China Trade Research Articles

The flip side of the China syndrome: Local labor market effects in China

AbstractUS–China trade is widely thought to have contributed significantly to the decline in US manufacturing employment, sometimes called the China syndrome. Flipping the point of view, we examine its impact on Chinese local labor markets between 2000 and 2010. In prefectures most exposed to export growth, there is a pronounced increase in manufacturing employment, primarily among young, low‐educated, rural people and more for blue‐collar workers. Beyond manufacturing, there is a decline in agricultural, yet an expansion in service employment, exhibiting substantial heterogeneity across demographics. The export‐driven structural transformation is profound and long‐lasting out to 2020. Among nonworking people, export growth primarily increases school attendance and the share of people relying on family support, suggesting an income effect.

US–China trade war and key digital technology innovation of Chinese enterprises

ABSTRACT We empirically examine the impact of the US–China trade war (trade war) on Chinese firms’ key digital technological innovation (KDI) using the difference-in-difference (DID) method, considering trade war as a quasi-natural experiment. Our findings suggest that the trade war promotes Chinese firms to apply for more key digital technology patents (KDPs). Heterogeneity analysis reveals that the promotion is stronger in firms of lower leverage and high-tech industries. Additional analysis indicates that KDI helps mitigate the adverse impact of trade war on Chinese firms’ market performance.

The China trade shock and the gender wage gap in India: A district-level analysis

This study provides new evidence on the debate surrounding international trade and the gender wage gap in a developing country context. It asks whether increased competition from trade has any causal effect on the district-level gender wage gap in India. Changes in competition from trade are measured using changes in imports from China, owing to the dramatic rise in Chinese imports into India in recent years. To isolate the supply-driven component of Chinese imports and establish causality, I use Chinese import growth in other low and lower-middle-income countries as an instrument for Chinese import growth in India. Results indicate a positive and statistically significant impact of an increase in Chinese imports on the gender wage gap over time. In addition to the economy-wide sample of workers, this effect holds true for the sub-samples of casual laborers and rural sector workers where the majority of women workers in India are concentrated. Unlike previous studies using industry-level data, the district-level focus of this study allows us to capture micro-level effects, as well as the net effects of trade in the surrounding district.

Plant-level adjustments to imports and exports at the extensive margin

This paper presents an empirical analysis of plant level responses to the China trade shock based upon a DSGE framework with heterogeneous firms. The empirical analysis shows that soaring imports from China are associated with a higher probability of plant closure. By contrast, firms in export oriented industries are less likely to exit. We rationalize these findings by several counter-factual experiments based upon a DSGE framework. Imports always raise the exit rate but the export-effect is ambiguous. More exports fuel competition among domestic rivals associated with more exits. However, this competition effect disappears when the share of exporters is extremely high. The effects of imports and exports on firm entry are close to zero in both theory and empircs. We also introduce a novel productivity shock channel. Additional export sales better protect firms from other shocks. We show this by introducing negative productivity shocks into the model.

Interregional Flows of Embodied Carbon Storage Associated with Land-Use Change in China

With the continuous expansion of regional trade, interregional teleconnections have an increasingly pronounced impact on the changes in carbon storage caused by land use in China. Current research in this area remains remarkably limited, however. This study employs land-use data, carbon density data, and a multiregional input–output model to precisely quantify the embodied flow and spatial patterns of land-use carbon storage in China. We found that the carbon storage embodied in interprovincial trade in China accounts for 34.9 percent of total carbon storage, with cropland (44.9 percent) and woodland (43.6 percent) representing the highest proportions within their land-use categories. Inner Mongolia, Heilongjiang, and Tibet were found to be the most externally driven in terms of land-use-related carbon storage, with outflows exceeding 2,000 Tg C. Beijing, Tianjin, and Shanghai, on the other hand, were shown to consume up to 90 percent of land-use-related carbon storage inflows, showcasing the strongest external dependence. Additionally, Hunan (1,300.5 Tg C), Hubei (863.4 Tg C), Henan (1,534.6 Tg C), and Shanxi (2,223.6 Tg C) are the provinces where changes in land-use carbon storage are most significant, exerting the greatest influence on changes in China’s total carbon storage. China’s international export of land-use-related embodied carbon storage decreased by 3,964.7 Tg C during the study period, with woodland (1,516.8 Tg C) and grassland (1,505.7 Tg C) being the primary declining land types. Interestingly, as land utilization efficiency continues to rise, over half of the provinces have seen an increase in export trade value, while their corresponding embodied carbon storage has declined. The findings not only unveil the complex dynamics and spatial distribution at work in China’s embodied land-use-related carbon storage but also provide practical insights and directions for achieving carbon neutrality goals.

