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Sunday Papers

The Sunday Paper – China’s 40 Years Demographic Dividend and Labor Supply: The Quantity Myth

Everybody knows China’s been able to become the workshop of the world because it’s harvested a massive ‘Demographic Dividend’. Right? Xin Meng, from the Australian National University writing in a Discussion Paper for the IZA Institute of Labor Economics, after taking a closer look at the data, begs to differ. As the work shows, an […]

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Sunday Papers

The Sunday Paper – High-Speed Rail in Shrinking Cities: A Weapon for Downturn or a Catalyst for Change

It’s no secret, one of the most challenging areas for future development in China is the Northeast or ‘Dongbei’ area. This former industrial region is a poster-child for post-industrial decay, and the population movement out of the area in recent years is a matter of public record. What a great place then to study the […]

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Sunday Papers

The Sunday Paper – The Naval Balance Between the United States and the People’s Republic of China: A Note

First, a look at the bald comparison: Scaremongering reports have focused on the headline number of total vessels where China appears to knock the U.S. into a cocked hat. However, as the author of today’s analysis (not really an academic paper, mea culpa) Nader Elhefnawy from the Miami-Dade Community College explains, this is a misleading […]

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Sunday Papers

The Sunday Paper – Building Tall, Falling Short: An Empirical Assessment of Chinese Skyscrapers

China has built 1,575 buildings with a height in excess of 100-meters (hereafter ‘skyscrapers’) since the year 2000. This makes the country (by far) the leader in terms of construction, and therefore a great place to analyze the benefits of these types of development. Jin Wang (et al.) of the Hong Kong University of Science […]

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Sunday Papers

The Sunday Paper – Destructive Isolationism: Tallying the Cost of America’s Trade Policy and Suggestions for Repair and Reform

The author of today’s paper [Technically, more of a monograph] Dan Ciuriak has an axe, clearly. But he presents his argument well and given his many years at the coal-face of international economic policy making is worth taking the time to consider. He pulls no punches, “Starting with the Trump Administration and continuing under the […]

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Sunday Papers

The Sunday Paper – Social Organizations and Political Institutions: Why China and Europe Diverged

The literature on how, and why, China and Europe developed different social and political organizations is large; but, to summarize in the smallest of nutshells, the big theme is centralization in China and fragmentation in Europe. The paper today, from Joel Mokyr of the Northwestern University and Guido Tabellini of the Bocconi University, Milan follows […]

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Sunday Papers

The Sunday Paper – The Impact of High-Pressure Political Reforms on State-Owned Enterprises:  Evidence from China

State Owned Enterprises (SOEs) are not just a China phenomenon. According to the paper in focus this week, from researchers Sung C. Bae (Bowling Green State University), Taek Ho Kwon and Chenyang Liu (both from Chungnam National University), they account for up to 22% of global market capitalization* and 50% of total global GDP. [*Of […]

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Sunday Papers

The Sunday Paper – Financial Reporting and Disclosure Practices in China

Many will be familiar with points touched on in this paper. It may be the first though to take a comparative approach of norms in the U.S. and compare those habits, point by point, with what happens in China today*. [*Actually the China surveys were conducted in 2017 and 2020 but little will have changed […]

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Sunday Papers

The Sunday Paper – Can ChatGPT Forecast Stock Price Movements? Return Predictability and Large Language Models

A lot that’s questionable about the analysis in the paper highlighted today is visible in the chart below. Before I come back to that let me summarize work from Alejandro Lopez-Lira and Yue Hua Tang, both of the University of Florids, which is the subject of this week’s paper. Quantie-folk, for years, have employed models […]

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Sunday Papers

The Sunday Paper – Wealth Destruction on a Massive Scale for Investors? The Wedge between Security and Investor Returns in an Emerging Market

Why don’t I buy IPOs (and you shouldn’t either)? In the case of China stocks it’s because they’re nearly always overpriced and more often than not pre-IPO earnings have been manipulated to assist the over pricing. These are now established facts, not opinions. The paper today, from Ziyi Chen of the Hong Kong University of […]

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Sunday Papers

The Sunday Paper – Minority Shareholder Activism and Corporate Dividend Policy: Evidence from China

