This Special Section arises from paper submissions to the 10th biennial conference of Hong Kong Economic Association (HKEA) held at Xiamen University in Xiamen, China, from December 14 to 15, 2018. The conference was co-organized with the School of Economics, Wang Yanan Institute for Studies in Economics (WISE), and Gregory and Paula Chow Center for Economics Research of Xiamen University. In this section, we select two papers that focus on issues related to China and the world economy.
One of China’s most important policy initiatives in recent years is the ‘Belt and Road Initiative’ (BRI) announced by President Xi Jinping in Nov. 2013. The BRI aims to connect China with countries in Central Asia, Central and Eastern Europe, Russia and Western Europe, and to link China with countries in Africa and Europe through maritime route that goes through Southeast Asia, Middle East and West Asia. The BRI region covers more than 60 countries with a total population of over 4 billion and a lion share of the world’s output. The impact study of this giant project is still in its infancy.
The first paper by Voon and Xu examines the impact of China’s BRI from a unique perspective, i.e. whether China’s overseas direct investment (ODI) in general, and investments in countries covered by China’s BRI in particular, announced in late 2013, help improve China’s soft power. Using country-level panel data on China’s overseas investments and survey data on China’s soft power, the paper finds that the overall impact of ODI in BRI countries on China’s soft power after the launch of BRI in 2013 is positive and statistically significant only for the investments in the BRI countries along the ‘Belt’ route, but not for those along the ‘Road’ route. The result raises important questions for future study as to what factors are holding back the effects of this massive investment project.
Another topic of heated debate recently is the rise of income inequality and populism around the world. Macau, a special administration region of China, is an interesting case for study. Importantly, following the fast expansion in casino gaming, we observe that there are rising income inequality and a housing bubble. Does the fast expansion in casino gaming worsen income inequality and result in a housing bubble? The second paper by Gu et al. studies this question more formally through a vector autoregressive model with exogenous variables (VARX) and an autoregressive distributed lag model (ARDL). Their results show that this is exactly the case. The policy recommendations are well discussed in the paper.
Acknowlegements
We wish to thank Professors Yue Ma and Hong Hwang, the Editors of the Asia-Pacific Journal of Accounting & Economics and Professor Larry Qiu, Chairman of HKEA, for commissioning this special section. We are also grateful for the generous help of the reviewers for this special section.
Disclosure statement
No potential conflict of interest was reported by the author.