Search results

© 2019, Emerald Publishing Limited. Purpose: Consumption volatility is a key source of economic growth volatility; thus, it is an important factor in designing macroeconomic policy. The purpose of this paper is to investigate the factors that determine household consumption volatility, using urban household survey (UHS) data over the period 2002–2009 in 18 provinces in China. Design/methodology/approach: Both a traditional variance decomposition method and an advanced variance decomposition method are used. Findings: The traditional variance decomposition method suggests that heterogeneity of consumption goods is the key to analyze consumption volatility in China. Consumption of transportation makes the highest aggregate contribution and per-unit volatility in consumption volatility, whereas consumption of food makes the second highest aggregate contribution and the lowest per-unit volatility. Further investigation with the advanced variance decomposition method, which allows the authors to capture intertemporal dynamics and cross-household differences simultaneously, finds that the main factor determining the consumption volatility in China is intertemporal dynamics, rather than cross-household differences. Research limitations/implications: Future research could fruitfully explore four issues. First, consumption upgrading has increased the volatility of China's household consumption. How much will this affect economic growth in China under its "new normal" conditions, and how should the Chinese government respond? Second, differences between UHS data and aggregate data in the calculations of consumption risk sharing need to be investigated. Third, it is important to investigate the channels through which the Chinese government can enhance its ability to spread consumption risks and thus reduce consumer consumption volatility. Finally, further study could extend the current 18 provinces to a nation-wide sample and update the data beyond 2009 to estimate the impact of the global financial crisis. Practical implications: The results suggest that when policy makers design macroeconomic policies to smooth consumption volatility, they should consider heterogeneity in household consumption goods, regional disparity and intertemporal dynamics simultaneously. Well-managed volatility of Chinese household consumption can contribute to a stable economic growth in China and the world. Social implications: Well-managed volatility of Chinese household consumption can contribute to a stable economic growth in China and the world. Originality/value: This paper fills this gap by using China's UHS data to assess consumption volatility from the perspectives of heterogeneity in household consumption goods, cross-household differences and intertemporal dynamics. We make three contributions to the literature. The first contribution of this paper consists of demonstrating the contributions of heterogeneity in household consumption goods to consumption volatility. The second contribution consists of using the advanced variance decomposition method proposed by Crucini and Telmer (2012). This decomposition methodology allows the authors to examine whether household consumption volatility is due to cross-household differences or intertemporal dynamics. The third contribution is that this paper takes Chinese residents' consumption fluctuations as the starting point to analyze the impact of consumption fluctuations on the future trend of China's economy.

© 2018 Institute of World Economics and Politics, Chinese Academy of Social Sciences Previous studies have investigated whether Chinese exports have crowded out those from other countries. However, what has yet to be considered is the evidence based on different quality varieties. Using the most detailed Harmonized System 9-digit product-level data, the present paper provides evidence of crowding-out and crowded-out effects across different product quality segments and across manufacturing sectors by quality segments. The empirical evidence presented in this paper shows that the crowding-out effects of Chinese exports have been greatest at the lower end of the quality spectrum but less significant at the higher quality spectrum. Moreover, since 2007, China's own exports of lower quality manufactured goods have been increasingly crowded out. The key policy implication is that China's export path is in line with that taken by other Asian economies in previous decades; the crowded-out effect could achieve win–win outcomes for countries involved; and lower income countries would do well to be open to receive those relocated low value-added industries from China. However, the relocation policy in China is best implemented gradually as climbing up the product quality ladder takes time.

© 2018, © 2018 Informa UK Limited, trading as Taylor & Francis Group. Chinese investment in Australian infrastructure assets can bring economic benefits for both countries. However, it can also create domestic political challenges. This is because Australian public support for foreign investment in infrastructure is limited. In order to better inform public policy and firm decision-making in both China and Australia, this paper undertakes a choice modelling analysis of original survey data to determine the drivers of local public preferences. The Australian public is found to be more concerned by the share of foreign ownership an investment will bring rather than the fact it is from China. Accounting for these preferences, such as through the recruitment of local partner companies, will facilitate Chinese investment in Australian infrastructure, and potentially, greater bilateral engagement on the Belt and Road Initiative. The Australian case might also offer wider lessons for Chinese investment in infrastructure assets abroad.