A study on the Impact of business environment on the Efficiency of China's OFDI

The increasingly widespread impact of the business environment has profoundly changed the efficiency, structure, regional layout, and investment patterns of cross-border enterprises in the current international investment arena. This study examines the digital economy of China's trade using panel data of 53 countries from 2010-2019.The empirical results show that the development of digital economy in host countries can improve the efficiency of China's outward OFDI. After multiple robustness tests, the results remain robust. Finally, the results of the heterogeneity test indicate that the level of digital economy development in high-income countries has the greatest impact on the efficiency of China's OFDI. Therefore, this paper proposes that countries should strengthen the digital economy.

What Were the Influences on These Sogdian Merchants Doing Business in China During China's War with Xiongnu?

This paper investigates the affects to the Sogdian merchants who were doing business in China during Chinas war with the Xiongnu. Several arguments were made in this paper in order to support the points made below, with actual historical events and background, which includes the Yongjia rebellion that happened in the Western Jin Dynasty in China. The Paper also relied heavily on an ancient letter to support its statements, which was written by a Sogdian merchant who used to trade in China in the Western Jin dynasty, got trapped in China and could not leave. The paper proves the security of Sogdian life, property, and trade during the period of the war between China and the Huns.

The impacts of the China–US trade war on China’s trade and greenfield investment

We assess the impacts of the China–US trade war on the bidirectional trade and investment flows of China. We find that China’s exports and imports both dropped sharply after the trade war began. In terms of investment flows, we find that China’s greenfield investment in the US faltered in the face of the increasing trade friction, but the impact of the trade war on the US’s greenfield investment in China is ambiguous. In addition, the trade friction only impeded the export volumes of China and had an insignificant impact on the export prices. In contrast, both the import volumes and prices for China decreased.

The Impact of Digital Economy on Domestic Trade and Investment Efficiency Measurement and Heterogeneity Analysis

Against the backdrop of a new round of booming technological revolution, the digital economy has brought about high-quality development for trade. This paper is based on the 2011-2019 China's trade and investment in China, which will have a profound impact on China's trade and investment. This paper is based on the2011-2019 China. The spatial panel data of 30 provinces (excluding Tibet, Hong Kong, Macao and Taiwan) were analysed by using OLS model, panel solid model and panel data. Construct correlation regression models using fixed effects model, panel random effects model, differential GMM and systematic GMM methods. type and "Digital Economy Development Level Indicator System" to study the impact of the digital economy on the efficiency of domestic trade and investment.so as to contribute to the promotion of high-level opening up to the outside world, the deepening of domestic demand strategy, and the construction of " trade power".

Political risk and firm exit: evidence from the US–China Trade War

When do political risks lead to divestment from a profitable market? Existing theories argue both that foreign investors may be sensitive to political tensions, but that they may only be sensitive to violent conflict. Using the crucial case of the US–China Trade War, we outline how political risks increased rates of exit among foreign firms while firm entrenchment mitigated these risks. Using a new dataset on all foreign-invested enterprises registered in China between 2017 and 2019, we implement triple interaction models to isolate the impact of increased political risks, investor national origin, and entrenchment on firm exit. Our findings show that heightened political risks during the trade war did increase firm exits by 34% – 3% points over the pre-conflict baseline. Tariffs, the targeted effect of the trade war, increase US firm exits by 1% point. Firm exit is determined by the balance of heightened political risks against the availability of firm-level resources to mitigate these risks. These findings reconcile the conflicting expectations of the ‘business as usual’ and ‘follow the flag’ literatures about how firms respond to political risk, highlighting the tremendous collateral damage tariffs can cause in an age of global value chains.

