backing Argentina's external payments. |
| Date: | 2023–10 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpaeco:pb_39-23 |
| By: | Otaviano Canuto |
| Abstract: | The global economic environment has changed as the U.S.—and to a less confrontational degree, the European Union—have clearly established a context of technological rivalry with China. Hindering China’s progress in the sophistication of semiconductor production has become a centerpiece of current U.S. foreign policy. While the U.S. is clearly winning the semiconductor war, the picture is different when it comes to clean-energy technology. Both technology wars overlap with access to and refinement of critical raw materials (CRM), which are key upstream components of the corresponding value chains, encompassing mineral-rich emerging markets and developing economies. The way in which the U.S. and the European Union approach the goal of self-sufficiency, as well as access to and refinement of CRMs, will make a big difference to their stakes in the technology wars. |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbcoen:pb_41-23 |
| By: | Andres, Pia |
| Abstract: | Low cost solar energy is key to enabling the transition away from fossil fuels. Despite this, the European Union followed the United States’ example in imposing anti-dumping tariffs on solar panel imports from China in 2013, arguing that Chinese panels were unfairly subsidised and harmed its domestic industry. This paper examines the effects of Chinese import competition on firm-level innovation in solar photovoltaic technology by European firms using a sample of 10, 137 firms in 15 EU countries over the period 1999–2020. I show that firms which were exposed to higher import competition innovated more if they had a relatively small existing stock of innovation, but less if their historical knowledge stock fell within the top 10th percentile of firms in the sample. This suggests that newer firms were more able to respond to increased competition by innovating, while firms with a large historical stock of innovation may have been locked into old technological paradigms. As firms with a smaller knowledge stock tended to innovate more overall, trade with China appears to have been beneficial in encouraging innovation among the most innovative firms. However, I also find evidence that import competition increased the probability of exit among firms in the sample. |
| JEL: | R14 J01 |
| Date: | 2024–10–07 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125249 |
| By: | Matteo Maggiori; Chris Clayton; Jesse Schreger |
| Abstract: | Hegemonic powers, like the United States and China, exert influence on other countries by threatening the suspension or alteration of financial and trade relationships. We show that the mechanisms that generate gains from integration, such as external economies of scale and specialization, also increase these countries' power to exert economic influence because in equilibrium they make other relationships poor substitutes for those with a global hegemon. Smaller countries can insulate themselves from geoeconomic pressure from hegemons by pursuing anti-coercion policy: shaping their economies in ways that insulate them from undue foreign pressure. This policy faces a tradeoff between gains from trade and economic security. We show that while an individual country can make itself better off, uncoordinated attempts by multiple countries to limit their dependency on the hegemon lead to unwinding of the global gains from integration and inefficient fragmentation of the global financial and trade system. We study a leading application focusing on financial services as both tools of coercion by the hegemon and an industry with strong strategic complementarities at the global level. We provide estimates of geoeconomic power for the US and China and show empirically that the geoeconomic power of the United States relies strongly on financial services while that of China loads more on manufacturing trade. |
| Keywords: | geoeconomics, geopolitics, economic security, economic statecraft, payment systems |
| JEL: | F02 F5 F12 F15 F33 F36 F38 P43 P45 |
| URL: | https://d.repec.org/n?u=RePEc:bis:biswps:1224 |
| By: | Nie, Rong (Dalian University of Technology & University of Warwick); Song, Jinbo (Dalian University of Technology); Carneiro, Juliana (University of Warwick) |
| Abstract: | This study examines the impact of emissions data disclosure on alleviating NIMBYism (Not In My Backyard) concerns surrounding Waste-to-Energy (WtE) incineration plants. Leveraging China’s 2017 “Installing, Erecting, and Networking” (IEN) policy as a quasi-natural experiment, we employ a difference-in-differences (DID) approach to analyze over 35, 000 housing transactions near 13 plants. Results indicate that the IEN policy attenuates the housing price gradient by 30.43%, equivalent to 38% of an urban Chinese resident’s annual disposable income. This robust evidence highlights how transparency policies can enhance public trust and thus promote more sustainable urban development. |
