General Motors and Apple sold more cars and iPhones in China than in the US, but their sales were not counted as US exports to China, as these were made and sold in China. Policymakers should look at both trade and local sales by foreign firms (the FDI channel) to gauge bilateral economic balance. We estimate that US firms sold more goods and services to China than Chinese firms sold to the US in 2017, once the FDI channel is taken into account.
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.
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.
China’s government mandates that foreign investors in certain industries form joint ventures with a domestic Chinese partner. We use a dataset that accounts for all joint ventures in China from 1998 to 2007 to show that this policy is successful in its aim of encouraging technology transfers from foreign investors to domestic operations. We find empirical evidence for the existence of at least three channels through which this transfer takes place.
When comparing the credit ratings of domestic and global agencies on Chinese corporations, because of the differences in ratings scales, it is best to focus on the domestic and global agency orderings of relative credit risk. Testing for differences in the determinants of ratings, we find that asset size is weighed more heavily as a positive factor by domestic agencies, while profitability and state-ownership are weighed more positively by global rating agencies, which also weigh leverage more heavily as a negative factor. In spite of these differences, both domestic and global ratings appear to be priced into the market values of rated bonds.