Latest

Do Richer Households Exit Agriculture? Positive Income Shocks in Rural China

Jessica Leight, Jul 18, 2018

Rural households in China have experienced a steadily increasing rise in their real income over the last twenty years as economic reforms have revitalized this sector. Analyzing an unusual natural experiment generated by an increase in prices paid for mandatory grain procurement in China post-1993, I seek to provide evidence around how an increase in permanent income affects households’ production portfolio. Evidence suggests that households experiencing positive income shocks substitute away from agricultural production and are more likely to migrate and to invest in non-agricultural production. They also increase their observed levels of borrowing and non-staple consumption.

Industry/Policy View The US-China Trade War Is Based on Misleading Statistics

Zhiwei Zhang, Yi Xiong, Xinyu Ji, Jul 11, 2018

General Motors and Apple sold more cars and iPhones in China than in the US, but their sales were not counted as US exports to China, as these were made and sold in China. Policymakers should look at both trade and local sales by foreign firms (the FDI channel) to gauge bilateral economic balance. We estimate that US firms sold more goods and services to China than Chinese firms sold to the US in 2017, once the FDI channel is taken into account.

Rising Intergenerational Income Persistence in China

Yi Fan, Junjian Yi, Junsen Zhang, Jul 04, 2018

Although studies on economic inequality and intergenerational mobility have gained traction in the last decade, little is known about the temporal changes in the intergenerational association of economic status, especially in developing and transitional economies. We find an increasing pattern in intergenerational income persistence across China’s transitional period. To promote intergenerational mobility, the Chinese government should continue to remove rural-urban migration barriers and initiate various programs to subsidize the education of children from disadvantaged families, known as the “left-behind” children.

Trends and Cycles in China’s Macroeconomy

Chun Chang, Kaiji Chen, Daniel F. Waggoner, Tao Zha, Jun 27, 2018

China’s spectacular growth over the 2000s has slowed since 2013. The driving force behind the country’s growth was investment, so the key to understanding the slowdown lies in understanding what sustained investment in the past. This column shows how a preferential credit policy promoting heavy industrialisation explains the trends and cycles in China’s macroeconomy over the past two decades. This policy was not without negative consequences, particularly in terms of the distortions it introduced for business finance. Going forward, China needs to focus on creating the right incentives for banks to make loans to small productive businesses.

Recent

Carry Trade with Chinese Characteristics

Yi Huang, Ugo Panizza, Richard Portes, Jun 13, 2018 

Is the Wife A Risk Mitigator? Evidence from Family Firms in China

Yue Pan, Jinli Xiao, Vincent W. Yao, Jian Zhang, Jun 06, 2018 

How the Internet Changed Chinese Exports before Ali Baba Came

Ana M. Fernandes, Aaditya Mattoo, Huy Nguyen, Marc Schiffbauer, May 16, 2018 

Evaluating the Burden of a U.S.-China Trade War

Meixin Guo, Lin Lu, Liugang Sheng, Miaojie Yu, Apr 25, 2018