Temporal-spatial evolution of environmental inequality of embodied energy transfer within inter-provincial trade of China

Reducing embodied energy inequality is the key to achieve sustainable development. However, research on the spatial-temporal impacts of embodied energy transfer within inter-provincial trade and regional energy inequality is insufficient. Taking the embodied energy inequality of China as the research object, this research establishes the environmentally extended multi-regional input-output model, traces the transfer path of embodied energy and value-added along the national supply chain, and calculates the embodied energy inequality using the regional environmental inequality index. The results show that the developed eastern coastal provinces mainly outsourced the consumption-based embodied energy to the developing regions, such as the northern provinces. Among them, S3 and S4 were the key sectors responsible for embodied energy consumption. Furthermore, when the developed regions traded with the developing regions, the value-added brought by their final demand was mainly retained locally. Some developing regions suffered double losses of embodied energy and value-added, leading to embodied energy inequality. From 2012 to 2017, China's inter-provincial trade witnessed a slight increase in the degree of embodied energy inequality. This study helps to understand the mismatch between domestic environmental burden and economic benefits from the perspective of inter-provincial trade, and provides a decision-making basis for realizing regional equity.

Glasgow Merchants in the East India Trade during the 1820s and 1830s: The Case of James Finlay & Co.

While historians have frequently depicted Scottish roles in the East India trade from peripheral viewpoints, they have tended to overlook the direct contributions of merchants and manufacturers engaged in the East India trade from Scotland. This article examines the activities of Glasgow-based James Finlay & Co. in the China trade during the 1820s and early 1830s. It demonstrates that the firm already had more than a decade of experience engaging in the China trade before the complete abolition of the East India Company’s monopoly in 1834. It also argues that the Glasgow firm had a strong connection with London and extended its trading network to Manchester, where the firm outsourced its production for its consignments to the East. This research also contributes to broader East India and China trade issues at that time. Firstly, Finlay’s China operations by the East Indiamen suggest that the legality gave the Company’s vessels an advantage even after the partial opening of the East India trade in 1814. Secondly, this article highlights the significance of the roles of agency houses in the early phase of the China trade. Thirdly, the case of James Finlay & Co. demonstrates that the opening of the China trade in 1834 was not as significant an episode as conventional scholarship made it out to be. In addition, this research argues that Kirkman Finlay and other Glasgow East India interests leveraged their connection with the Canton house, which they acquired through their trial operations, to advocate for free trade with China.

Exploring the convergence of ICT, digital financial inclusion, environmental pressures, and free trade and their significance in driving sustainable green investment initiatives under carbon neutrality targets

Due to its rapid economic development over the past few decades, China is now at the forefront of environmental issues, necessitating creative solutions that combine ICT, digital financial inclusion, environmental pressure, and free trade to encourage green investment. This study aims to investigate the linkage between ICT, digital financial inclusion, environmental pressure, free trade, and green investment in China from 1996 to 2022 by employing the Partial least squares structural equation modelling (PLS-SEM). As per our results, the statistical values of Cronbach's alpha, composite reliability, and average variance are all above the cutoff point, demonstrating the applicability of this methodology. According to the structural model's results, the path coefficients between digital financial inclusion and green investment, environmental pressure and green investment, and GDP and green investment are positively significant, implying that these three factors are crucial for boosting green investment in China. In addition, our vector autoregressive model results suggest that ICT, digital financial inclusion, environmental pressures, free trade, and GDP cause green investment to rise in China. Thus, the policymakers in China should focus on developing comprehensive policies to encourage green investment in China, which is crucial for economic and environmental sustainability.

