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An increasing number of countries have launched their central bank digital currencies (CBDC) in recent years, but the economic impacts of CBDC adoption are underexplored. To empirically assess how CBDC adoption influences regional economic integration, this paper investigates the Greater Bay Area, where China carried out one of its first digital renminbi pilot programs. The Greater Bay Area provides a good example because the growing acceptance of digital renminbi in the area can potentially mitigate transaction costs and risks due to the exchange rate volatility of the Chinese renminbi, Hong Kong dollar, and Macao pataca. CBDC adoption can lead to greater real and financial integrations by facilitating cross-border trade in goods and services. This paper evaluates deviations from uncovered interest rate parity, purchasing power parity, and real interest rate parity across Guangdong, Hong Kong, and Macao based on monthly interest rate and price data from January 2016 to December 2022. The time series have mean values near zero, which validate the parity conditions and indicate high degrees of financial, real, and economic integrations. The Markov regime-switching regression model identifies three regimes: (1) pre-Covid, (2) post-Covid, and (3) post-CBDC. The Covid-19 outbreak brought lower integration and stability, but the launch of the CBDC restored some of the pre-Covid integration and stability. Regimes 1 and 2 are persistent, and transitions from Regime 3 back to Regime 1 are probable. Hence, this study finds evidence that CBDC adoption improves regional economic integration in the short and long run. [ABSTRACT FROM AUTHOR]

The Chinese Government has promulgated the "Belt and Road Initiative" (BRI) to increase trade flows and integrate goods markets between China and BRI countries. The validity of purchasing power parity (PPP) implies well‐integrated goods markets, a precondition for further economic convergence, and the next stage of economic integration in factor, service, and financial markets. Our study aims to examine the validity of the PPP and the extent of goods market integration between China and selected BRI countries in Africa. Since the functional form of the cointegrating relationship may not be exact or linear, we adopt the nonparametric rank tests for analysis without prior knowledge and specification of the functional form. We also address the rank problems that occur in multivariate rank tests. Our empirical results provide strong evidence of an unrestricted PPP relationship with reasonably strong evidence of nonlinearity in the data. We also find that some African BRI countries have experienced goods market integration with China during the second‐half period only. This indicates that the introduction of the BRI in 2013 and China's active involvement in African economic development through BRI projects are leading to enhanced goods market integration between China and Africa. The results indicate favorable prospects of closer economic cooperation in the factor, service, and financial markets to build a free trade area or common markets with BRI countries in Africa. [ABSTRACT FROM AUTHOR]

The validity of purchasing power parity (PPP) between two economies implies goods markets of the two are well integrated. This is a pre-condition for further economic convergence. This study examines validity of the PPP between China and European countries. Since the functional form of the cointegrating relationship may not be exact or linear, we adopt the nonparametric rank tests for analysis, without prior specification of the functional form. We also address the rank problems that occur in multivariate rank tests. The results indicate strong support for nonlinear PPP relationships between China and European countries, especially during the second subsample period. This indicates China's rising economic power, particularly in the most recent decade. Although there have been disputes between China and Europe, these results suggest favorable prospects for closer economic cooperation between the two sides and the need for formulation of common policies to pursue an integrated market in the future. [ABSTRACT FROM AUTHOR]

This paper compiles a market-based price index by accounting for the impact of price regulation. We then use the parallel market exchange rate and market-based price index to test Purchasing Power Parity (PPP) over a more extended period (1952–2019) in China. We find weak evidence support PPP when official data are used. However, we fail to find evidence against PPP when the parallel market exchange rate and the market-based price index are used. Moreover, the half-life of the RMB real exchange rate is approximately one year, substantially lower than the consensus estimates of 3–5 years. [ABSTRACT FROM AUTHOR]

In this paper, we test the validity of the purchasing power parity (PPP) hypothesis between Türkiye and its trading partners - the European Union, China, and the US - for the period from January 2001 to January 2020. We test the stationarity of the real exchange rates for the validity of the PPP hypothesis by applying linear and nonlinear unit root tests. We also employ Fourier-based tests to account for the structural changes that occurred in the considered period. Test results indicate that shocks are temporary, and the PPP hypothesis is valid for Türkiye. [ABSTRACT FROM AUTHOR]

