We bring new Chinese housing market data and analysis to the study of supply and demand conditions. There is substantial variation in supply–demand balances across markets. Bigger inventory overhangs predict lower house price growth the next year.
The re-lending business is a particular activity of shadow banking in China, in which some non-financial firms borrow in order to lend, acting as de facto financial intermediaries. Julan Du and Chang Li from the Chinese University of Hong Kong and Yongqin Wang from Fudan University document this type of shadow banking in China using three different identification strategies. They also explore the factors that influence the firms' re-lending activities.
To encourage innovation, the Chinese government gave tax incentives to firms whose R&D intensity (as measured by the ratio of R&D expenditures over total sales) exceeds a threshold that varies by their total sales. Using a major corporate tax reform in 2008, Professor Daniel Yi Xu from Duke University and his coauthors provide empirical evidence for some "strategic" behavior — including some relabeling of administrative expenditures as R&D — by the firms to take advantage of the tax incentives.
Are China's official GDP growth number exaggerated? Hunter Clark, Jeff Dawson and Maxim Pinkovskiy from the New York Fed and Xavier Sala-i-Martin from Columbia University use satellite measurements of the intensity of China’s nighttime light emissions to proxy for GDP growth. Their estimate of Chinese GDP growth, since 2012, was never appreciably lower, and was in many years higher, than the GDP growth rate reported in the official statistics.
As the second largest economy, China intrigues heated debates among policymakers and researchers alike on how fast its economy will grow in the future and how truthfully the official data reflect its actual economic growth. Patrick Higgins and Tao Zha from the Atlanta Fed and Karen Zhong from Shanghai Advanced Institute of Finance develop a replicable econometric model to shed light on these issues.