The FT article “China Covid outbreak linked to Delta variant weighs on economy” (Hale, White, Shepherd) makes some grim reading, with several other articles having a similar take, citing Goldman Sachs. I was gripped by a sense of déjà vu. In my first lecture in January 2020 I cited the uncertainties for the trade/macro outlook given events in Wuhan. From FT:
Category Archives: China
US-China Economic Relations on Talking Trade
I had the pleasure of speaking with UW’s Ian Coxhead and Sandi Siegel, President of MITA and of ME Dey, at Talking Trade last week about trade, direct investment and competition in technology production.
Is Economic Policy Uncertainty Really This Low in Hong Kong?
The Economic Policy Uncertainty index, calculated using the Baker, Bloom and Davis methodology:
Review of Subacchi, “The People’s Money: How China Is Building a Global Currency”
For those interested in the RMB, here’s my book review:
Hendrix and Noland, “Assessing Potential Economic Policy Responses to Genocide in Xinjiang”
From Cullen Hendrix and Marcus Noland at Peterson Institute for International Economics, “Assessing Potential Economic Policy Responses to Genocide in Xinjiang” – Economic Policy Responses:
Trade Sanctions on Use of Forced Labor in China
From Reuters:
Guest Contribution: “How Tariffs Affect China’s Exports”
Today, we’re fortunate to have Willem Thorbecke, Senior Fellow at Japan’s Research Institute of Economy, Trade and Industry (RIETI) as a guest contributor. The views expressed represent those of the author himself, and do not necessarily represent those of RIETI, or any other institutions the author is affiliated with.
“Re-examining the Effects of Trading with China on Local Labor Markets: A Supply Chain Perspective”
From the paper by Zhi Wang, Shang-Jin Wei, Xinding Yu & Kunfu Zhu:
The United States imports intermediate inputs from China, helping downstream US firms to expand employment. Using a cross-regional reduced-form specification but differing from the existing literature, this paper (a) incorporates a supply chain perspective, (b) uses intermediate input imports rather than total imports in computing the downstream exposure, and (c) uses exporter-specific information to allocate imported inputs across US sectors. We find robust evidence that the total impact of trading with China is a positive boost to local employment and real wages. The most important factor is employment stimulation outside the manufacturing sector through the downstream channel. This overturns the received wisdom from the reduced-form literature and provides statistical support for a key mechanism hypothesized in general equilibrium spatial models.
Ungated version here. This is a slightly older paper (2018). A paper with related findings by Feenstra and Sasahara (2018) here, while ungated working paper version is here.
This is a reminder that import competition has direct impacts, but international trade allows firms access to lower cost inputs, and benefiting from comparative advantage. Separate from the question of net benefits is whether costs imposed on those negatively impacted outweigh those who gain, either in dollar or “util” terms.
The RMB’s Progress (in Internationalization)
The rapid ascent in CNY reserves was in 2018, with some resumption in 2020. From 2016 to 2019, Renminbi turnover rose from 4% to 4.3% (out of 200%).
Winning (per Trump Dictionary)! US-China Trade
Chad Bown, US-China Phase 1 Tracker:
No matter how you look at it – use data on China’s imports or US exports – through November, China purchased only slightly more than half of the US goods Trump pledged it would buy over all of 2020 under his Phase One deal.