We revisit the purchasing power parity (PPP) between China and its five major trading partners, namely European Union, United States, Brazil, Japan, and Korea. Conventional unit root tests with structural breaks have mostly failed to validate the PPP. Apart from using CPI as the price index, the tradable‐goods price index is also used to test the PPP hypothesis (Balassa–Samuelson effect). Using the Fourier quantile unit root test for the potential structural breaks and non‐Gaussian distribution reveals strong evidence that the PPP holds between China and its five major trading partners. [ABSTRACT FROM AUTHOR]

This study analysed how local governments react to intergovernmental competition for private capital in the public goods market. Using microlevel data for public-private partnership (PPP) projects in China from 2012 to 2018, we found that the more private capital rival cities have attracted, the more likely local governments start to introduce PPP projects, especially those whose future returns are paid by governments. The results are robust to an instrumental variable estimation using the financing demand of rival cities. The effect of rival projects was found to be related to information disclosure, financing facilitation, and governors' responsibility. The results suggest that local governments tend to promise future obligations for payment to decrease advanced capital expenditures. This study also provides implications for political and economic research by shedding light on local competition in the progress of marketization. [ABSTRACT FROM AUTHOR]

The Pew Research Center survey reports an increasing unfavorable view of China worldwide. In the Soft Power 30 index, China fares at a rank of 27th, far behind its aim of global leadership. The world's leading economic power (in terms of purchasing power parity), a military power second only to the United States, a nation with a formidable global presence, a robust civilization and culture, however, still struggles to generate international affinity and credibility one might expect of the great middle kingdom. Acknowledging the benefits of soft power, China has continuously been engaged in the competitive politics of attraction, legitimacy, and credibility; however, Beijing's charm offensive still has limited appeal in the outside world. The popular assessments point toward China's authoritarian political model or poor state of civil liberties for the limited effectiveness of its soft power push. However, in this article we argue that besides the political and ideological factors limiting its soft power, China's absolute or relative soft power gains are majorly undercut because of its coercive diplomacy exercised with the unbridled pursuit of its core national interests and hyper-nationalism. The article provides an interpretive illustration of how China's disposition to rely on hard power instruments of carrot (inducement) and stick (threat, coercion, or intimidation) to get desired outcomes undermines the quest and effect of its soft power. [ABSTRACT FROM AUTHOR]

International comparisons of military spending are necessary for monitoring security risks, assessing defense capabilities, and planning defense budgets. Nevertheless, conventional comparisons do not allow for differences in defense sector input prices across countries. I use defense sector budget data to construct a database of military purchasing power parity (PPP) exchange rates for 59 countries. Real military spending in many countries, including Russia and China, is found to significantly exceed conventional estimates based on market exchange rates and GDP‐PPP exchange rates. Similarly, the US share of world military spending is substantially diminished. [ABSTRACT FROM AUTHOR]

Engel's law states that the proportion of food in total consumption expenditure is negatively associated with household income. Different from other studies with time series, this paper investigates the applicability of Engel's law in China, with a sample of cross‐sectional data in 2016 covering the 31 provincial regions of China. The empirical results support Engel's law, and, especially after the consideration of food prices, which is represented by regional food purchasing power parities, the negative impact of income on Engel's coefficient becomes more statistically significant. Meanwhile, Engel's coefficient is positively related to the food price. According to different types of income elasticity, food is divided into two groups: life necessities and life nonnecessities. Then, the inferior Engel's coefficient (IEC) and superior Engel's coefficient (SEC) are calculated with the expenditures of necessary and nonnecessary food, respectively, and a further study shows that the negative relationship between income and the SEC is much weaker than that between income and the IEC. Besides, Engel's coefficient is more strongly affected by the price of food necessities than by that of food nonecessities. [ABSTRACT FROM AUTHOR]

