【目录】《中国与世界经济》（China & World Economy）2022年第2期

China & World Economy  / 1–27, Vol. 30,  No. 2, 2022

Does Horizontal-Paradigm Aid Weaken the Governance of Recipient Countries? Evidence from China

Luhao Liu, Xudong Hu, Zhongxiu Zhao

Abstract

China’s aid has always been an interesting topic in the field of development economics, and the effectiveness of aid is also a controversial subject in the literature. This paper explores the relationship between China’s aid and the governance of its recipient countries from 2000 to 2014. We found that, compared with the “vertical paradigm” of traditional donors, China’s “horizontal paradigm” has unique features, promoting the governance of recipient countries. We employed a cross-sectional estimation and panel analysis with several regression methods. While our cross-sectional findings did not yield robust evidence to support a relationship between Chinese aid and its recipients’ governance, our panel data regressions found a significant and positive relationship. The results were robust in a dynamic panel, even after correcting for endogeneity. Thus, China’s aid has a positive influence on governance with the inclusion of time series. The relationship was found to vary according to aid types.

China & World Economy  / 28–59, Vol. 30,  No. 2, 2022

What Drives Chinese Firms’ Export Sophistication? A Perspective from the Rise of Minimum Wages

Xiaoping Li, Shuzhou Peng, Wei-Chiao Huang, Qian Zhou

Abstract

This paper re-examines the driving factors behind the upgrading of China’s export sophistication. Based on county-level minimum wages and firm-level export data for 2000–2013, this paper finds that the labor cost shocks caused by rising minimum wages have a significant positive impact on Chinese firms’ export sophistication. Channel tests show that the positive effect of rising minimum wages on firms’ export sophistication derives from the exit of less sophisticated products and the reallocation of the relative share of surviving products, rather than introducing new highly sophisticated products. Heterogeneity analysis reveals that rising minimum wages have a greater impact on export sophistication for low-wage firms, domestic firms, and labor-intensive firms. This paper has implications for developing countries regarding the transition from a low-cost labor trade model to a sophistication-driven trade model.

China & World Economy  / 60–83, Vol. 30,  No. 2, 2022

Has the Belt and Road Initiative Improved the Quality of Food Imported by Chinese Enterprises?

Kexuan Zhou, Sanjay Kumar, Futao Lu, Qiaoyun Fang, Linhui Yu

Abstract

Using micro-level data from 2009–2015 and the difference-in-difference method, this paper empirically examines the impact of the Belt and Road Initiative (BRI) on the quality of food imported by Chinese enterprises from BRI countries. Our baseline results show that the BRI significantly improved the quality of food imported from these countries. Further investigation reveals that trade patterns, ownership types, import regions, transportation methods, and product quality show significant heterogeneous effects in influencing the quality of imported food. A mechanism analysis indicates that the BRI improves the quality of imported food through three main channels: import trade environment enhancement, competition effect, and consumption upgrading, with the competition effect having the largest impact compared with the other two channels. Our findings suggest that China should not only improve the infrastructure in BRI countries but also use the BRI as an opportunity to enhance the level of cooperation with BRI countries and maintain stability and sustainability in cooperation with them.

China & World Economy  / 84–116, Vol. 30,  No. 2, 2022

Does Bank Competition Promote Corporate Green Innovation? Evidence from the Location of Bank Branches

Yufeng Xia, Peisen Liu

Abstract

Based on the geographic coordinates of bank branches and firms, this study analyzes the impact of firm-level bank competition on corporate green innovation and its underlying mechanisms. The findings of this study are mainly as follows. First, bank competition promotes corporate green innovation by reducing transaction costs, increasing the possibility and quantity of firms applying for green patents. Second, bank competition increases the share of green innovation while reducing the share of nongreen innovation. Third, environmental regulation strengthens the promotion effect of bank competition on corporate green innovation, and the strengthening effect is greatest when environmental regulation is between its 50th and 75th quantile. The proportion of state-owned banks weakens the promotion effect of bank competition on corporate green innovation. This paper is helpful to understand the impact of the banking system on sustainable economic development.

