A Bridge on Economic Issues between China and the World
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Anxiety or Pain? The Impact of Tariffs and Uncertainty on Chinese Firms in the Trade War
Felipe Benguria, Jaerim Choi, Deborah Swenson, Mingzhi Xu, Nov 04, 2020We analyze the firm-level impacts of the US-China trade war since it is of great economic importance to understand how the unprecedented and dramatic increases in the import and export tariffs confronting Chinese firms affected the firm-level policy environment and firm operational outcomes. To contribute to this effort, we study how increases in US tariffs and Chinese retaliatory tariffs raised Chinese firms’ trade policy...
Do Interest Rates Play a Major Role in Monetary Policy Transmission in China?
Gunes Kamber, Madhusudan Mohanty, Aug 17, 2018We explore the role of interest rates in monetary policy transmission in China in the context of its multiple instrument setting. In doing so, we construct a new series of monetary policy surprises using information from high frequency Chinese financial market data around major monetary policy announcements. We find that a contractionary monetary policy surprise increases interest rates and significantly reduces inflation and economic activity. Our findings provide further support to recent studies suggesting that monetary policy transmission in China has become increasingly similar to that in advanced economies.
Going Green in China: Firms’ Responses to Stricter Environmental Regulations
Haichao Fan, Joshua Graff Zivin, Zonglai Kou, Xueyue Liu, Huanhuan Wang, Apr 29, 2020Evidence from China shows that firms respond to stricter enforcement of the emission reduction target by reducing their pollution. This effect is stronger for firms in industries with higher pollution intensity. Stricter environmental regulations also lead to sharp declines in firms’ profits, capital, and labor. A sequence of tests of the underlying mechanisms reveals...
In Rural China, Gift-Giving Is an Increasingly Costly Competition
Erwin Bulte, Ruixin Wang, Xiaobo Zhang, May 01, 2019Gift expenditures grow swiftly in rural China and may adversely affect people's welfare. While gift-giving helps to maintain social status and connections, gift competition may create a predicament: people must spend more and more to "keep up with the Joneses." As a result, the escalating gift expenses crowd out spending on other important consumption and become increasingly burdensome to people in rural areas, particularly to the poor.
Growing like China: Firm Performance and GVC Position
Davin Chor, Kalina Manova, Zhihong Yu, Apr 14, 2021We use firm-level customs and manufacturing survey data, together with Input-Output tables for China, to examine how Chinese firms position themselves in global production lines. We document a sharp rise in the upstreamness of China’s imports, while the positioning of its exports has remained relatively stable, over the 1992-2014 period. Participation in global value chains thus appears to have facilitated an...
