Call for Papers – East Asia Forum: Economic (Dis)integration in London

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”

“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”

“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”

“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”

“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”

“The persistence of trade policy in China after WTO accession”

Jason Garred

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”

“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”

„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.

 

CEAMeS Discussion Paper 15 now online

“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 DP15] – “The Middle-Income Trap 2.0: The Increasing Role of Human Capital in the Age of Automation and Implications for Developing Asia” [Updated Jan 2019]

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]

New CEAMeS Discussion Paper (CEAMeS DP 14) published

Professor Dr. Helmut Wagner and Michael Murach published a new CEAMeS Discussion Paper. The paper “Avoiding the middle-income trap: Korean lessons for China?” has been written together with Dr. Jungsuk Kim (from Sejong University in Seoul) and Dr. Donghyun Park (from the Asian Development Bank in Manila). The paper analyses and compares the pattern of economic growth and development of China and Korea in the post-war period. It is the first CEAMeS Discussion Paper that was written within an international collaboration. Dr. Donghyun Park also gave a guest lecture at the FernUniversität in Hagen in October 2016. You can find the full text here.

[CEAMeS DP14] – “Avoiding the middle-income trap: Korean lessons for China?”

CEAMeS Discussion Paper No 14 | 2018

Michael Murach, Helmut Wagner, Jungsuk Kim and Donghyun Park

We analyze and compare the pattern of economic growth and development of China and South Korea in the postwar period. Geographical proximity and cultural affinity between the two countries, as well as the key role of the developmental state in the economies of both countries, suggests that an analytical comparison would be a meaningful and valuable exercise. Furthermore, Korea is one of the few economies that jumped from middle income to high income in a short period, and thus offers potentially valuable lessons for China. The Asian giant moved from low income to middle income very quickly but now faces the challenge of graduating to high income. In this paper, we empirically assess the main drivers of economic growth in China and Korea, and then identify the time period when Korea was at a similar state of structural change as today’s China. In addition, we examine the trend and pattern of Korea’s economic growth from that point on. We will analyze and compare key reforms that promoted growth in the two countries. Lastly, we sift through our empirical evidence to assess the prospects for China to follow Korea’s footsteps in transitioning from middle income to high income relatively quickly.

Read Full Article [pdf]

“Border Effects without Borders: What Divides Japan’s Internal Trade?”

“Border Effects without Borders: What Divides Japan’s Internal Trade?”

Jens Wrona

In: International Economic Review, Volume 59 (August 2018), Issue 3, Pages 1209-1262

This article identifies a “border” effect in the absence of a border. The finding that trade between east and west Japan is 23.1% to 51.3% lower than trade within both country parts is established despite the absence of an obvious east–west division due to historical borders, cultural differences, or past civil wars.

“The chinese saving rate: Long-term care risks, family insurance, and demographics”

“The chinese saving rate: Long-term care risks, family insurance, and demographics”

Ayşe İmrohoroğlu and Kai Zhao

In: Journal of Monetary Economics, Vol 96, June 2018, Pages 33-52

A general equilibrium model that properly captures the risks in old age, the role of family insurance, changes in demographics, and the productivity growth rate is capable of generating changes in the national saving rate in China that mimic the data well.

“Tariff scares: Trade policy uncertainty and foreign market entry by Chinese firms”

“Tariff scares: Trade policy uncertainty and foreign market entry by Chinese firms”

Meredith Crowley, Ning Meng and Huasheng Song

In: Journal of International Economics, Vol. 114, September 2018, Pages 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.