Due to the productivity shocks, there exist inherently systemic biases when using purchasing power parity as the equilibrium real exchange rate measure standard. In this paper, based on the characteristic of Chinese economic transformation, considering demographic and weakened Balassa–Samuelson effect, we reestimate the equilibrium level of the real exchange rate of RMB with the quarterly frequency data since 1994 and measure the misalignment of the RMB real exchange rate. The empirical results show that the improved convolutional neural network (CNN) model is a reasonable analytical framework for the RMB equilibrium real exchange rate, and in the sample period, the real exchange rate of RMB is robust, and demographic is an important variable affecting the RMB equilibrium exchange rate. The real exchange rate of RMB is closely related to China's economic development strategy. [ABSTRACT FROM AUTHOR]

In the age of risk and uncertainty, countries and companies are competing in a turbulent global environment. In this respect, they have to face a plethora of different challenges, such as the COVID-19 pandemic, disruptive technologies, demographic explosion, or climate change. A highly interconnected global economy imposes countries to compete not only for resources and markets but also to seek to hold a better place in this huge world economic network. The aim of the paper is to present the evolution of the world's largest economies in the period 2017-2020 by taking into account their gross domestic product. The methodology was based on a quantitative research method. Starting from a comprehensive literature review, it demonstrates that the hierarchy of the world's ten biggest economies by GDP was dominated by two countries, the United States of America and China. [ABSTRACT FROM AUTHOR]

The U.S.–China trade imbalance is commonly attributed to a Chinese policy of currency manipulation. However, empirical studies failed to reach consensus on the RMB misalignment. We argue that this is not a consequence of poor measurement but of theory. At the most abstract level the conventional principle of comparative cost advantage suggests real exchange rates will adjust so as to balance trade. Therefore, the persistence of trade imbalances tends to be interpreted as arising from currency manipulation facilitated by foreign exchange interventions. By way of contrast, the absolute cost theory explains trade imbalances as the outcome of free trade among nations that have unequal real costs. We argue that a disparity in real costs is the root cause of the U.S.–China trade imbalance. [ABSTRACT FROM AUTHOR]

The Chinese Government has proposed the 'Belt and Road Initiative' (BRI) in order to increase trade flows and economic prosperity among the Belt and Road (BR) member countries. The BRI may call for enlargement of economic cooperation as manifested by forming an economic or monetary union in the long term. It is therefore essential to choose a subset of member countries that fulfils the criteria for joining the potential economic or monetary union. The validity of purchasing power parity (PPP) implies well-integrated goods markets and is a pre-condition for further economic convergence. While the presence of transaction costs causes nonlinearities in the adjustment mechanism, our empirical study applies a three-regime threshold autoregressive (TAR) cointegration method for analysis. Our results support the existence of a PPP relationship with China for 12 sampled Asian member countries. Chinese policymakers can prioritize these BR countries for closer economic cooperation. Also, this TAR cointegration method can estimate the unobservable proportional transaction costs from the thresholds. The results reveal BR countries with large thresholds as targets to curtail transaction costs of trading in order to enhance the efficiency in international goods arbitrage and the degree of trade integration along the BR routes. [ABSTRACT FROM AUTHOR]

The recently proposed triangular purchasing power parity (PPP) hypothesis posits that, in a world dominated by the United States, China and Euroland, the exchange rate between the US dollar and the euro will be a function of the Euroland price level relative to China's price level. Contrary to conventional PPP, the US price level plays no role. We show that the theory underlying triangular PPP is flawed and that it is no more than a simple transformation of the conventional PPP relationship. Moreover, some of the empirical evidence presented in support of the triangular PPP actually refutes one of its central ideas. [ABSTRACT FROM AUTHOR]