Politically Affiliated Analysts

Government ownership of financial intermediaries is pervasive around the world. In this study, we examine the impact of common government ownership between the brokerage and listed firms on the information production role of brokerage firms. We show that affiliated analysts tend to issue more optimistic recommendations for stocks of firms controlled by the same government entity that controls their brokerage firms. This optimistic bias is particularly pronounced during periods of economic shocks. Our study demonstrates this by utilizing additional tariff impositions and tariff exemptions during the U.S.–China trade war as exogenous negative and positive shocks, respectively. Additionally, our study indicates that stocks recommended by politically affiliated analysts tend to underperform those recommended by independent analysts, implying that the optimism stems from conflicts of interest rather than superior information. Furthermore, our research highlights that sophisticated investors perceive the potential bias and incorporate it into their trading. Consistent with an exchange of favors story, politically affiliated brokerage firms receive a larger allocation during the issuance of local government debt, whereas governments subscribe for more shares during seasoned equity offerings by these affiliated brokerage firms. This paper was accepted by Kay Giesecke, finance. Funding: The authors gratefully acknowledge the financial support from the National Natural Science Foundation of China [Grants 71972088, 72132002, and 71991473], the National Social Science Foundation of China [Grants 21ZDA010 and 22VRC145], and the Innovation and Talent Base for Digital Technology and Finance [Grant B21038]. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2022.00579 .

The US–China trade war and corporate innovation: Evidence from China

AbstractThis study investigates the effect of the US–China trade war on corporate innovation in the context of China. We find that the first‐order effect of the trade war on corporate innovation is significantly negative. That is, Chinese firms exposed to the US–China trade war have lower numbers of patent applications and invention patent applications. Underlying mechanisms include reductions in market expansion and innovation input. Our findings are more pronounced for firms connected to the United States and those suffering financial distress and for non‐state‐owned enterprises. We further contribute to the literature by showing that firms with developed managerial ability, more confident managers, and better corporate social responsibility performance tend to increase innovation for competitiveness in response to the trade war. Finally, we explore the effect of Chinese retaliatory tariff shocks on corporate innovation and find that US tariffs and Chinese retaliatory tariffs hinder corporate innovation in China.

Analysis of the Impact of Carbon Tariffs on China's Trade

As the impact of the financial crisis deepened, on March 17, 2009, US Energy Secretary Steven Chu prepared to impose carbon tariffs on imported goods to avoid unfair competition in the US manufacturing industry. Meanwhile, in recent years, some developed countries or regions, such as the United States and the European Union, have proposed punitive tariffs on imported products from developing countries such as China and India based on carbon content under the pretext of addressing climate change. This measure has sparked widespread international discussion. Therefore, this article takes carbon tariffs as the research object and analyzes the impact of China's carbon emissions on its export trade and the impact of international emission reduction regulations and measures on China's export trade through qualitative and quantitative analysis methods. The paper is divided into 7 chapters. Chapters 1, 2, and 3 provide explanations on the relevant concepts and development trends of carbon tariffs. Carbon tariffs are essentially border tax regulatory measures with trade protectionism attributes. Chapters 4 and 5 analyze the impact of carbon tariff policies. Chapters 6 and 7 propose corresponding strategies and suggestions based on the previous analysis.

Virtual Water Embodied in Interregional Energy Trade in China: A City-Level Analysis.

Large volumes of water are used in energy production for both primary (e.g., fuel extraction) and secondary energy (e.g., electricity). In countries such as China, with a large internal trade in fuels and long-distance transmission grids, this can result in considerable water inequalities. Previous research focused on the water impacts of energy production at the national and provincial levels, which is too coarse to identify the spatial differences and make specific case studies. Here, we take the next step toward a spatially explicit economically integrated water-use for energy assessment by combining a bottom-up assessment approach with a city-level multiregional input-output model. Specifically, we examine the water consumption of energy production in China, distinguishing between water for primary and secondary energy at the level of coal mines, oil and gas fields, and power plants for the first time. Of the total energy-related freshwater consumption of 4.9 Gm3 in 2017, primary energy accounted for 19% (940 Mm3) and secondary energy accounted for 81% (3955 Mm3). Coal was the largest water consumer for both primary and secondary energy (540 and 3880 Mm3, respectively), with both oil (361, and 0.5 Mm3, respectively) and gas (7 and 69 Mm3, respectively) also consuming large amounts. Intercity virtual water, that is, water embodied in energy trade across cities, reached 54% (2.6 Gm3) of energy-related freshwater consumption. Across China, 32% of cities see a bilateral trade in secondary- and primary-energy-related virtual water (e.g., Daqing city exports virtual water embodied in primary fuel to other cities that is then used to produce electricity in those cities, part of which is used back in Daqing via transmission). For these 32% of cities, 73% export more virtual water than import and 27% import more virtual water than export. This study reveals significant differences in city-level virtual water patterns (e.g., scale and direction) between primary and secondary energy to provide information for cities about their virtual water inflow and outflow and the potential collaboration partners for water management.

