Pub Date : 2022-09-02DOI: 10.1080/17538963.2022.2117185
D. Dollar
Abstract The tech war is having an effect on U.S.-China trade. For high-tech products like telecommunications equipment, semiconductors, and computer accessories, there has been a sharp drop in trade in both directions. This is not simply a drop in demand in the U.S. for these items because imports of them from other partners has soared. Vietnam’s exports to the U.S. jumped in the sensitive categories, and overall Vietnamese exports to the U.S. more than doubled between 2018 and 2021. Despite these effects from the tech war, however, overall U.S.-China trade has held up surprisingly well. The year 2022 will almost certainly see a new historical high for trade in both directions. This resilience of trade, in the face of tariffs and tech sanctions, indicates that there is a strong economic foundation for the two-way relationship. For both China and the U.S., it is hard to replace the other one as a trade partner. It is possible for production of a few specific items to shift from China to Vietnam, but there is no way to replace China’s huge manufacturing output. From China’s point of view, the technologically advanced countries are all allies of the U.S., and it is not easy for China to turn to Europe for the technology it cannot get from America. Because U.S.-China trade is based on strong fundamentals, it will probably continue at a high level, in an uneasy equilibrium in which certain trade and investment is off-limits, while other business goes on.
{"title":"U.S.-China trade relations in an era of great power competition","authors":"D. Dollar","doi":"10.1080/17538963.2022.2117185","DOIUrl":"https://doi.org/10.1080/17538963.2022.2117185","url":null,"abstract":"Abstract The tech war is having an effect on U.S.-China trade. For high-tech products like telecommunications equipment, semiconductors, and computer accessories, there has been a sharp drop in trade in both directions. This is not simply a drop in demand in the U.S. for these items because imports of them from other partners has soared. Vietnam’s exports to the U.S. jumped in the sensitive categories, and overall Vietnamese exports to the U.S. more than doubled between 2018 and 2021. Despite these effects from the tech war, however, overall U.S.-China trade has held up surprisingly well. The year 2022 will almost certainly see a new historical high for trade in both directions. This resilience of trade, in the face of tariffs and tech sanctions, indicates that there is a strong economic foundation for the two-way relationship. For both China and the U.S., it is hard to replace the other one as a trade partner. It is possible for production of a few specific items to shift from China to Vietnam, but there is no way to replace China’s huge manufacturing output. From China’s point of view, the technologically advanced countries are all allies of the U.S., and it is not easy for China to turn to Europe for the technology it cannot get from America. Because U.S.-China trade is based on strong fundamentals, it will probably continue at a high level, in an uneasy equilibrium in which certain trade and investment is off-limits, while other business goes on.","PeriodicalId":45279,"journal":{"name":"China Economic Journal","volume":null,"pages":null},"PeriodicalIF":3.3,"publicationDate":"2022-09-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42454762","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-02DOI: 10.1080/17538963.2022.2117167
Yu Yongding
Abstract America’s current-account deficit has grown significantly since 2020, reaching 3.6% of GDP last year – its highest level since 2008. At the same time, its net foreign debt reached a staggering $18 trillion, or 78% of GDP. And fast-rising inflation has prompted the US Federal Reserve to begin raising interest rates and reducing its holdings of Treasury securities – moves that are likely to impede growth and increase the government’s borrowing cost. Will America’s “external sustainability” be at risk again? To answer that question, we must consider the four variables on which external sustainability depends: the gap between private saving and private investment, the size of the budget deficit, investment-income levels, and the rate of GDP growth. Geopolitics might compound the challenges ahead. The US has avoided a balance-of- payments and dollar crisis in the past largely because Asian central banks and oil- exporting countries have tirelessly purchased US government bonds and Treasury bills. But amid rising geopolitical tensions, these buyers might decide – or be forced – to rethink their purchases. It is against this backdrop that the Fed is pursuing rather aggressive interest-rate hikes and quantitative tightening. But increased demand for foreign capital to finance the trade deficit, together with greater reluctance by foreign investors to purchase US government bonds and Treasuries, might put America in a quandary. It is likely that America’s external balance will deteriorate significantly, unless US GDP growth slows significantly.