| Keywords: | information disclosure ; incineration ; NIMBYism concerns ; housing price gradient JEL Codes: Q28 ; Q58 ; R31 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:warwec:1527 |
| By: | Elie Bouri (School of Business, Lebanese American University, Lebanon); Oguzhan Cepni (Ostim Technical University, Ankara, Turkiye; University of Edinburgh Business School, Centre for Business, Climate Change, and Sustainability; Department of Economics, Copenhagen Business School, Denmark.); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Ruipeng Liu (Department of Finance, Deakin Business School, Deakin University, Melbourne, VIC 3125, Australia) |
| Abstract: | This paper analyses the effect of supply constraints on international stock market volatility and while also considering their effect on stock returns. Using higher-order nonparametric causality-in-quantiles tests and daily data for China, France, Germany, Italy, Spain, the United Kingdom, the United States, and overall Europe, we find strong evidence of Granger causality flowing from supply constraints to the entire conditional distribution of stock returns and volatility. Notably, supply constraints positively predict stock volatility. This positive predictability remains robust when using alternative measures, including monthly realized variance and different metrics of supply constraints. Our findings have implications for investors and policymakers. |
| Keywords: | Supply Constraints, Stock Markets Volatility, Higher-Order Nonparametric Causality-in-Quantiles Test |
| JEL: | C21 C22 E23 G15 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:pre:wpaper:202440 |
| By: | Xiaodan Yu; Giovanni Dosi; Maria Enrica Virgillito; Can Huang; Lanhua Li |
| Abstract: | By means of a fine-grained dataset linking exported product-level and firm-level data, this pa- per reconstructs the Chinese accumulation regimes at the microlevel in the period 2000-2013. After documenting a few macro stylized facts on the Chinese export-led accumulation regime in terms of the trend of Chinese exports in international markets, and the appreciation in the terms of trade in manufacturing products, the paper gives evidence of a process of restructuring of exporting firms towards more complex products and sectors, against any hypothesis of a purported price dumping in international markets. The positive relationship between technological content of the exported product and pricing markup strategies confirms the Sylos-Labini hypothesis linking prices and technological advantage, yielding the formation of international oligopolies able to exercise forms of market power and setting prices well-above any competitive level. As such, the trend in export prices has signalled the progressive capacity of the Chinese firms to orient the patterns of international market penetration, particularly in most complex productions. |
| Keywords: | Chinese exports, product/firm level export prices, pass-through, international oligopolies, profitabilities |
| Date: | 2024–11–09 |
| URL: | https://d.repec.org/n?u=RePEc:ssa:lemwps:2024/29 |
| By: | Heng Geng (Victoria University of Wellington); Harald Hau (University of Geneva - Geneva Finance Research Institute (GFRI); Swiss Finance Institute; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)); Hanzhang Zheng (University of Geneva and Swiss Finance Institute) |
| Abstract: | China's IPO approval process co-opts audit firm representatives into the regulatory decision body, which creates conflict of interest and potential channels for corruption. We show evidence that co-opted auditors (i) do not differ in their auditing practice of listed firms from other auditors, but (ii) attract more borderline IPO clients that do not fully comply with the listing requirements, contributing to higher audit revenue growth, (iii) increase the chance of IPO approval for their borderline candidates, which (iv) afterwards underperform regular IPO stocks by 39% in terms of their average two-year buy and hold return. Moreover, (v) these borderline IPO firms show poorer profitability than matched firms, suggesting potential misrepresentation of firm prospects at the IPO stage. |
| Keywords: | corruption of professional standards, IPO underperformance, regulatory failure |
| JEL: | G14 G15 G18 G38 H11 P27 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:chf:rpseri:rp2454 |