Comparisons of real income within a country generally imply a deflation for relative price differences across regions. Housing services are the main source of spatial price difference because of the fixity of land supply. This paper argues that housing prices can synthetically reflect the general price level and proposes to estimate the subnational purchasing power parities (PPPs) based on the housing market as a distinctive spatial deflator to measure real income disparity. With a sample of urban and rural regions ranging from 1999 to 2015, house price relatives are estimated with the country-product-dummy (CPD) method; then, the subnational PPPs are calculated with the classic Gini-Eltetö-Köves-Szulc (GEKS) method. The results show that the subnational PPPs in the east regions are always high, while those in the middle and west regions are usually low for both urban and rural areas. The values of subnational PPPs for different regions change over time, while the trends are inconsistent between the east regions and the middle and west regions. Taking the subnational PPPs as a new distinctive spatial deflator, provincial income disparity exhibits an obvious descending trend. Notably, income disparity decreased significantly after deflating, for both urban and rural regions. [ABSTRACT FROM AUTHOR]

Low socioeconomic status is associated with a high stroke risk. However, few studies have quantitatively assessed the relationship between stroke burden and national economic development indicators. We explored the quantitative association between macroeconomic development and stroke burden in rural China. In this population-based, prospective study (1992–2016), we collected data on annual registrations of stroke events and deaths in Tianjin, China. Economic development over the period was represented by gross domestic product annually adjusted for purchasing power parity (PPP-aGDP) and per capita net income (PCNI) of rural residents in China. We assessed the association of first-ever stroke incidence with PPP-aGDP and PCNI. During the 25-year study period, there were 1,185 stroke events and 362,296 person years of surveillance. First-ever stroke incidence increased by an average of 10.7% per 1,000 USD increase in overall PPP-aGDP and by 12.0% per 1,000 Yuan increase in PCNI; respectively, the mean increases were 9.6 and 10.8% in men and 13.0 and 14.4% in women (all, P < 0.001). These same changes in PPP-aGDP and PCNI also resulted in increases in the incidence of ischemic stroke (12.6 and 14.3%, respectively; P < 0.05), and intracerebral hemorrhage (both, 6.2%; P < 0.05). Similarly, in men, the age of onset of intracerebral hemorrhage decreased by 0.96-years (P = 0.002) for each 1,000 USD increase in PPP-aGDP and by 1.08-years (P = 0.003) for each 1,000 Yuan increase in PCNI. Macroeconomic development was positively associated with stroke incidence in rural China. Thus, enhancing health-care investments is crucial for containing the stroke burden during this remarkable economic development in China. Our findings could guide other developing countries with information regarding the timely control of stroke risk factors and reductions in stroke burden during the initial stages of economic development. [ABSTRACT FROM AUTHOR]