{"title":"The reemergence of the issue of US ‘external sustainability’ and what should be China’s responses","authors":"Yu Yongding","doi":"10.1080/17538963.2022.2117167","DOIUrl":"https://doi.org/10.1080/17538963.2022.2117167","url":null,"abstract":"Abstract America’s current-account deficit has grown significantly since 2020, reaching 3.6% of GDP last year – its highest level since 2008. At the same time, its net foreign debt reached a staggering $18 trillion, or 78% of GDP. And fast-rising inflation has prompted the US Federal Reserve to begin raising interest rates and reducing its holdings of Treasury securities – moves that are likely to impede growth and increase the government’s borrowing cost. Will America’s “external sustainability” be at risk again? To answer that question, we must consider the four variables on which external sustainability depends: the gap between private saving and private investment, the size of the budget deficit, investment-income levels, and the rate of GDP growth. Geopolitics might compound the challenges ahead. The US has avoided a balance-of- payments and dollar crisis in the past largely because Asian central banks and oil- exporting countries have tirelessly purchased US government bonds and Treasury bills. But amid rising geopolitical tensions, these buyers might decide – or be forced – to rethink their purchases. It is against this backdrop that the Fed is pursuing rather aggressive interest-rate hikes and quantitative tightening. But increased demand for foreign capital to finance the trade deficit, together with greater reluctance by foreign investors to purchase US government bonds and Treasuries, might put America in a quandary. It is likely that America’s external balance will deteriorate significantly, unless US GDP growth slows significantly.","PeriodicalId":45279,"journal":{"name":"China Economic Journal","volume":null,"pages":null},"PeriodicalIF":3.3,"publicationDate":"2022-09-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43911582","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-02DOI: 10.1080/17538963.2022.2118458
Yiping Huang
How will the unexpected Russia–Ukraine conflict started in late February 2022 redefine China’s economic relations with the rest of the world? This is the central question of the current special issue. Although China is not directly involved, the conflict could change the way the world economy operates. China’s economic relations with the rest of the world, especially with the United States and its allies, started to change years earlier. But the Russia–Ukraine conflict could accelerate such change. When China decided to start economic reform at the end of 1978, it was virtually an autarkic economy. Exports, which accounted for less than 5% of GDP, were mainly resource and agricultural products, and were organized by twelve state-owned export corporations in order to exchange for imports of machinery and equipment products. Inward or outward international investment was literally non-existent. During the following decades, China quickl emerged as one of the most successful economic stories worldwide. Between 1978 and 2008, China’s real GDP growth averaged 9.8%. Its GDP per capita rose from less than US$200 to above US$3,000 during the same period. In 2010, China surpassed Japan to become the world second largest economy. In retrospect, the external sector was a key driver of economic development during that time. In the late 1980s, the Chinese government formulated ‘the great external economic circulation strategy’, leveraging the external capital, inputs, technology and market. And in 2001, China joined the World Trade Organization. As a result, exports rose to 35% of GDP in 2006 and, in the 1990s and the 2000s, China was regularly the largest recipient country of foreign direct investment. Apparently, the reform and open-door policies were the most important factors contributing to China’s economic success during the past decades. The reform policy not only re-introduced incentives for workers and entrepreneurs to work hard but also adopted the market mechanism to allocate resources. And the open-door policy enabled China to participate in the international division of labor as well as taking advantages of international capital and technology. The favorable external environment also played irreplaceable roles in China’s economic development and opening up. These came in two dimensions: one was starting of economic globalization from 1971 and the other was warming of Sino-US relations
{"title":"China’s changing economic relations with the world: introduction","authors":"Yiping Huang","doi":"10.1080/17538963.2022.2118458","DOIUrl":"https://doi.org/10.1080/17538963.2022.2118458","url":null,"abstract":"How will the unexpected Russia–Ukraine conflict started in late February 2022 redefine China’s economic relations with the rest of the world? This is the central question of the current special issue. Although China is not directly involved, the conflict could change the way the world economy operates. China’s economic relations with the rest of the world, especially with the United States and its allies, started to change years earlier. But the Russia–Ukraine conflict could accelerate such change. When China decided to start economic reform at the end of 1978, it was virtually an autarkic economy. Exports, which accounted for less than 5% of GDP, were mainly resource and agricultural products, and were organized by twelve state-owned export corporations in order to exchange for imports