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China’s Rise, Changing Stripes, and Global Implications of a Potential Slowdown

Shaghil Ahmed, Feb 14, 2018

China’s remarkable economic rise over the past three decades has yielded many benefits to its own citizens and to people all around the globe. But the export-led growth model that underpinned China’s success and its increased role in the global economy has also led over time to the development of some serious imbalances in its economy. How China deals with these imbalances will have important implications for the rest of the world going forward—in particular, the quantitative analysis reported here suggests that were China to experience a financial crisis, the hit to the rest of the world would be substantial.

Measuring Chinese Shadow Banking: Banks’ Shadow and Traditional Shadow Banking

Guofeng Sun, Feb 07, 2018

Shadow banking in China includes an important role for Banks’ Shadow in the credit money creation process, which poses challenges to monetary policy regulation and financial risk management. I urge regulators to closely track the evolution of various shadow banking channels both on- and off-balance sheet. To strengthen supervision, separate macro-prudential regulation tools, such as asset reserves and risk reserves, are needed for Banks’ Shadow and Traditional Shadow Banking, respectively.

Privatization and Productivity in China

Yuyu Chen, Mitsuru Igami, Masayuki Sawada, Mo Xiao, Jan 31, 2018

Privatization has boosted Chinese firms’ productivity, both in the short run and the long run. Consumer-oriented industries saw larger gains than “strategic” (heavily regulated) sectors. Chinese patents and “new product” surveys seem less reliable, because any statistics become useless once they become policy targets.

The Long-term Persistence of Informal Finance in China

Jinyan Hu, Chicheng Ma, Bo Zhang, Jan 24, 2018

By using data on 137 counties in north China, we find that the density of financial institutions (Qianzhuang and Diandang) in the late Qing period has a significant positive effect on the number and total assets of small loan companies, a dominant institution of informal finance today. The persistent effect of historical financial institutions can be explained by Confucian culture, which instills integrity, lineage solidarity and acquaintance networks.

Recent

Rural Property Rights and Agricultural Productivity

A. V. Chari, Elaine M. Liu, Shing-Yi Wang, Yongxiang Wang, Jan 17, 2018 

Selective Default by Local Governments in China

Haoyu Gao, Hong Ru, Dragon Yongjun Tang, Jan 10, 2018 

Trade Liberalization and the Performance of China’s Manufacturing Sector

Loren Brandt, Johannes Van Biesebroeck, Luhang Wang, Yifan Zhang, Dec 27, 2017 

Healthy Life Expectancy in China

Han Li, Katja Hanewald, Shang Wu, Dec 20, 2017 

China Needs Tighter Macro-Prudential Regulations to Loosen Capital Controls

Ambrogio Cesa-Bianchi, Andrea Ferrero, Alessandro Rebucci, Nov 29, 2017 

China Caught in the “Middle-Income Trap”?

Linda Glawe, Helmut Wagner, Nov 22, 2017