NewGen Surgical: reimagining health for people and planet

Research methodology The case study draws on structured interviews with Rob Chase, Founder and CEO of NewGen Surgical, as well as secondary data sources to analyze the effectiveness of these solutions in mitigating the risks and enhancing the company’s competitive advantage. Case overview/synopsis This case study examines how NewGen Surgical, a small- to medium-sized medical equipment manufacturer based in the USA, navigates a supply chain crisis caused by post-pandemic (COVID-19) supply and demand distress, trade restrictions, and the US–China trade war in 2022. It outlines the journey of CEO and Founder, Robert Chase, as he started, grew and is maintaining the company and its various challenges. The case study reviews the risks and vulnerabilities of the company, which heavily relies on Chinese suppliers for most of its operations. To address the supply chain challenges, the case study explores alternative solutions such as insourcing, reshoring, diversifying the supplier base, changing safety stock and implementing new technologies. The case can be designed to teach business courses such as global business, supply chain and entrepreneurship. Complexity academic level This case study is intended for undergraduate and graduate students in courses such as global business, supply chain and entrepreneurship. In addition, this case study may be incorporated with modules on learning organizations, knowledge management and entrepreneurship to aid students in comprehending the principles of global sourcing, offshoring and supply chain management.

Compromise in hard times? The impact of deglobalization on corporate social responsibility in the US–China supply chain

AbstractThis study examines the effect of the US–China trade tensions on the corporate social responsibility (CSR) performance of the Chinese suppliers most affected by the 2018 US tariff surges. Using a difference‐in‐differences approach, we find that Chinese suppliers with direct US corporate customers experience a significant decline in CSR performance, compared with their peers without direct US corporate customers. We also show that the adverse effect of tariff surges on Chinese suppliers’ CSR performance is concentrated among those with a strong cost leadership strategy. However, the CSR performance of Chinese suppliers that have direct US corporate customers with high CSR awareness is not affected by the tariff surges. Further analyses reveal that the negative effects of the trade tensions on CSR performance are felt most strongly by the employees of Chinese suppliers. Taken together, despite the challenges posed by the deglobalization wave to the diffusion of CSR across global supply chains, the increasing demand for CSR involvement from US corporate customers can exert significant pressure on Chinese suppliers’ CSR performance.

Natural disasters and agricultural trade in China: analyzing the role of transportation, government and diplomacy

PurposeNatural disasters profoundly influence agricultural trade sustainability. This study investigates the effects of natural disasters on agricultural production imports in China within 2002 and 2018. This exploration estimates the mediating role of transportation infrastructure and agriculture value-added and the moderating role of government effectiveness and diplomatic relations.Design/methodology/approachThis investigation uses Probit, Logit, Cloglog and Ordinary Least Squares (OLS) models.FindingsThe results confirm the mediating role of transportation infrastructure and agriculture value-added and the moderating role of government effectiveness and diplomatic relations in China. According to the findings, natural disasters in trading partners heighten the risk to the agricultural imports. This risk raises, if disasters damage overall agricultural yield or transportation infrastructure. Moreover, governments’ effective response or diplomatic ties with China mitigate the risk. Finally, the effect of disasters varies by the developmental status of the country involved, with events in developed nations posing a greater risk to China’s imports than those in developing nations.Originality/valueChina should devise an early warning system to protect its agricultural imports by using advanced technologies such as data analytics, remote sensing and artificial intelligence. In addition, it can leverage this system by improving its collaboration with trading partners, involvement in international forums and agreement for mutual support in crisis.