China & World Economy  / 117–141, Vol. 30,  No. 2, 2022

Higher Education Expansion in China, 1999–2003: Impact on Graduate Employability

Dongshu Ou, Zhong Zhao

Abstract

We examine the impact of China’s higher education expansion on labor market outcomes for young college graduates using China’s 2005 1 Percent Population Sample Survey. Exploiting variations in the expansion of university places across provinces and high school cohorts between 1999 and 2003, we apply a difference-in-differences model and take into account the demand-side effect by using the Bartik index. We find that the expansion of higher education in China decreased unemployment rates among males and college graduates in the short term. However, the policy decreased women’s labor force participation and individual earnings in high-skilled white-collar jobs. We further discuss potential channels affecting the outcomes that were observed. Our results illustrate the broad economic benefits of higher education. The findings shed new light on the contribution of young skilled labor in the economic growth of China and call for policies that can alleviate the short-term negative impact of higher education on individual students and maximize human capital. Our study also provides an interesting example of the consequences of the unequal expansion of higher education opportunities on the labor market of an emerging economy.

China & World Economy  / 142–166, Vol. 30,  No. 2, 2022

Decomposition Analysis of Poverty Reduction in Rural China: 2007–2018

Chuliang Luo

Abstract

Using the last three waves of the rural household surveys conducted by the Chinese Household Income Project in 2007, 2013, and 2018, this paper focuses on changes in poverty in rural China. The paper decomposes poverty change into the growth effect and the inequality effect, and also decomposes the contributions of income components, concentrating particularly on income from public transfers. Economic growth had a very significant poverty reduction effect for both absolute and relative poverty, but the inequality effect mostly offset it; in total, absolute poverty reduced significantly, and relative poverty increased from 2007 to 2018. Local wage income became the main contributor to both absolute and relative poverty reduction, replacing household agricultural operational income, and the contribution of wage income from migration declined. Public transfers effectively reduced absolute poverty but not relative poverty.

China & World Economy  / 167–196, Vol. 30,  No. 2, 2022

Mixed Monetary–Fiscal Policies and Macroeconomic Fluctuations: An Analysis Based on the Dynamic Stochastic General Equilibrium Model

Xi Wang, Jiayang Li, Guangbin Zhang

Abstract

The existing literature on macroeconomic policy research is mainly concerned with the impact of a single monetary or fiscal policy on China’s macroeconomic fluctuations in a closed economy. However, the effect of a mix of monetary and fiscal policies has been neglected. This paper addresses this issue with an open economy dynamic stochastic general equilibrium model. It applies impulse-response and welfare analyses to explore the stabilization effect of various mixes of monetary and fiscal policies. The results show that the optimal monetary policy and fiscal policy mix varies in different cases. When government spending shocks happen, the aggressive fiscal policy and passive monetary policy would be the best choice. In contrast, for domestic interest rate shocks, foreign interest rate shocks, and foreign consumption shocks, the passive fiscal policy and aggressive monetary policy are more applicable. This article explains China’s economic fluctuations and highlights the importance of mix of monetary and fiscal policies in the face of different shocks.

China & World Economy  / 197–214, Vol. 30,  No. 2, 2022

Exports to China and Local Employment in South Korea

Jiyoung Kim, Sun Go

Abstract

We estimate the effect of exports to China on local employment in South Korea, exploiting variations in trade and employment across 220 South Korean municipalities between 2007 and 2017. To identify the effect of exports on employment, we use a novel instrument: China’s exports to the US. This isolates the demand-side factors for South Korean exports to China from the supply-side factors that lead to biased estimations using ordinary least squares regressions. The results of a two-stage least squares estimation using municipality-level data confirm that increased exports to China contribute to a rise in employment in South Korean local labor markets. This effect occurs mostly in the service and construction industries rather than in the manufacturing sector.

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