Wednesday, 21 May 2014

Conducting field work in China

Useful post from Sinograduate. Click the link to see expanded descriptions of each point.

Conducting Field Work in China

If youre a masters or Ph.D. student conducting social science research on China for your thesis or dissertation, at some point you might find yourself in China for fieldwork. Having recently spent a year in China for my own dissertation fieldwork, here are some suggestions for a successful (or at least not overwhelmingly painful) fieldwork experience in China.
1) You’ll need an affiliation. 
2) Don’t necessarily affiliate at the top universities. 
3) Load up on your guanxi.
 
4) Have copies of an affiliation letter from your institution for cold calls. 
5) It’s easier to say no on the phone than it is in person. 
6) Hire a Chinese research assistant to bring to meetings with you. 
7) Come bearing gifts.

Monday, 12 May 2014

What Should Economists Know about the Current Chinese Hukou System?

Research paper. Impacts on all aspects of research on the Chinese economy.

What Should Economists Know about the Current Chinese Hukou System? 

Yang Son

Abstract

This article explains the current hukou system in China and provides the most recent evidence on the impact of the hukou system on the Chinese labor market and economy. By a comprehensive literature survey, this paper shows that the hukou system plays in two major roles in current China. First, workers with different hukou face different costs of living in cities and have different access to government-provided public services and welfare programs in the urban areas. Migrants with rural and non-local hukou working in the Chinese big cities have no or little access to welfare programs provided by local city governments. Second, there exists labor market discrimination against rural hukou holders in cities, especially in the urban high-wage sector such as state-owned enterprises. The current hukou system has a negative impact on rural-to-urban migration in China as well as on economic efficiency and equality by reducing the expected benefits associated with migration.

Friday, 9 May 2014

Are China's Financial Markets Deep and Liquid enough for RMB internationalisation?

Could China internationalise the RMB?

This paper examines the case for China and concludes it is not there yet.  How long?  Perhaps not as long as you might expect.  Obstacles in China have a way of disappearing when they need to.




ADBI Working Paper 477

PRINCE CHRISTIAN CRUZ, Asian Development Bank

YUNING GAO,
Tsinghua University

LEI LEI SONG,
Asian Development Bank
 

Domestic financial market development is a key determinant of a currency’s international status, and financial depth and market liquidity are two essential attributes for an international currency. This paper discusses the status of the People’s Republic of China’s (PRC) financial markets and their depth and liquidity conditions. The paper also compares the PRC’s financial markets with those in developed and emerging economies, contemporaneously and historically. The paper finds that the PRC’s financial markets are not as deep and liquid as those in developed economies, and are much less so than those with international currencies. To support the internationalization of the renminbi, the PRC needs to remove several major obstacles to deepen its financial markets and improve their liquidity conditions.

Friday, 11 April 2014

Image of the day

For some reason I find this figure interesting.


Understanding Chinese Consumption: The Impact of Hukou

Rebalancing hinges on China increasing consumption.  It has long been acknowledged that the Hukou system is an institutional blockage on consumption driven rebalancing.  This new working paper looks at this important issue.

Understanding Chinese Consumption: The Impact of Hukou

BOFIT Discussion Paper No. 7/2014

CHRISTIAN DREGER, German Institute for Economic Research (DIW Berlin), European University Viadrina Frankfurt (Oder), Institute for the Study of Labor (IZA), Chinese Academy of Social Sciences (CASS)

TONGSAN WANG, Chinese Academy of Social Sciences (CASS)

YANQUN ZHANG, Chinese Academy of Social Sciences (CASS)


Capital investment and exports have driven China’s remarkable economic growth for decades, but recent trends have put pressure on the government to move to a more consumption-driven model of growth. Unfortunately, China’s institutional framework does little at the moment to spur household consumption. While the country’s weak social security setup and highly regulated financial markets are routinely cited as disincentives to private consumption, the role of the hukou household registration system in depressing consumption gets less attention. Controlling for income levels on datasets from 2002 and 2007, we show the average propensity to consume is significantly lower for internal migrants to cities. Official figures suggest that China in 2013 had about 260 million internal migrants. These individuals are often separated from their families for long periods and denied access to public services in the cities where they work. The government’s current urbanization strategy calls for increasing migrant populations in cities, which, in the absence of hukou reform, is likely to further dampen consumption.

Wednesday, 9 April 2014

The Conflicted Emergence of the Renminbi as an International Currency

Research paper by McKinnon and Schnabl (CESifo).  I agree with the sentiment expressed in this paper.  Internationalization of the RMB will be a massive challenge with plenty of pitfalls along the way.




CESifo Working Paper Series No. 4649

RONALD MCKINNON, Stanford University - Department of Economics, CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

GUNTHER SCHNABL,
University of Leipzig - Institute for Economic Policy, CESifo (Center for Economic Studies and Ifo Institute)

China has been provoked into speeding renmnibi internationalization. But despite rapid growth in offshore financial markets in RMB, the Chinese authorities are essentially trapped into maintaining exchange controls — reinforced by financial repression in domestic interest rates — to avoid an avalanche of foreign capital inflows that would threaten inflation and asset price bubbles by driving nominal interest rates on RMB assets down further. Because a floating (appreciating) exchange rate could attract even more hot money inflows, the People’s Bank of China should focus on tightly stabilizing the yuan/dollar exchange rate to encourage naturally high wage increases for balancing China’s international competitiveness.

Thursday, 27 March 2014

China: Size matters

Nice little IMF article. http://blog-imfdirect.imf.org/2014/03/26/china-size-matters/

"How big is China?
  
Big. China is the world’s second largest economy. Based on PPP exchange rates, China increased from 6 percent of global output in 1995, to 15 percent last year (see chart). Or, if you prefer using market exchange rates, the corresponding rise in China’s share of global GDP is from 2 percent in 1995 to 12 percent in 2013.

When will China surpass the US? In 2018, based on PPP exchange rates. Later using market exchange rates—by 2019, the last year of our projections, China’s economy would be equivalent to about 64 percent of US GDP."