of machinery and equipment products. Inward or outward international investment was literally non-existent. During the following decades, China quickl emerged as one of the most successful economic stories worldwide. Between 1978 and 2008, China’s real GDP growth averaged 9.8%. Its GDP per capita rose from less than US$200 to above US$3,000 during the same period. In 2010, China surpassed Japan to become the world second largest economy. In retrospect, the external sector was a key driver of economic development during that time. In the late 1980s, the Chinese government formulated ‘the great external economic circulation strategy’, leveraging the external capital, inputs, technology and market. And in 2001, China joined the World Trade Organization. As a result, exports rose to 35% of GDP in 2006 and, in the 1990s and the 2000s, China was regularly the largest recipient country of foreign direct investment. Apparently, the reform and open-door policies were the most important factors contributing to China’s economic success during the past decades. The reform policy not only re-introduced incentives for workers and entrepreneurs to work hard but also adopted the market mechanism to allocate resources. And the open-door policy enabled China to participate in the international division of labor as well as taking advantages of international capital and technology. The favorable external environment also played irreplaceable roles in China’s economic development and opening up. These came in two dimensions: one was starting of economic globalization from 1971 and the other was warming of Sino-US relations","PeriodicalId":45279,"journal":{"name":"China Economic Journal","volume":null,"pages":null},"PeriodicalIF":3.3,"publicationDate":"2022-09-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49365678","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-08-30DOI: 10.1080/17538963.2022.2118460
Qiyuan Xu, Aizong Xiong
ABSTRACT After the outbreak of the conflict between Russia and Ukraine, the United States and Europe have taken financial sanctions against Russia, which have had an important impact. The frequent use of financial sanctions has exacerbated the distrust of the dollar system in emerging markets and developing countries, and shaken the logic of the dollar and the Society for Worldwide Interbank Financial Telecommunications (SWIFT) system as public goods of the international monetary system. However, the position of the US dollar and SWIFT is still hard to change. This does not mean that the international monetary system will remain the same forever. As the willingness to hold foreign exchange reserves declines, emerging markets and developing countries will either increase their tolerance of exchange rate volatility or implement more capital account regulation. Therefore, in the trend of de-globalization in the future, the international monetary system will turn out to be more volatile.
{"title":"The impact of financial sanctions on the international monetary system","authors":"Qiyuan Xu, Aizong Xiong","doi":"10.1080/17538963.2022.2118460","DOIUrl":"https://doi.org/10.1080/17538963.2022.2118460","url":null,"abstract":"ABSTRACT After the outbreak of the conflict between Russia and Ukraine, the United States and Europe have taken financial sanctions against Russia, which have had an important impact. The frequent use of financial sanctions has exacerbated the distrust of the dollar system in emerging markets and developing countries, and shaken the logic of the dollar and the Society for Worldwide Interbank Financial Telecommunications (SWIFT) system as public goods of the international monetary system. However, the position of the US dollar and SWIFT is still hard to change. This does not mean that the international monetary system will remain the same forever. As the willingness to hold foreign exchange reserves declines, emerging markets and developing countries will either increase their tolerance of exchange rate volatility or implement more capital account regulation. Therefore, in the trend of de-globalization in the future, the international monetary system will turn out to be more volatile.","PeriodicalId":45279,"journal":{"name":"China Economic Journal","volume":null,"pages":null},"PeriodicalIF":3.3,"publicationDate":"2022-08-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47411855","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-08-29DOI: 10.1080/17538963.2022.2117180
Jane Golley, Vishesh Agarwal, J. Laurenceson, Tu Qiu
ABSTRACT This paper quantifies the effects of shocks in bilateral political relations on Australia’s merchandise goods exports to China between 2001 and 2020. Using a vector autoregression framework, our estimates suggest that short-term fluctuations in political relations have no long-run effects on Australia’s aggregate export growth to China over this period, nor in any of three sub-periods analysed. A disaggregated analysis of 19 HS2 sectors reveals heterogenous short-run effects across sectors and time periods, with numerous sectors indicating the seemingly perverse finding that an increase in political cooperation/conflict is associated with a decrease/increase in export growth, with a lag of one to four months. We propose two hypotheses that are consistent with these findings, ‘doubling down’ and ‘dropping the ball’, contributing new understanding to the political relations-trade nexus in the context of a bilateral relationship that will likely be characterised by both cooperation and conflict in the decades ahead.