China has pledged reduction of carbon dioxide (CO2) emissions per unit of gross domestic product (GDP) by 60 %–65 % relative to 2005 levels, and to peak carbon emissions overall by 2030. However, the lack of observational data and disagreement among the many available inventories makes it difficult for China to track progress toward these goals and evaluate the efficacy of control measures. To demonstrate the value of atmospheric observations for constraining CO2 inventories we track the ability of CO2 concentrations predicted from three different CO2 inventories to match a unique multi-year continuous record of atmospheric CO2. Our analysis time window includes the key commitment period for the Paris Agreement (2005) and the Beijing Olympics (2008). One inventory is China-specific and two are spatial subsets of global inventories. The inventories differ in spatial resolution, basis in national or subnational statistics, and reliance on global or China-specific emission factors. We use a unique set of historical atmospheric observations from 2005 to 2009 to evaluate the three CO2 emissions inventories within China's heavily industrialized and populated northern region accounting for ∼ 33 %–41 % of national emissions. Each anthropogenic inventory is combined with estimates of biogenic CO2 within a high-resolution atmospheric transport framework to model the time series of CO2 observations. To convert the model–observation mismatch from mixing ratio to mass emission rates we distribute it over a region encompassing 90 % of the total surface influence in seasonal (annual) averaged back-trajectory footprints (L_0.90 region). The L_0.90 region roughly corresponds to northern China. Except for the peak growing season, where assessment of anthropogenic emissions is entangled with the strong vegetation signal, we find the China-specific inventory based on subnational data and domestic field studies agrees significantly better with observations than the global inventories at all timescales. Averaged over the study time period, the unscaled China-specific inventory reports substantially larger annual emissions for northern China (30 %) and China as a whole (20 %) than the two unscaled global inventories. Our results, exploiting a robust time series of continuous observations, lend support to the rates and geographic distribution in the China-specific inventory Though even long-term observations at a single site reveal differences among inventories, exploring inventory discrepancy over all of China requires a denser observational network in future efforts to measure and verify CO2 emissions for China both regionally and nationally. We find that carbon intensity in the northern China region has decreased by 47 % from 2005 to 2009, from approximately 4 kg of CO2 per USD (note that all references to USD in this paper refer to USD adjusted for purchasing power parity, PPP) in 2005 to about 2 kg of CO2 per USD in 2009 (Fig. 9c). However, the corresponding 18 % increase in absolute emissions over the same time period affirms a critical point that carbon intensity targets in emerging economies can be at odds with making real climate progress. Our results provide an important quantification of model–observation mismatch, supporting the increased use and development of China-specific inventories in tracking China's progress as a whole towards reducing emissions. We emphasize that this work presents a methodology for extending the analysis to other inventories and is intended to be a comparison of a subset of anthropogenic CO2 emissions rates from inventories that were readily available at the time this research began. For this study's analysis time period, there was not enough spatially distinct observational data to conduct an optimization of the inventories. The primary intent of the comparisons presented here is not to judge specific inventories, but to demonstrate that even a single site with a long record of high-time-resolution observations can identify major differences among inventories that manifest as biases in the model–data comparison. This study provides a baseline analysis for evaluating emissions from a small but important region within China, as well a guide for determining optimal locations for future ground-based measurement sites. [ABSTRACT FROM AUTHOR]

This paper aims to assess whether the purchasing power parity (PPP) holds by examining the dynamic link between nominal exchange rate (NER) and relative consumer price (RCP) in China. With economic transitions and structural changes existing, we discover that by using full sample data the PPP does not hold. Consequently, we apply the rolling window causality method in order to reconsider the dynamic causal link, and as a result we observe NER having both positive and negative impacts on RCP in some sub-periods. However, RCP has no effect on the NER, meaning that the PPP does not hold. Trade cost, restrictions and imperfect competition are considered in explaining the deviations in some sub-sample periods. Therefore, this empirical result has important implications for stakeholders to distinguish factors that bring about the PPP deviations and further offers policy suggestions for the Chinese monetary authority. [ABSTRACT FROM AUTHOR]

In this paper the attempt is to raise another dimension of trade, namely, the value of Chinese currency vis-à-vis US dollar. One of the main motivations of our paper is to address the prime question of whether the Chinese currency is actually undervalued or has it been appreciating over the years? The current trade war is, at least, in part driven by the nervousness on the part of the USA that the Chinese currency is actually undervalued and, hence, leads to USA having a mounting current account deficit. Our study shows that Chinese Yuan has been growing at half per cent per annum in the past 22 years. China's Current Account Balance (CAB) has remained positive and growing, whereas, USA's CAB has remained negative. There is an 80% correlation between USA's loss and China's gain in share of foreign reserves, which has grown at 9% p.a..in recent years. [ABSTRACT FROM AUTHOR]

This paper studies how the major economic events would have affected Chinese yuan's nominal exchange rate against US dollar from 1989 to 2013. The traditional average treatment effect estimation methods cannot be used to consistently estimate yuan's pegged exchange rate. We develop a new estimation strategy by combining a novel panel data method (proposed by Hisao, Ching and Wan) and the purchasing power parity theory. Based on this new estimation strategy, we find that during the period of pegging to US dollar, Chinese yuan were undervalued. Before the 1997 Asian Financial Crisis, the pegged exchange rate regime starting from January 1994 made the yuan undervalued by 2.62%. China's accession to WTO caused yuan undervalued by 36.60%. After the reform of Chinese exchange rate policy in July 2005, the undervaluation of the yuan was reduced to only 0.76%. Yuan was undervalued again by 20.43% because of 2008 China's economy stimulus package. The policy reform in June 2010 made yuan overvalued by 14.40%. We conclude that Chinese fixed exchange rate policy indeed undervalued the yuan, especially after its accession to WTO. The recent reforms of Chinese exchange rate policy made progresses in re‐evaluating the yuan. [ABSTRACT FROM AUTHOR]

