China Economic Quarterly International (CEQI)

Volume 4, Number 3

September 2024

 

Trade unions and the wage gap between rural migrant and local urban workers in China

Xinxin Ma, Sho Komatsu

 

The impact of real estate market risks on the issuance costs of urban investment bonds: Evidence from China

Yan Dong, Dingyuan Hu

 

Promoting corporate independent innovation through judicial protection of intellectual property rights

Dong Chen, Shi Chen

 

The return of protectionism: Prospects for Sino-US trade relations in the wake of the trade war

Hong Ma, Jingxin Ning

 

PA friend indeed to friends in need? China's trade regime and Covid-19 vaccine diplomacy

Indra de Soysa, Krishna Chaitanya Vadlamannati

 

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Trade unions and the wage gap between rural migrant and local urban workers in China

Xinxin Ma, Sho Komatsu

Abstract

This study estimates union wage premiums and analyzes the influence of trade unions on the wage gap between rural migrants and local urban workers in China by employing the Blinder–Oaxaca decomposition method based on national longitudinal survey data from the China Family Panel Studies (2010–2018). The results indicate that the union wage premium among rural migrant workers is greater than that among local urban workers. The disparity in union density widens the wage gap, whereas the difference in union wage premiums narrows the wage gap between the two groups. Moreover, the contribution rate of the former is greater than that of the latter. These results suggest that expanding union coverage among rural migrant workers could effectively contribute to reducing the wage gap.

 

The impact of real estate market risks on the issuance costs of urban investment bonds: Evidence from China

Yan Dong, Dingyuan Hu

Abstract

It has been widely believed that bond spreads are positively correlated with related market risks. However, some studies in China's urban investment bond (UIB) market indicate that an increase in real estate market risks usually narrows UIB spreads. This article focused on such puzzle and introduced a quadratic form regression to detect a U-shaped relationship between housing price volatility and UIB spreads, which confirms that UIB pricing is actually in consistence with the traditional bond theory. We further indicated that spreads of guaranteed UIBs were barely affected by housing price volatility, and fiscal transparency seemed to mitigate such volatility's impact on the issuance costs of UIBs. Those findings not only illuminate ways of mitigating risks in the UIB market in China using market instruments but also have important implications for how local governments around the world can mitigate their debt-related problems.

 

Promoting corporate independent innovation through judicial protection of intellectual property rights

Dong Chen, Shi Chen

Abstract

This study examines the impact of judicial protection of intellectual property rights on firms' independent innovation. Using a staggered difference-in-differences model with panel data from Chinese manufacturing listed businesses (2014–2021) and the successive establishment of intellectual property courts in Chinese prefectural-level cities as a quasi-natural experiment, we find that establishing intellectual property courts in China encourages businesses to accumulate more technology-based intangible assets. Mechanism analysis suggests that judicial intellectual property protection enhances enterprises' independent innovation capacity by establishing a conducive institutional framework. This stimulating effect is particularly significant for industry-leading companies with technological supremacy. Heterogeneity analysis reveals that judicial intellectual property protection increases the generation of patents and trade secrets, with a more pronounced effect on firms receiving higher government research and development subsidies and better tax incentives. This study offers valuable insights for policymakers to encourage corporate independent innovation.

 

The return of protectionism: Prospects for Sino-US trade relations in the wake of the trade war

Hong Ma, Jingxin Ning

Abstract

Over the past six years, the Sino-US trade war has not only reshaped the relationship between the world's two largest economies but also profoundly influenced the global economic and trade patterns. This paper reviews the background, process, and implications of the Sino-US trade war, examining its impact on China, the United States, and the broader global trade landscape across various socioeconomic dimensions. We begin by reviewing the development of Sino-US trade relations in the past 20 years. Next we detail the background and evolution of the trade war. We then discuss the economic consequences of the conflict, including the effect of tariff increases on product prices, employment, investment, consumption, and welfare. Finally, we explore the reshaping of supply chains in the aftermath of the trade conflict, and the interaction between trade policies and industrial policies within the context of the Sino-US trade war.

 

Existing literature indicates that the Sino-US trade war has resulted in significant welfare losses for both countries, with surprisingly little impact on employment. The tariffs have not achieved the intended outcome set by policymakers. Specifically, the additional tariffs imposed by the United States on China have neither effectively addressed trade imbalances nor brought manufacturing jobs back onshore. Our paper offers a new perspective on the complexity of the current international trade conflict.

 

A friend indeed to friends in need? China's trade regime and Covid-19 vaccine diplomacy

Indra de Soysa, Krishna Chaitanya Vadlamannati

Abstract

Employing newly available data on Chinese Covid-19 vaccine deliveries for a cross-section of 157 countries, we examine if China's vaccine diplomacy is driven by altruistic, enlightened self-interested motives or by purely strategic motives. According to the enlightened self-interested logic, China's vaccine supply would coincide with helping countries dependent on China for trade, i.e. its trading friends, while the strategic logic would entail providing vaccines to countries important commercially to China. In other words, the gravity of the Covid situation would be leveraged by China for strategic gain. Utilizing the logit estimator on probability of receiving vaccines from China and Tobit estimator on vaccine purchases and donations, we find that developing countries that are important to China's trade, and thereby, China's own commercial interests were less likely to get vaccines compared with countries that are more dependent on China. Furthermore, we find that countries more dependent on China are also likely to receive vaccine donations rather than purchases, suggesting that vaccine diplomacy was unlikely to be for commercial and strategic gain. Our results taken together signify that vaccine deliveries by China were not manipulated by trade interests in Beijing. The results suggest instead that China supplied vaccines to countries needing them and with whom Chinese goodwill reflects a more normal course of diplomacy—to service friends in need.