{"title":"For better or worse, in sickness and in health: Australia-China political relations and trade","authors":"Jane Golley, Vishesh Agarwal, J. Laurenceson, Tu Qiu","doi":"10.1080/17538963.2022.2117180","DOIUrl":"https://doi.org/10.1080/17538963.2022.2117180","url":null,"abstract":"ABSTRACT This paper quantifies the effects of shocks in bilateral political relations on Australia’s merchandise goods exports to China between 2001 and 2020. Using a vector autoregression framework, our estimates suggest that short-term fluctuations in political relations have no long-run effects on Australia’s aggregate export growth to China over this period, nor in any of three sub-periods analysed. A disaggregated analysis of 19 HS2 sectors reveals heterogenous short-run effects across sectors and time periods, with numerous sectors indicating the seemingly perverse finding that an increase in political cooperation/conflict is associated with a decrease/increase in export growth, with a lag of one to four months. We propose two hypotheses that are consistent with these findings, ‘doubling down’ and ‘dropping the ball’, contributing new understanding to the political relations-trade nexus in the context of a bilateral relationship that will likely be characterised by both cooperation and conflict in the decades ahead.","PeriodicalId":45279,"journal":{"name":"China Economic Journal","volume":null,"pages":null},"PeriodicalIF":3.3,"publicationDate":"2022-08-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45281912","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-06-27DOI: 10.1080/17538963.2022.2094585
Qingyuan Xue, N. Witvorapong
ABSTRACT Using three waves of the Chinese Longitudinal Healthy Longevity Survey in 2005, 2008–2009, and 2011–2012, this study investigates the effect of health insurance on health care utilization and health behaviors of older people in China. Enrollment in a health insurance program represents the main explanatory variable, while total health expenditures (THE), out-of-pocket expenditures (OOP), smoking, drinking and physical inactivity represent outcomes of interest. This study finds that health insurance is associated with an increase in THE and a reduction in OOP, suggesting that insurance enhances access to health services while reducing financial burden. The effects of insurance on health behaviors are complex, associated with increased probabilities of smoking and drinking and a decreased probability of physical inactivity. Results vary across age, education and residential location groups and across time, due to the fact that the health insurance system changed significantly during the study period.
{"title":"Impacts of health insurance on health care utilization and health behaviors among older people in China","authors":"Qingyuan Xue, N. Witvorapong","doi":"10.1080/17538963.2022.2094585","DOIUrl":"https://doi.org/10.1080/17538963.2022.2094585","url":null,"abstract":"ABSTRACT Using three waves of the Chinese Longitudinal Healthy Longevity Survey in 2005, 2008–2009, and 2011–2012, this study investigates the effect of health insurance on health care utilization and health behaviors of older people in China. Enrollment in a health insurance program represents the main explanatory variable, while total health expenditures (THE), out-of-pocket expenditures (OOP), smoking, drinking and physical inactivity represent outcomes of interest. This study finds that health insurance is associated with an increase in THE and a reduction in OOP, suggesting that insurance enhances access to health services while reducing financial burden. The effects of insurance on health behaviors are complex, associated with increased probabilities of smoking and drinking and a decreased probability of physical inactivity. Results vary across age, education and residential location groups and across time, due to the fact that the health insurance system changed significantly during the study period.","PeriodicalId":45279,"journal":{"name":"China Economic Journal","volume":null,"pages":null},"PeriodicalIF":3.3,"publicationDate":"2022-06-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49106078","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-05-21DOI: 10.1080/17538963.2022.2079194
Mortaza Ojaghlou, Erginbay Uğurlu
ABSTRACT Because of the outbreak of pandemic COVID-19, the economy and financial markets had a sharp decline. Also, based on the lockdown, we saw that amount of production and trade had decreased. This situation continues, and the effect on trade is still an important concern. In this paper, we investigate whether COVID-19 has an effect on trade by means of the real exchange rate in China-EU27 and China-USA. By using J-curve concept, for each trade partner, we use three models, which are ARDL, NARDL, and Multiplier NARDL, using three different data periods considering COVID-19. The results show that inverted J-Curve is proved with the long-run J-Curve effects for both partners, while COVID-19 makes factors favor J-Curve. Although J-Curve was inverted before the pandemic of COVID-9, during the COVID-19, we recognize the effect of J-Curve, which shows that the effect of real exchange rate on trade of China-EU27 and China-USA seems to favor China.
