“The good, the bad and the ugly: Chinese imports, European Union anti-dumping measures and firm performance”
Lizza Jabbour, Zhigang Tao, Enrico Vanino and Yan Zhang
In: Journal of International Economics, Vol. 117, March 2019, Pages 1-20
This paper analyses the effects of the European Union’s anti-dumping tariffs against Chinese imports on all affected firms: “the good” European import-competing firms, “the bad” Chinese exporters and “the ugly” European importers of dumped products. The results show that temporary import tariffs are beneficial to the least productive “good” EU producers, but harms the most productive “ugly” EU importers. Overall, the net effects of anti-dumping policy on European employment and exports are largely negative. Also tariffs enhance the productivity of surviving “bad” Chinese exporters and widens the productivity gap with European competitors.
“U.S. job flows and the China shock”
Brian Asquith, Sanjana Goswami, David Neumark and Antonio Rodriguez-Lopez
In: Journal of International Economics, Vol. 118, May 2019, Pages 123-137
International trade exposure affects job flows along the intensive margin (from expansions and contractions of firms’ employment) as well as along the extensive margin (from births and deaths of firms). This paper uses 1992–2011 employment data from U.S. establishments to construct job flows at both the industry and commuting-zone levels, and then estimates the impact of the ‘China shock’ on each job-flow type. Using the two most influential measures of Chinese exposure, Asquith et al. find that the China shock affects U.S. employment mainly through deaths of establishments. At the commuting-zone level, we find evidence of large job reallocation from the Chinese-competition exposed sector to the non exposed sector. Moreover, the authors demonstrate that the job-flow effects of the China shock are fundamentally different from those of a more general adverse shock affecting the U.S. demand for domestic labor.
“Busting the “Princelings”: The Campaign Against Corruption in China’s Primary Land Market”
Ting Chen and James Kai-sing Kung
In: The Quarterly Journal of Economics, Volume 134, Issue 1, Pages 185–226
Using data on over a million land transactions during 2004–2016 where local governments are the sole seller, the authors find that firms linked to members of China’s supreme political elites—the Politburo—obtained a price discount ranging from 55.4% to 59.9% compared with those without the same connections. These firms also purchased slightly more land. In return, the provincial party secretaries who provided the discount to these “princeling” firms are 23.4% more likely to be promoted to positions of national leadership. To curb corruption, President Xi Jinping stepped up investigations and strengthened personnel control at the province level. Using a spatially matched sample (e.g., within a 500-meter radius), Chen and Kung find a reduction in corruption of between 42.6% and 31.5% in the provinces either targeted by the central inspection teams or whose party
“Environmentalism with Chinese Characteristics—A Review of Matthew E. Kahn and Siqi Zheng’s Blue Skies over Beijing: Economic Growth and the Environment in China”
In: Journal of Economic Literature, Vol. 57, No. 1, 161 – 179
“China’s dramatic rise from poverty to global economic prominence has been accompanied by an equally dramatic increase in environmental damages. The book under review presents an exploration of economic and political economy factors that might bring about a reversal in emissions that contribute to high pollution loadings in large urban areas. The authors highlight preference shifts associated with rapid growth of per capita income and express optimism about government responses to demands for a cleaner environment. There are some indications that China’s largest cities are indeed getting cleaner air. However, total emissions (largely from heavy industry and coal-fired energy generators) continue to rise, and the mechanisms by which preference shifts turn into policy changes remain opaque. It may be that China’s most polluting industries are sorting into localities where either preferences for clean air are less pronounced or local governments are less responsive. This may match a positively selected counterflow of individuals seeking better environmental amenities and more responsive government.”
“China’s Service Trade Development and Policy Implications for Korea: Focused on Major Industrial and Regional Analysis”
KIEP Research Paper, World Economy Brief 18-27
The Chinese government is pushing for the opening of the country’s service sector and fostering the producer service industry through its 13th Five-Year Plan. Aiming to realize these goals, China emphasizes a highly open market and external cooperation, and focuses on the development of the service industry and the expansion of the service trade as it did in the past by opening policies.
This study seeks to explore new export engines that can boost trade in the services sector. To this end, the study examines ways to boost services trade with China based on an analysis of industries and regions with good prospects.
On June 14, 2019 the East Asia Forum on Economic (Dis)integration that is jointly organized by CEAMeS, the Institute of East Asia Studies from the University of Duisburg-Essen, Germany and the Contemporary China Centre (CCC) from the University of Westminster, London, UK will take place at the University of Westminster in London, UK. The aim of this forum is to bring together scholars from all fields related to international economics focusing on drivers and consequences of trade between China and the rest of the world.
If you would like to submit a paper, you can find the relevant information in the attached file.
You can find the PDF-version here: CEAMeS_Call for Papers_Juni2019
“Learning Chinese? The changing investment behavior of foreign institutions in the Chinese stock market”
Timo Korkeamäki, Nader Virk, Haizhi Wang & Peng Wang
BOFIT Discussion Papers 19/ 2018
Korkeamäki et al. analyze preferences of foreign institutional investors in the Chinese stock market in a sample that covers 2003 to 2014. They find foreign investors changed their investment behavior during the sample period from generic patterns found in much of the world to China-specific patterns. The results suggest that foreign institutions learned to adjust their investment behavior to account for unique features of the Chinese market.
