A Bridge on Economic Issues between China and the World
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Book Synopsis The Making of an Economic Superpower: Unlocking China’s Secret of Rapid Industrialization
Yi Wen, Sep 27, 2017This book argues that China’s rapid industrialization since 1978 can be attributed to its rediscovery of the secret recipe of the original Industrial Revolution. The secret recipe is not based on institutional changes per se but rather the sequential creation of mass markets to support mass production. Market creation requires a strong state and appropriate industrial policies because mass markets are a public good that is extremely costly to create and can only be created through stages and under enormous political stability and social trust.
How did China Move Up the Global Value Chains?
Hiau Looi Kee, Heiwai Tang, Aug 30, 2017The paper examines China's rising domestic content in exports using firm and customs transaction-level data. China's domestic content in exports increased from 65 percent in 2000 to 70 percent in 2007. The key reason for China’s ascent on global value chains is due to individual processing exporters substituting domestic products for imported materials, induced by the country’s trade and FDI liberalizations.
China’s Shadow Banking Sector: Wealth Management Products and Issuing Banks
Viral V. Acharya, Jun Qian, Zhishu Yang, Aug 09, 2017The issuance of Wealth Management Products (WMPs) is an important form of shadow banking activities in China, especially after 2011. Viral Acharya, Deputy Governor of the Reserve Bank of India, Prof. Jun “QJ” Qian of Fanhai International School of Finance, Fudan University and Prof. Zhishu Yang of Tsinghua University examine the causes, main players and impacts on the banking system of China’s rising WMPs. They also compare the differences between the U.S. shadow banking sector and its counterpart in China.
The Burden of Education Costs in China: A Struggle for All, but Heavier for Lower-Income Families
Dezhuang Hu, Hongbin Li, Tang Li, Lingsheng Meng, Binh Thai Nguyen, Mar 27, 2024Household education expenditure in China accounts for a substantial portion of household income, averaging around 17.1%, and it is inversely related to household income. As a necessity, education expenditure imposes excessively high costs on lower-income families. China needs to formulate policies to alleviate the financial burden on families, reform the school system, and enhance educational equity.
Daily Price Limits and the Magnet Effect
Ting Chen, Zhenyu Gao, Jibao He, Wenxi Jiang, Wei Xiong, Oct 25, 2017We find that the widely adopted daily price limit rules may induce large investors as a group to pursue a destructive trading strategy of pushing stock prices to the upper price limit and then profiting from selling these stocks on the next day. Their trading accelerates the price increase on the day that the upper price limit is reached, thus leading to the so-called Magnet Effect. This unintended effect renders the daily price limits — a market stabilization scheme — counterproductive.