We propose a triangular purchasing power parity (PPP) analytical framework, which is theoretically justified and empirically validated. The mechanisms and channels through which a seemingly mystery relationship emerges are deliberated and examined, which renders significant implications to international monetary economics, finance and business. The de facto peg of the RMB to the US dollar, together with trade activities and arrangements, causes a triangular PPP effect that the dollar euro exchange rate is not a function of the relative prices in the US and Euroland. Instead, it becomes a function of the relative prices in the People's Republic of China (PRC) and Euroland. The results are supportive of triangular PPP in a three‐economy world of the US, Euroland and PRC. [ABSTRACT FROM AUTHOR]

In this paper, we provide an empirical investigation of the purchasing power parity (PPP) hypothesis for China before July 1937. Using the monthly data from 1922 to 1937, we find clear and consistent evidence in favor of the purchasing power parity relationship. This naturally leads to the conclusion that the degree of Chinese market integration with the West was substantial before July 1937. These findings offer an empirical interpretation of the rise and fall of the Chinese price level during the Great Depression. It also has further implications of the impact of the American Silver Purchase Act of 1934 and the assessment of the 1935 currency reform on the Chinese economy. [ABSTRACT FROM AUTHOR]

The estimation of Sub-national purchasing power parities (PPPs) for countries where the regions and provinces have different level of development is fundamental for income, consumption, standard of living real term comparisons, as well as for measuring cross-region welfare inequality. This is even truer for large countries like China, where the above aggregates exhibit great variability among provinces. The aim of this paper is to compute the price level differences, measured by the PPPs, for 31 Chinese Provinces and Municipal Cities, based on a sample of 62 goods and services for the year 2014. To our knowledge, this is the first attempt to do it since many years. After a short review of previous studies on China cross-province and municipal cities price level differences measurement and the illustration of methodology and data used, the results of our elaborations are presented and discussed. Taking Beijing as the base area, there is evidence that the PPP max/min ratio is 1.74, confirming the common belief that China cross-province and municipal cities price levels are significantly different. [ABSTRACT FROM AUTHOR]

This paper systematically presents a survey of the empirical literature studying the embodied CO 2 emissions in China’s foreign trade (ECCT). Based on the bibliometric method and the online version of Science Citation Index-Expanded (SCI-E) and Social Sciences Citation Index (SSCI), this study summarizes the latest publications regarding ECCT in peer-reviewed journals in terms of quantities, most productive countries, institutions, authors, citations, and disciplines. By using synthetic analysis of keyword frequency, this study reveals the most popular methodologies applied in measuring ECCT, discusses the variation of numerical results in the literature, and reasons and countermeasures for the results uncertainties. Continuous investigation of the literature releases the methodology employed for measuring ECCT becoming more reasonable and the results more critical. However, the numerical results of ECCT are of great discrepancies within given year by different considerations on methodology specification, accounting principles, and data sources and processing. For instance, the estimates of CO 2 embodied in China’s exports changed from 478 Mt to over 3000 Mt and those of in China’s imports ranged from 140 Mt to over 1700 Mt in 2007. Therefore, overcoming data inherent limitations and reducing discrepancies among available databases should be urgently considered. The results imply that the prospective research tendencies on ECCT are to (1) improve China’s regional input-output data and energy intensity data to more precise estimates under global perspective; (2) estimate China’s carbon emission at firm level by different firm ownerships in production and consumption worldwide; (3) assess China’s carbon emission from processing or non-processing trade by compiling more detailed multi-regional input-output table; (4) evaluate city level carbon mitigation capacity in China under global MRIO model; (5) explore new carbon management experience in China’s carbon trading market and new trade expansion policy of ‘ one belt and one road’ in her new growth era. [ABSTRACT FROM AUTHOR]