“Macroeconomic Effects of China’s Financial Policies”
Kaiji Chen, Tao Zha
NBER Working Paper No. 25222
The Chinese economy has undergone three major phases: the 1978-1997 period marked as the SOE-led economy, the 1998-2015 phase as the investment-driven economy, and the new normal economy since 2016. All three economies have been shaped by the government’s financial policies, defined as a set of credit policy, monetary policy, and regulatory policy. Chen and Zha analyze the macroeconomic effects of these financial policies throughout the three phases and provide the stylized facts to substantiate our analysis. The stylized facts differ qualitatively across different phases or economies. They argue that the impacts of China’s financial policies work through transmission channels different from those in developed economies and that a regime switch from one economy to another was driven mainly by regime changes in financial policies.
“China’s Rebalancing: Recent Progress, Prospects and Policies”
Rui Mano & Jiayi Zhang
IMF Working Paper No. 18/243
While China’s growth gathered momentum in 2017, rebalancing was uneven and decelerated along many dimensions reflecting the temporary factors behind the growth pickup. Going forward, rebalancing is expected to proceed as these temporary factors recede, but elevated income inequality and leverage will remain a challenge. The authorities are already pursuing several pro-rebalancing policies which could be expanded to support each dimension of rebalancing while reducing trade-offs between them.
“Human Capital, Technology Adoption and Firm Performance: Impacts of China’s Higher Education Expansion in the Late 1990s”
Yi Che & Lei Zhang
In: The Economic Journal, Vol. 126, Issue 614, Sep 2018, pp 2282-2320
Che and Zhang exploit a policy‐induced exogenous surge in China’s college‐educated workforce that started in 2003 to identify the impact of human capital on productivity. Using a difference‐in‐differences estimation strategy, they find that industries using more human‐capital intensive technologies experienced a larger gain in total factor productivity after 2003 than they did in prior years. Exploring the pathways from human capital increases to TFP growth, they find that these industries also accelerated new technology adoption, as reflected in the importation of advanced capital goods, R&D expenditure and capital intensity, as well as employment of more highly skilled individuals. The productivity gains were weaker for domestic private firms than for foreign‐owned firms.
“The persistence of trade policy in China after WTO accession”
In: Journal of International Economics, Vol. 114, Sep 2018, pp 130-142
Import tariffs have fallen steeply worldwide over the last several decades, but has trade policy persisted through a rise in the use of other instruments? Garred study this question in the context of China’s 2001 accession to the World Trade Organization, using panel data on Chinese export policies. He finds that after its entry into WTO, the distribution of China’s export restrictions across industries increasingly resembles the inverse of its pre-WTO import tariff schedule. The evidence suggests that increases in export restrictions are likely to have partly restored China’s pre-WTO trade policy.
“Tariff scares: Trade policy uncertainty and foreign market entry by Chinese firms”
Meredith Crowley, Ning Meng & Huasheng Song
In: Journal of International Economics, Vol. 114, Sep 2018, pp 96-115
Crowley et al. estimate how a rise in uncertainty about future tariff rates impacts firm decisions to enter into and exit from export markets. Using Chinese customs transactions between 2000 and 2009, they exploit time-variation in product-level trade policy and find that Chinese firms are less likely to enter new foreign markets and more likely to exit from established foreign markets when their products are subject to increased trade policy uncertainty.
„The Nexus of Monetary Policy and Shadow Banking in China”
Kaiji Chen, Jue Ren, Tao Zha
In: American Economic Review, Vol. 108, No. 12, December 2018
Based on China’s institutional arrangements, Chen et al. develop a theoretical framework to analyze how banks reallocate from bank loans to risky investments in response to monetary policy tightening. Moreover they render the empirical evidence that non-state banks, during the period 2009-2015, significantly increased their activity in promoting entrusted lending off balancing sheet. At the same time shadow banking products were brought onto the balance sheet. This behavior hampered the effectiveness of monetary policy on the total bank credit. In addition they make a contribution whether China should gradually move away from quantity-based monetary policy to interest rate monetary policy.
“The Middle-Income Trap 2.0: The Increasing Role of Human Capital in the Age of Automation and Implications for Developing Asia” is the title of the latest paper published by Prof. Dr. Helmut Wagner and Linda Glawe. In this paper, they modify the concept of the middle-income trap against the background of the Fourth Industrial Revolution and future challenges of automation. You can find the whole text here.
CEAMeS Discussion Paper No 15 | 2018
Linda Glawe and Helmut Wagner
Also distributed as SSRN Paper No. 3263458
In our paper, we modify the concept of the middle-income trap (MIT) against the background of the Fourth Industrial Revolution and the (future) challenges of automation (creating the concept of the “MIT 2.0”). In particular, we analyze the impacts of automation, artificial intelligence, and digitalization on the growth drivers of middle-income countries and the MIT mechanism. We show that automation reduces the initial growth push for developing countries and leads to an earlier MIT at the lower end of the middle-income range. In addition, once wages start rising, the necessary shift in the growth strategy (from an export-manufacturing based to an innovation-productivity based growth model) is afflicted with higher requirements, particularly regarding human capital. This in turn, will lead to a higher persistence of the trap and it will become more difficult to break out of it. Thus, the MIT 2.0 will be much more challenging than today’s “normal” MIT. Our findings suggest that improving human capital accumulation, particularly the upgrading of skills needed with the rapid advance of automation, will be key success factors for overcoming the MIT 2.0. Against this background, we elaborate the implications for developing Asia regarding their probability to experience an MIT 2.0 (with a special focus on human capital as well as higher cognitive and information communication technology skills).
We uploaded an updated version of the paper (January 23, 2019)
Read Full Article [pdf]