{"title":"Is there a J-curve under COVID-19 effects","authors":"Mortaza Ojaghlou, Erginbay Uğurlu","doi":"10.1080/17538963.2022.2079194","DOIUrl":"https://doi.org/10.1080/17538963.2022.2079194","url":null,"abstract":"ABSTRACT Because of the outbreak of pandemic COVID-19, the economy and financial markets had a sharp decline. Also, based on the lockdown, we saw that amount of production and trade had decreased. This situation continues, and the effect on trade is still an important concern. In this paper, we investigate whether COVID-19 has an effect on trade by means of the real exchange rate in China-EU27 and China-USA. By using J-curve concept, for each trade partner, we use three models, which are ARDL, NARDL, and Multiplier NARDL, using three different data periods considering COVID-19. The results show that inverted J-Curve is proved with the long-run J-Curve effects for both partners, while COVID-19 makes factors favor J-Curve. Although J-Curve was inverted before the pandemic of COVID-9, during the COVID-19, we recognize the effect of J-Curve, which shows that the effect of real exchange rate on trade of China-EU27 and China-USA seems to favor China.","PeriodicalId":45279,"journal":{"name":"China Economic Journal","volume":null,"pages":null},"PeriodicalIF":3.3,"publicationDate":"2022-05-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41766147","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-05-04DOI: 10.1080/17538963.2022.2068833
Yan Shen
ABSTRACT This paper aims to study China’s data governance policy in the platform economy through reviewing its evolvement, its current challenges, and then provide possible policy recommendations. We review China’s data governance policy to show that its focus has switched from security only, to ensure security but at the same time to facility data market so as to encourage the growth of digital economy. We then discuss the governance of data from three perspectives: as a factor of production, algorithm governance, and personal information protection and data security. We recommend the establishment of data governance committee to coordinate data governance issues, including data licensing and algorithm auditing processes.
{"title":"Data governance in China’s platform economy","authors":"Yan Shen","doi":"10.1080/17538963.2022.2068833","DOIUrl":"https://doi.org/10.1080/17538963.2022.2068833","url":null,"abstract":"ABSTRACT This paper aims to study China’s data governance policy in the platform economy through reviewing its evolvement, its current challenges, and then provide possible policy recommendations. We review China’s data governance policy to show that its focus has switched from security only, to ensure security but at the same time to facility data market so as to encourage the growth of digital economy. We then discuss the governance of data from three perspectives: as a factor of production, algorithm governance, and personal information protection and data security. We recommend the establishment of data governance committee to coordinate data governance issues, including data licensing and algorithm auditing processes.","PeriodicalId":45279,"journal":{"name":"China Economic Journal","volume":null,"pages":null},"PeriodicalIF":3.3,"publicationDate":"2022-05-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46072084","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-05-04DOI: 10.1080/17538963.2022.2070941
Yan Shen
The platform economy helps to improve the efficiency of resource allocation and has become a new driving force of China’s economic growth. However, as it has a natural tendency of getting more concentrated over time, deeply reconstructing industry structure, and inducing tremendous changes toward social life, platform anti-monopoly starts to become a significant issue of social concern. In particular, some of the practices in the platforms are against consumers’ interests, such as distorting search ranking for profit, using big data to discriminate consumers, and breaching personal privacy. In December 2020, China’s Central Economic Work Conference listed ‘strengthening antimonopoly and preventing disorderly capital expansion’ as one of the eight economic priorities for 2021, marking 2021 as the first year of strong anti-monopoly regulation in China. In January 2021, the People’s Bank of China released the ‘Regulations on Non-Bank Payment Institutions (Draft for Public Comments)’, the most notable of which are Article 55 ‘early warning measures for market dominance’, Article 56 ‘Identification of market dominant position’ and Article 57 ‘market dominance regulatory measures’. In February 2021, the General Administration of Market Regulation of China (GAMR) published the ‘Antimonopoly Guideline on the Platform Economy (Draft for Public Comments)’, which provides the criteria for regulatory authorities to prevent, identify, and correct monopolistic practices like refusal to deal, restrict trading and price discrimination. The most notable of the strong regulatory actions in 2021 were the antitrust penalties against Alibaba Group, one of China’s largest e-commerce platforms, and Meituan, an e-commerce platform that focuses on fast-food delivery and other daily life services. In April 2021, Alibaba was penalized by the State Administration of Market Supervision and Administration for having committed ‘restricting merchants to choose one between two competing platforms’ conduct, with a fine of 4% of its 2019 sales of RMB 457.512 billion in China, totaling RMB 18.228 billion. In October 2021, Meituan was penalized for abusing its dominant position in the market for online food and beverage take-out platform services within China. Meituan was required to refund merchants on the platform of 1.289 billion RMB deposits, and to pay a fine of 3% of its 2020 sales of 114.748 billion RMB, totaling 3.442 billion Yuan.
