Below is an excerpt from the SIEPR policy brief published online.

"As the United States and China enter a new and contentious phase of their relationship, Stanford scholars are setting and expanding research agendas to analyze China’s economic development and its impact on the world. The newly launched Stanford Center on China’s Economy and Institutions (SCCEI, pronounced “sky”) was formed by the Stanford Institute for Economic Policy Research (SIEPR) and the Freeman Spogli Institute for International Studies (FSI) to support their work.

The goal of SCCEI and its affiliated faculty is to provide a dispassionate, fact-based architecture that can help policymakers, business leaders and the general public navigate the fraught relationship between the U.S. and China.

This policy brief outlines the scholarship already underway by some of SCCEI’s affiliates. It includes a range of research on the world’s most populous country: education and wage disparities; workforce transformation; emissions trading; China’s one-child policy; and the effect that racism against Chinese students in America has upon their views about authoritarian rule. As the center matures, research agendas will expand and focus on trade, global supply chains, technology, intellectual property rights, worker productivity, and a range of developing issues affecting the connection between Washington, D.C., and Beijing and the rest of the world."

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This paper's findings suggest that an arbitrary Chinese policy that greatly increases total suspended particulates (TSPs) air pollution is causing the 500 million residents of Northern China to lose more than 2.5 billion life years of life expectancy. The quasi-experimental empirical approach is based on China’s Huai River policy, which provided free winter heating via the provision of coal for boilers in cities north of the Huai River but denied heat to the south. Using a regression discontinuity design based on distance from the Huai River, we find that ambient concentrations of TSPs are about 184 μg/m3 [95% confidence interval (CI): 61, 307] or 55% higher in the north. Further, the results indicate that life expectancies are about 5.5 y (95% CI: 0.8, 10.2) lower in the north owing to an increased incidence of cardiorespiratory mortality. More generally, the analysis suggests that long-term exposure to an additional 100 μg/m3 of TSPs is associated with a reduction in life expectancy at birth of about 3.0 y (95% CI: 0.4, 5.6).

A recently developed small area estimation technique is used to geographically derive detailed estimates of consumption-based poverty and inequality in rural Shaanxi, China. These estimates may be helpful for targeting since there is wide variability in poverty rates within Shaanxi but low levels of inequality within most counties and townships. We also investigate whether including environmental variables in the equation used to predict consumption and poverty improves upon typical approaches that only use household survey and census data. Ignoring environmental variables appears likely to produce targeting errors.

Abstract: Using field survey data collected by the authors, this chapter first describes groundwater markets in northern China that have been developing rapidly in the past two decades. Groundwater markets in the area are informal, localized and mostly unregulated. There is little price discrimination, and institutional characteristics tend to be similar in both high- and low-income villages. The privatization of tubewells is one of the most important driving forces encouraging the development of groundwater markets. Increasing water and land scarcity are also major determinants. The chapter also explores the impacts of the emergence of the groundwater markets on agricultural production – including crop water use and crop yields – and farmer income in northern China. Results indicate farmers that buy water from groundwater markets use less water than those that have their own tubewells. However yields of water buyers are not negatively affected. This is probably because water buyers exert more efforts to improve water use efficiency. Results also show that other things held constant, the crop incomes of water buyers are not statistically different from those of well owners. The chapter also finds that groundwater markets in northern China are not monopolistic, supporting the notion that they offer poor rural households affordable access to irrigation water.

The lost decades for China in the 1950s, 1960s and 1970s look remarkably like the lost decades of Africa in the 1980s an 1990s.  Poor land rights, weak incentives, incomplete markets and inappropriate investment portfolios.  However, China burst out of its stagnation in the 1980s and has enjoyed three decades of remarkable growth.  In this paper we examine the record of the development of China's food economy and identify the policies that helped generate the growth and transformation of agriculture.  Incentives, markets and strategic investments by the state were key.  Equally important, however, is what the state did not do.  Policies that worked and those that failed (or those that were ignored) are addressed.  Most importantly, we try to take an objective, nuanced look at the lessons that might be learned and those that are not relevant for Africa.  Many parts of Africa have experienced positive growth during the past decade.  We examine if there are any lessons that might be helpful in turning ten positive years into several more decades of transformation.

New research on the political economy of policy-induced distortions to incentives for optimal resource use in agriculture and insights from the study of the dramatic reforms in former state-controlled economy has led to enhanced insights on the role of governance structures on policy making in agricultural and natural resources. This paper reviews these research developments and key new insights.