China Economic Quarterly International (CEQI)

Volume 1, Number 4

December 2021

 

What are public development banks and development financing institutions? ——qualification criteria, stylized facts and development trends

Jiajun Xu, Régis Marodon, Xinshun Ru, Xiaomeng Ren, Xinyue Wu

 

Re-estimating national wealth inequality with incorporating the rich lists in China

Chuliang Luo, Guoqiang Chen

 

The unintended impact of housing provident fund on income inequality in urban China

Yunhe Lu, Haiyuan Wan

 

The special economic zones and innovation: Evidence from China

Min Wu, Chong Liu, Jiuli Huang

 

Does VAT retention rate affect firms’ capacity utilization? Evidence from China

Longjian Yang, Shigang Li, Shengyu Liu, Heng Yin

 

The impact of lockdown policies on labor market outcomes of the Chinese labor force in 2020: Evidence based on an employee tracking survey

Dandan Zhang

 

China Economic Quarterly International (CEQI) 为开放存取(open access)刊物，请访问 https://www.sciencedirect.com/journal/china-economic-quarterly-international/vol/1/issue/4，免费下载论文。

 

What are public development banks and development financing institutions? ——qualification criteria, stylized facts and development trends

Jiajun Xu, Régis Marodon, Xinshun Ru, Xiaomeng Ren, Xinyue Wu

Abstract

Public development banks and development financing institutions are experiencing renaissance worldwide, but systematic academic research is patchy. The bottleneck mainly boils down to the lack of data, which has constrained the meaningful research on the rationales of establishing PDBs and DFIs and reasons for their successes and failures. To fill the gap, we aim to answer the fundamental question of “what PDBs and DFIs are” by proposing five qualification criteria, i.e., being a stand-alone entity, using the fund-reflow-seeking financial instruments as main products and services; funding sources going beyond the periodic budgetary transfers; the proactive public policy orientation, and government steering of their corporate strategy. Furthermore, we have systematically identified over 500 PDBs and DFIs that meet the five qualification criteria worldwide. Based on the first-hand data collection, we present the stylized facts (including ownership structure, official mandate, geographical scope of operation, asset size, and income groups) and development trends of worldwide PDBs and DFIs. We hope that this first global database on PDBs and DFIs can lay the foundation for the original academic and policy research.

 

Re-estimating national wealth inequality with incorporating the rich lists in China

Chuliang Luo, Guoqiang Chen

Abstract

Using the two annual rich lists of Forbes and Hurun, this study estimated the parameters of Pareto distribution to describe the features of the top tail of the wealth distribution. The wealth inequality for the whole population was re-estimated by the combination of estimated Pareto distribution and household surveys, CHIP2013, CFPS2012 and CFPS2016. The robustness of estimated Pareto coefficients and the possibility of the rich missing from the lists were also discussed in detail. The wealth inequality for the whole population was estimated at different assumptions on the combination of the top tail of wealth distribution and the household survey. The wealth Gini in the CHIP and CFPS data were as high as 0.619 and 0.736. The estimated wealth Gini minorly increased by the combination with the top tail of wealth distribution by the relative criterion, while exceeded 0.8 by the absolute criterion.

 

The unintended impact of housing provident fund on income inequality in urban China

Yunhe Lu, Haiyuan Wan

Abstract

We use the China Household Income Project (CHIP) data to evaluate the impact of the Housing Provident Fund (HPF) on income inequality in urban China. We find that urban residents differ significantly in their accessibility to and intensity of utilization of the HPF. Those who work in the public sector, in monopolistic industries, and possess managerial or professional occupations are more likely to benefit from the HPF, leading to further income inequality. Our research also emphasizes four mechanisms through which the HPF affects income inequality. The foregone interest due to compulsory HPF saving is the only mechanism that decreases the inequality, whereas the employer's match, personal income tax exemption on the HPF, and lower interest expense due to acquiring the HPF loan increase inequality. The evidence highlights the HPF's unintended redistributive impacts and thus the necessity of enhancing equity in the ongoing HPF reform.

 

The special economic zones and innovation: Evidence from China

Min Wu, Chong Liu, Jiuli Huang

Abstract

We examine the impact of Special Economic Zones (SEZs) on innovation using China's county-level data from 1985 to 2011. Results show that the establishment of SEZs promotes a county's innovation in terms of application, grant and citation numbers of patents by 15%–25%, 8%–22% and 15%–25%, respectively. The promoting effect of establishing high-tech SEZs is higher than that of establishing economic and technological SEZs. Compared with provincial SEZs, national SEZs have a greater effect on innovation. Counties with universities nearby apply for more patents. The SEZs not only promote innovation in existing technical fields, but also continuously expand new research fields. The SEZs promote innovation by providing tax credits, technological subsidies and attracting more enterprises.

 

Does VAT retention rate affect firms’ capacity utilization? Evidence from China

Longjian Yang, Shigang Li, Shengyu Liu, Heng Yin

Abstract

Value-added tax (VAT) is shared between central and local governments, and is levied based on firms' production location, which provides incentives for local governments to intervene in firms' production. This paper investigates how local governments' VAT retention rate affect firms' capacity utilization theoretically and empirically. We find that the more VAT retained by local governments', the lower the firm's capacity utilization. Our findings suggest the fiscal and taxation system reform should correct local governments' improper incentives and eliminate the negative effects of the distorted intergovernmental fiscal relationships on firms.

 

The impact of lockdown policies on labor market outcomes of the Chinese labor force in 2020: Evidence based on an employee tracking survey

Dandan Zhang

Abstract

This paper uses data from an employee tracking survey in China for about 6000 incumbent workers to document their dynamic labor market outcomes throughout the year 2020. I find that the employment situation worsened sharply during the lockdown period and then recovered gradually, showing a “V” shaped pattern. However, by the end of November 2020, about 4.4 per cent of 2019 incumbent workers were still unemployed, with few social protections. By adopting a Difference-in-Differences approach, I further estimate the impacts of city and community lockdowns on labor market outcomes of surveyed employees and their mental health. The estimation results show that lockdowns reduced the probability of resuming work by 13.2 percentage points, which in turn worsened their mental health status. My findings suggest that stringent measures to counter the virus brought about negative shocks in the labor market and reduces the welfare of workers, at least in the short run.