{"title":"Introduction to the special issue on platform economic in China","authors":"Yan Shen","doi":"10.1080/17538963.2022.2070941","DOIUrl":"https://doi.org/10.1080/17538963.2022.2070941","url":null,"abstract":"The platform economy helps to improve the efficiency of resource allocation and has become a new driving force of China’s economic growth. However, as it has a natural tendency of getting more concentrated over time, deeply reconstructing industry structure, and inducing tremendous changes toward social life, platform anti-monopoly starts to become a significant issue of social concern. In particular, some of the practices in the platforms are against consumers’ interests, such as distorting search ranking for profit, using big data to discriminate consumers, and breaching personal privacy. In December 2020, China’s Central Economic Work Conference listed ‘strengthening antimonopoly and preventing disorderly capital expansion’ as one of the eight economic priorities for 2021, marking 2021 as the first year of strong anti-monopoly regulation in China. In January 2021, the People’s Bank of China released the ‘Regulations on Non-Bank Payment Institutions (Draft for Public Comments)’, the most notable of which are Article 55 ‘early warning measures for market dominance’, Article 56 ‘Identification of market dominant position’ and Article 57 ‘market dominance regulatory measures’. In February 2021, the General Administration of Market Regulation of China (GAMR) published the ‘Antimonopoly Guideline on the Platform Economy (Draft for Public Comments)’, which provides the criteria for regulatory authorities to prevent, identify, and correct monopolistic practices like refusal to deal, restrict trading and price discrimination. The most notable of the strong regulatory actions in 2021 were the antitrust penalties against Alibaba Group, one of China’s largest e-commerce platforms, and Meituan, an e-commerce platform that focuses on fast-food delivery and other daily life services. In April 2021, Alibaba was penalized by the State Administration of Market Supervision and Administration for having committed ‘restricting merchants to choose one between two competing platforms’ conduct, with a fine of 4% of its 2019 sales of RMB 457.512 billion in China, totaling RMB 18.228 billion. In October 2021, Meituan was penalized for abusing its dominant position in the market for online food and beverage take-out platform services within China. Meituan was required to refund merchants on the platform of 1.289 billion RMB deposits, and to pay a fine of 3% of its 2020 sales of 114.748 billion RMB, totaling 3.442 billion Yuan.","PeriodicalId":45279,"journal":{"name":"China Economic Journal","volume":null,"pages":null},"PeriodicalIF":3.3,"publicationDate":"2022-05-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47170679","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-05-04DOI: 10.1080/17538963.2022.2067687
Yiping Huang
ABSTRACT Within two decades, China built a very large platform economy. From the beginning of 2021, however, the Chinese government started to implement a set of new policies, popularly known as ‘strong regulations’, in order to correct improper platform behavior and improve market efficiency. These policies caused some negative effects on short-term momentum of the platform economy, including lay-offs of employees, decline of investment, and shrinkage of market valuation. This paper attempts to address the following questions: why did the authorities initiate this new policy? what are its net impacts on the platform economy? and how can the regulators do better? While acknowledging the urgent need for proper regulations for China’s platform economy, this paper argues that the authorities should find a better balance between regulation and development, with innovative thinking in dealing with issues such exclusive agreement, differential pricing and monopoly.
{"title":"‘Strong regulations’ of China’s platform economy: a preliminary assessment","authors":"Yiping Huang","doi":"10.1080/17538963.2022.2067687","DOIUrl":"https://doi.org/10.1080/17538963.2022.2067687","url":null,"abstract":"ABSTRACT Within two decades, China built a very large platform economy. From the beginning of 2021, however, the Chinese government started to implement a set of new policies, popularly known as ‘strong regulations’, in order to correct improper platform behavior and improve market efficiency. These policies caused some negative effects on short-term momentum of the platform economy, including lay-offs of employees, decline of investment, and shrinkage of market valuation. This paper attempts to address the following questions: why did the authorities initiate this new policy? what are its net impacts on the platform economy? and how can the regulators do better? While acknowledging the urgent need for proper regulations for China’s platform economy, this paper argues that the authorities should find a better balance between regulation and development, with innovative thinking in dealing with issues such exclusive agreement, differential pricing and monopoly.","PeriodicalId":45279,"journal":{"name":"China Economic Journal","volume":null,"pages":null},"PeriodicalIF":3.3,"publicationDate":"2022-05-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44554136","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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