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The Impact of Rapid Aging and Pension Reform on Savings and the Labor Supply: the Case of China

Hui He, Lei Ning, Dongming Zhu, Jun 26, 2019

Individuals can use savings and labor supply to self-insure against uncertainties over their life cycle, such as idiosyncratic income shocks and changes in longevity and pension benefits. Using China as a case study, we investigate, both empirically and quantitatively, the impact of rapid aging and pension reform on savings and the labor supply, and the roles...

Industry/Policy View China’s Digital Economy: Opportunities and Risks

Longmei Zhang, Sally Chen, Aug 28, 2019

China’s digital economy has expanded rapidly in recent years, including both the emergence of new digital industries and the digitalization of traditional sectors. This brings significant opportunities but also potential risks. The blog discusses the pros and cons of digitalization and how the government can do better in maximizing the benefit while minimizing the risks.

The Reference Effect of Government Bonds on Corporate Borrowing Costs

Mark J. Flannery, Claire Yurong Hong, Baolian Wang, May 29, 2019

It has been widely argued that government bonds can be used as a reference point for pricing corporate bonds. This “reference” role can reduce the cost of corporate borrowing. The authors study this question by examining a unique experiment in China. China issued two sovereign bonds denominated in U.S. dollars (USD) in October 2017, the first...

E-Commerce Development and Household Consumption Growth in China

Xubei Luo, Yue Wang, Xiaobo Zhang, Sep 04, 2019

China has quickly become the largest e-commerce market in the world. E-commerce has reshaped consumption patterns in recent years. This paper examines how e-commerce development has shaped household consumption growth in China. It finds that e-commerce development is associated with higher consumption growth, that the link is stronger for the rural sample, inland regions, and poor households...

Rise of Bank Competition: Evidence from Banking Deregulation in China

Haoyu Gao, Hong Ru, Robert Townsend, Xiaoguang Yang, Aug 17, 2019

This paper documents a novel trade-off of banking deregulation in the context of China by using loan-level big data. We find that following a deregulation in the form of geographically lowered bank entry barriers, the potential benefits such as the lower interest rates for borrowers were mitigated adversely by the worsening credit allocation. The soft budget constraint...