The purpose of this research was to determine whether there was price parity for hotel rooms in Macao. The study collected room prices based on hotel star categories at various sales channels. The room prices included three types of booking: reservations made on the day of stay, those made 14 days ahead, and those made 30 days ahead. The results were the same for the three types: price parity was observed for rooms at three-star and four-star hotels but not at five-star hotels. The authors offer explanations for these results and suggestions for hotel guests who intend to book rooms during their visit to Macao. [ABSTRACT FROM AUTHOR]

This article examines the contribution of competitiveness and trade product structure to China’s commercial links with ten states located in Central and Eastern Europe (CEE). A constant market share analysis for the 2002–2011 period shows that, except for Romania, both CEE states and China increased their market shares in each other’s market mainly due to their improved competitiveness in intermediate goods. However, with the notable exception of Slovakia, other CEE economies and China tended to gain market shares in product groups characterised by relatively non-dynamic import demand growth. This mismatch between the Competitiveness and Structure Effects points to the room for an expansion of China–CEE trade. [ABSTRACT FROM AUTHOR]

After more than three decades of stupendous growth, China is in the process of making the painful transition to a lower growth path. As it does so, the ruling CPC is increasingly turning to nationalism to provide legitimacy in the eyes of its own people. China now openly seeks to ‘display its prowess’ and ‘assume its responsibilities’ in the world. However, it still lacks the capability to impose a political or security order of its own in its immediate neighbourhood. There is, therefore, likely to be a period of instability in the Asia–Pacific region, and the environment in which India pursues its interests will get more complex. China and India today have a relationship with elements of both cooperation and competition. While both countries have a common interest in improving on the existing security and economic order, they compete in the periphery they share. A danger present in present-day India–China relations comes from the mutual gap between perception and reality. Nevertheless, this article argues that this is a moment of opportunity for India–China relations, and that each country could benefit its core interests by working with the other. [ABSTRACT FROM AUTHOR]

Its newly acquired status as the world's second largest economy has entitled China to a more prominent role in global affairs, and increasingly, its behavior has drawn scrutiny from the world in ways that the country is ill-prepared for. The attention to China's rise, however, focuses not only on its economy but also on other aspects, including its military, diplomatic moves, domestic politics and its ‘soft power’, namely, its own image or self-projection and the world's perception or attitudes toward China. And yet, there has been no systematic investigation to evaluate how the world views a rising China. In this article, the authors applied the latest dataset from the Asian Barometer Survey to investigate whether East Asians recognize and welcome the rise of China. The findings suggest that geographical and cultural proximity have a great impact on people's perception of China. Countries which are territorially adjacent or culturally close to China tend to regard China as the most influential country in Asia. With the exception of Japan and Mongolia, most Asian countries hold positive views about the impact of China on the region. However, such benign evaluations are weaker in countries which have potential security conflicts with China, such as Taiwan and South Korea, when only the bilateral impact is considered. The overall picture shows that the rise of China has been largely recognized and welcomed by East Asians, despite some apprehension about China's strategic intentions to its neighboring countries. [ABSTRACT FROM PUBLISHER]

Recognizing the purchasing power of Chinese shoppers in the global luxury market, this study explores the luxury-brand preferences of a unique transnational consumer community of young, cosmopolitan Chinese consumers. Specifically, the effects of Chinese consumers' American and Chinese cultural identifications on their snob and bandwagon luxury-brand preferences are examined. The mediating effects of bridging and bonding social capital, consumer susceptibility to normative influence, and consumer need for uniqueness are also considered. Study findings advance existing theoretical understanding of luxury consumption and provide managerial implications for international luxury branding. [ABSTRACT FROM AUTHOR]