Minority Shareholder Activism (MSA) is all the rage. Fans claim it’s making a difference in Japan and no self-respecting institutional manager can make a pitch now without a few paragraphs devoted to the subject. The paper highlighted this week is therefore of interest in this context. In the work Han Han and Zhibin Wang of […]

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Thoughts

Changed Circumstances: China’s Improving Outlook

Just over a year ago JP Morgan issued research, they quickly claimed ‘in error’ (March 2022), that used the word ‘uninvestible*’ to describe Chinese internet stocks. [*I believe the description correct, but I don’t run a bank whose revenues, in part, are hostage to the favorable opinions of many in the sector.] Irrespective of the […]

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Sunday Papers

The Sunday Paper – Operating Loss Subsidies for High-Speed Railway in China: Game Relationships between the Government and China Railway Cooperation*

[*I think the authors mean China Railway Corporation which changed it’s name to simply China Rail in 2019 CRC reorganization. Perhaps I’m just being a little anorak-and-cheese-sandwich-tastic keen? The paper is a preprint though and not yet peer reviewed so I presume this ambiguity will be fixed in the final version.] China’s High Speed Rail […]

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Sunday Papers

The Sunday Paper – Clearing the Way to Renminbi Domination: CIPS, Antitrust, and Currency Competition

Felix Chang of the University of Cincinnati College of Law; Ohio State University (OSU) – Michael E. Moritz College of Law wants discussion on the greater international use of the Rmb to stop conflating CHIPS, SWIFT and CIPS. They are very different things and, to remind: CHIPS or the Clearing House Interbank Payments System is […]

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Sunday Papers

The Sunday Paper – Can Investor Sentiment Predict Value Premium in China?

“Holding value stocks for the long term when sentiment is low will give investors very high returns in the Chinese stock market.” I could stop the summary there. That’s all casual readers need to know. The authors of the paper from which this nugget is extracted, Zhaohui Jiang (et al.), drilled the Shenzhen and Shanghai […]

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Sunday Papers

The Sunday Paper – Assessing Public Support for (Non-)Peaceful Unification with Taiwan: Evidence from a Nationwide Survey in China

We know a lot about how Americans and Taiwanese view the Taiwan question, but until now there’s been no good data on how the women and men on-the-street in China view the same issue. Adam Liu of the Lee Kuan Yu School of Public Policy in Singapore and Xiaojun Li of the NYU Shanghai and […]

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Sunday Papers

The Sunday Paper – Industrial Robots and Firm Innovation: Big Data Evidence from China

Automation marginalizes low skilled workers and leads to societal inequality and attendant problems. This, or some version of it, has been a popular perception since the beginning of the Industrial Revolution. The notion persists because, like so much wrong-thinking, it kind-of sounds right and the discussion has recently been revived by a new generation looking […]

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Sunday Papers

The Sunday Paper – Pandemic State-building: Chinese Administrative Expansion in the Xi Jinping Era

The main point of the analysis highlighted this week from Yutian An and Taisu Zhang, a Phd candidate at Princeton and a Professor of law at Yale Law School, is summed up in the last line of their 60-page monograph: “For better or worse, China has now entered a new administrative paradigm” The researchers take […]

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Thoughts

Quintet of Catalysts: Developing Factors that Should Improve China-Stock-Investors’ Fortunes in 2023

Preamble China stock investors have had a rum time of it in recent years. Capricious government policies, on both the macro and micro level, have caused multi-year investor pain and fomented a climate of rolling uncertainty. This, in turn, has led to an exodus of liquidity and largely explains the more-than-decade-long cycle of depressed valuation […]

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Sunday Papers

The Sunday Paper – The Low-Risk Effect in Equities: Evidence from Industry Data in an Earlier Time

[The Low-Risk-Effect, also known as the Low-Volatility Anomaly has a brief Wiki entry Low-Volatility-Anomaly you may want to visit if the subject is new for you.] Trillions of dollars are invested based on a model we now know, with near certainty, is in large part incorrect. I’m referring to the Capital Asset Pricing Model (CAPM), […]