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581. China and Emerging Asia: Comrades or Competitors?

Author:
John W. Schindler, John G. Fernald, Prakash Loungani, and Alan J. Ahearne
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Do increases in China's exports reduce exports of other emerging Asian economies? We find that correlations between Chinese export growth and that of other emerging Asian economies are actually positive (though usually not significant), even after controlling for trading-partner income growth and real effective exchange rates. We also present results from a VAR estimation of aggregate trade equations on the relative importance of foreign income and exchange rates in determining Asian export growth. Although exchange rates do matter for export performance, the income growth of trading partners matters even more. In addition, we examine specific products and find evidence that a considerable shifting of trade patterns is taking place, consistent with a 'flying geese' pattern in which China and ASEAN-4 move into the product space vacated by the NIEs. Our results suggest that China and emerging Asia are both comrades (overall) and competitors (in specific products).
Topic:
Economics and Emerging Markets
Political Geography:
China and Asia

582. Clean Air for Asia - China - India - Japan - United States Cooperation to Reduce Air Pollution in China and India

Author:
Richard L. Lawson, John R. Lyman, Donald L. Guertin, Tarun Das, Shinji Fukukawa, and Yang Jike
Publication Date:
07-2003
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
For China and India, rapid economic growth is imperative to alleviate poverty, raise income levels and improve their citizens' quality of life. In 2000, China and India's combined populations of 2.3 billion represented over 38 percent of the world's population. With both countries determined to grow their economies rapidly, there will be an associated rapid rise in energy demand. One of the most significant problems facing the two countries is the existing and increasing level of air pollution that will accompany growing energy consumption. This report focuses on the challenge of developing economic, energy, and environmental policies that will complement existing policies designed to reconcile the drive for economic growth with the need for greater environmental protection of air quality.
Topic:
Economics and Environment
Political Geography:
United States, Japan, China, India, and Asia

583. Externalities in Rural Development: Evidence for China

Author:
Martin Ravallion
Publication Date:
07-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper tests for external effects of local economic activity on consumption and income growth at the farm household level using panel data from four provinces of post-reform rural China. The tests allow for nonstationary fixed effects in the consumption growth process. Evidence is found of geographic externalities, stemming from spillover effects of the level and composition of local economic activity and private returns to local human and physical infrastructure endowments. The results suggest an explanation for rural underdevelopment arising from underinvestment in certain externality-generating activities, of which agricultural development emerges as the most important.
Topic:
Development and Economics
Political Geography:
China and Asia

584. Trade Liberalization, Agriculture, and Poverty in Low-income Countries

Author:
Kym Anderson
Publication Date:
03-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper offers an economic assessment of the opportunities and challenges provided by the WTO's Doha Development Agenda, particularly through agricultural trade liberalization, for low-income countries seeking to trade their way out of poverty. After discussing links between poverty, economic growth and trade, it reports modelling results showing that farm product markets remain the most costly of all goods market distortions in world trade. It focuses on what such reform might mean for countries of South Asia and sub-Saharan Africa in particular, both without and with their involvement in the MTN reform process. What becomes clear is that if those countries want to maximize their benefits from the Doha round, they need also to free up their own domestic product and factor markets so their farmers are better able to take advantage of new market-opening opportunities abroad. Other concerns of low-income countries about farm trade reform also are addressed: whether there would be losses associated with tariff preference erosion, whether food-importing countries would suffer from higher food prices in international markets, whether China's WTO accession will provide an example of trade reform aggravating poverty via cuts to prices received by Chinese farmers, and the impact on food security and poverty alleviation. The paper concludes with lessons of relevance for low-income countries for their own domestic and trade policies.
Topic:
Agriculture, Economics, Emerging Markets, International Trade and Finance, and Poverty
Political Geography:
Africa and China

585. Asian Oil Market Outlook: Role of the Key Players

Author:
Jeffrey Brown and Kang Wu
Publication Date:
10-2003
Content Type:
Policy Brief
Institution:
East-West Center
Abstract:
The Asia Pacific region's dynamic oil market is marked by strong growth in consumption, declining regional oil production, and over capacity in its highly competitive oil-refining sector. Its "key players" are China, India, Indonesia, Japan, and South Korea—a group that includes the region's five top consumers and three of its major producers—and developments in these countries will have commercial and strategic implications for the whole region. On the consumption side, Japan's slow growth in demand has failed to dampen regional growth, which is now driven by China and India's fast growing thirst for oil. On the supply side, Indonesia's inevitable transition to a net oil importer highlights the trend toward growing dependence on Middle East oil, which already comprises 42–90 percent of imports among the key players. In response to this trend, China, Japan, and South Korea are pushing to acquire overseas oil reserves, with Japan and China already locked in a fierce competition for projected Russian supplies—a type of struggle that will likely become more commonplace.
Topic:
Economics and International Trade and Finance
Political Geography:
Japan, China, Indonesia, Middle East, India, Asia, and South Korea

