A Bridge on Economic Issues between China and the World
Facebook 
Twitter 
Instagram
WeChat 
Email Most Popular
Selective Default by Local Governments in China
Haoyu Gao, Hong Ru, Dragon Yongjun Tang, Jan 10, 2018We identify bank loans to China’s local government financing vehicles and find that 1.7% of the loans that matured during the sample period failed to make the due payments. The LGFV loan default rate is much higher for commercial banks than for the China Development Bank, which provides more comprehensive financing for local governments than typical commercial banks. This selective default pattern is weaker during the ¥4-trillion stimulus period but stronger after 2010 when commercial banks exited the LGFV market.
A New Perspective on China’s Credit Boom
Kinda Hachem, Michael Zheng Song, Jun 20, 2017What caused the enormous credit boom in China? This column by Kinda Hachem and Michael Song offers an unexpected explanation of stricter liquidity regulations on banks leading to a credit boom through competition between small and big banks and their heavy use of shadow banking investment instruments.
Trade Liberalization and the Performance of China’s Manufacturing Sector
Loren Brandt, Johannes Van Biesebroeck, Luhang Wang, Yifan Zhang, Dec 27, 2017China’s entry into WTO resulted in a significant reduction in tariffs on imported manufactured goods into China. We examine the effects of market liberalization on firm and industry performance. Tariff cuts on outputs and intermediates had highly complementary effects on productivity, and explain in upwards of forty per cent of the productivity gains between 1998-2007. The effects on mark-ups were largely offsetting, however lower tariffs on inputs helped to provide additional resources for productivity-enhancing investments.
Lessons from the Baby Bonus in South Korea: Increased Births and Restored Natural Sex Ratio
Wookun Kim, Jan 20, 2021I study the causal effects of South Korea’s baby bonus on fertility by exploiting temporal and spatial variation in pro-natalist cash transfers provided to families with newborn babies. Based on registry records spanning the universe of births from 2000 to 2015, I find that the baby bonus increased completed fertility: in the absence of the policy, the total fertility rate in 2015 would have been lower by 3%, which is equivalent to 450,000 fewer babies born...
Black Markets for License Plates in Chinese Megacities
Oystein Daljord, Mandy Hu, Guillaume Pouliot, Junji Xiao, Jan 29, 2020Chinese megacities ration new car sales by capping the number of license plates they issue that permit driving within city limits. Concerns regarding the fairness of this policy have led city governments to use lotteries to allocate either all or a share of the license plates. Lotteries create gains from trade that have stimulated black markets for license plates in such cities...