China and India today represent Asia's two largest and most dynamic societies which are emerging as new trend setters in the international relations and have come to play an increasingly dominant role in the world economic affairs. Especially, with their enormous average GDP growth rates standing at 10% (China) and 6% (India), they have been recognized as the fastest growing economies of the last decade (2000-2010). According to the World Bank estimates of 2010, assessed on the basis of purchasing power parity, China and India have already become the second and fourth largest economies respectively of the world surpassing the developed economies. Today, from the global perspective, these two Asian giants are considered as major drivers of the world economy. It is in this context that the current paper makes an attempt to hypothesize the bilateral trading relations between India and China and assess the potentiality of their future trade. [ABSTRACT FROM AUTHOR]

This study applies a simple and powerful nonlinear unit root test proposed by Sollis (2009) to investigate the Purchasing Power Parity (PPP) for China's real exchange rate vis-a-vis her nine trading partner countries over the period January 1986 to October 2009. The empirical results indicate that China's real exchange is a nonlinear process and a unit root in real exchange rate was not found for most of the cases under study. These results provide strong support for PPP for China relative to her major trading partner countries. [ABSTRACT FROM AUTHOR]

We estimate the nominal equilibrium exchange rate (EER) of the Chinese renminbi (RMB) vis-à-vis the US dollar from 1995 to 2009. While most of the recent empirical studies on the EER employ a cross-country analysis, country-specific factors, especially supply-side real factors, are not fully taken into consideration in estimating the EER. To better reflect China's processing exports in the context of growing intra-regional trade in Asia, we incorporate in the empirical analysis the source-country breakdown data on import prices and input coefficients of intermediate inputs by constructing an annual new International input-output (IIO) table for the period from 1995 to 2009. The results show that the nominal EER of the RMB appreciates sharply from 2006 to 2009, suggesting that the current RMB exchange rate has been substantially undervalued and should be revalued by 74 per cent as of 2008 compared to the year 2004 level. Such sharp appreciation of the nominal EER corresponds to the dramatic increase in China's current account surplus from the mid-2000s, especially against the United States, which is ascribed to the significant improvement of China's intermediate input coefficients and, to a lesser extent, an increase in US import prices of intermediate inputs. [ABSTRACT FROM AUTHOR]

This empirical note applies the threshold unit root test proposed by Caner and Hansen (2001) to test the validity of long-run Purchasing Power Parity (PPP) in Mainland China and Taiwan over the period of January 1986 to October 2009. The empirical results indicate that PPP holds true for the two areas under study, and the adjustment towards PPP is found to be nonlinear. [ABSTRACT FROM AUTHOR]

This study applies threshold cointegration test advanced by Enders and Siklos (2001) to investigate the properties of asymmetric adjustment in long-run Purchasing Power Parity (PPP) for China during the period of March 1985 to September 2008. Although there is evidence of long-run PPP for China, when both the United States and Japan are served as the base country, the adjustment mechanism is asymmetric only when the United States is served as the base country. These results have particularly important policy implications for China. [ABSTRACT FROM AUTHOR]

This article adopts a time-varying parameter model to investigate whether the economic downturn has affected convergence of the consumer price index. The dynamic patterns of the intranational purchasing-power parity coefficients in mainland China before and after the financial tsunami are found to differ, indicating that the convergence has indeed been adversely affected by the downturn. [ABSTRACT FROM AUTHOR]

The primary aim of this study is an attempt to determine whether the Purchasing Power Parity (PPP) hypothesis holds for those countries that have collectively come to be known as 'BRICs', namely, Brazil, Russia, India and China. We use the momentum threshold cointegration tests (advanced by Enders and Siklos, 2001) to investigate whether any asymmetric adjustment is discernible for BRICs, and show that whilst the Engle-Granger test (which assumes only symmetric adjustment) fails to reveal any cointegrational relationship for BRICs, the threshold cointegration test (with asymmetric adjustment) provides clear evidence of long-run PPP for BRICs, with the notable exception of China. We conclude that asymmetric adjustment of nominal exchange rates plays an important role in eliminating deviations from long-run PPP. [ABSTRACT FROM AUTHOR]