586. The Move to Preferential Trade in the Western Pacific Rim

Author:
John Ravenhill
Publication Date:
06-2003
Content Type:
Policy Brief
Institution:
East-West Center
Abstract:
Western Pacific Rim states have been slow to participate in preferential trade agreements (PTAs). In the past four years, however, more than 40 PTAs involving these economies have been proposed or are being implemented. For the first time, Japan and China have either signed or are negotiating bilateral or plurilateral agreements. The new interest in PTAs reflects the perception that they have been successful in other parts of the world, and is reinforced by dissatisfaction with the region's existing trade groupings. Although arguments can be made in favor of PTAs, they amplify political considerations in trade agreements, may adversely affect the political balance in participating countries, impose costs on nonparticipants, and deplete scarce negotiating resources. Nevertheless, the number of western Pacific Rim states participating in PTAs continues to climb. Northeast Asian countries have been following Europe in exploiting loopholes in WTO rules on PTAs to protect their noncompetitive sectors, thereby strengthening their political positions, which will likely make global liberalization more difficult.
Topic:
Economics and International Trade and Finance
Political Geography:
Japan, China, Asia, and Australia/Pacific

587. China's State-Owned Enterprises: Thriving or Crumbling?

Author:
Christopher A. McNally
Publication Date:
02-2003
Content Type:
Policy Brief
Institution:
East-West Center
Abstract:
Even though China's state firms lost their near-monopoly status after 1978, they still form the country's financial and industrial nucleus.Nevertheless, in early 1996 the total losses of these state-owned enterprises (SOEs) exceeded profits for the first time. With the economy threatened, offi-cialdom issued a mandate in 1997: SOEs must become profitable in three years. In 2001, statistics showed a massive turn around, and victory was declared. Despite doubts about the official statistics, substantial improvement did seem evident. The question was, what caused it? While massive layoffs and corporate restructuring did increase efficiency, most improvements have been the result of external factors such as debt restructuring and government-arranged buy-outs and mergers. This strategy offers short-term rewards, but could be a disaster in the long term. Real reform of China's state sector requires financial reforms that bite (even more urgent with WTO entry), serious moves toward a social security system for displaced workers, and more outright priva-tization of state firms to give non-state shareholders real power on their boards.
Topic:
Economics, Government, and Industrial Policy
Political Geography:
China

588. Whither Europe?

Author:
Barry Eichengreen
Publication Date:
05-2003
Content Type:
Working Paper
Institution:
Institute of European Studies
Abstract:
Where I live, on the West Coast of the United States, and teach, at the University of California, Europe seems far away. Geographically we are closer to Latin America and Asia. Ethnically, Californians of Hispanic and Asian-American descent are increasingly numerous. Within 20 years, residents of European origin will be a minority; already they are a minority of the undergraduates enrolling at Berkeley. Economically as well, we look to Asia. It is in California where the largest number of container ships arriving from Asia are unloaded, and it is across the Pacific, and in China in particular, that most of those containers originate.
Topic:
Economics and Political Economy
Political Geography:
United States, China, Europe, Asia, California, and Latin America

589. Revaluing the renminbi: a case of 'déjà vu all over again'?

Author:
Mark P Thirlwell
Publication Date:
11-2003
Content Type:
Policy Brief
Institution:
Lowy Institute for International Policy
Abstract:
There are strong parallels between today's US-China tensions over trade and US-Japan economic relations in the 1980s.
Topic:
Economics
Political Geography:
United States, Japan, China, Israel, East Asia, and Asia

590. "Animal Spirits" and Policy Stimulants

Author:
John H. Makin
Publication Date:
12-2003
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
The policy stimulants administered in very large doses to the U.S. economy at midyear are wearing off fast. China's boom, while not ending, is cooling. The result of those two facts will be U.S. growth of 3 percent or less in the final quarter of this year and the first quarter of next before tax rebates kick in to provide a lone quarter of 4 percent growth next spring. Then it will be back to 3 percent, plus or minus half a percent, in the second half of 2004 as the boost from tax cuts fades, provided stock markets hold up.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
United States and China