A Bridge on Economic Issues between China and the World
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The Price of Growing Like China: Higher Income Risks and Less Consumption Insurance
Raül Santaeulàlia-Llopis, Yu Zheng, Jun 20, 2018Widening income inequality in China has prompted President Xi Jinping to shift focus and to emphasize the fostering of balanced, high-quality development. But how exactly did income inequality evolve over China’s growth process and what was its impact on consumption and welfare? Using a long panel of income and consumption data from thousands of rural and urban households, we document that the increasing income inequality in China mainly reflects increasing permanent income risk, against which it became harder and harder to insure consumption, over the period of rapid income growth from 1989 to 2009. In other words, as household income grew, so did income fluctuations. These income fluctuations had an increasingly direct impact on consumption. For rural households, the welfare cost from increasing income risk and increasing exposure of consumption to income risk can almost cancel out the welfare gain from accelerated income growth over those twenty years.
Unequal Transition: The Widening Wealth Gap amidst China’s Rapid Growth
Yangtian Jiang, Yu Zheng, Lijun Zhu, Nov 08, 2023We examine the drivers of rising wealth inequality in urban China since 1995. We highlight the intertwined nature of growth and equity during China’s transition toward a market-oriented economy.
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...
Chinese Infrastructure Projects Help Spread Economic Activity in the Global South
Richard Bluhm, Axel Dreher, Andreas Fuchs, Bradley C. Parks, Austin M. Strange, Michael J. Tierney, Dec 29, 2021Using our recently published geolocated dataset on Chinese government-financed transport infrastructure investments from 2000 to 2014, we show that these investments lead to a decentralization of economic activity within the subnational jurisdictions where they are located. Our analysis documents that this decentralization shifts activity toward suburban and peri-urban areas in low-income countries. We find no evidence suggesting that these projects systematically alter the distribution of activity across subnational jurisdictions.
The Real Effects of the Chinese Stock Market
Itay Goldstein, Bibo Liu, Liyan Yang, Sep 29, 2021In a 2019 survey jointly administered by the China Securities Regulatory Commission (CSRC) and the PBC School of Finance at Tsinghua University (Tsinghua PBCSF), more than 90% of Chinese public firms report that they closely monitor the stock market for the purposes of learning information to guide real investment decisions and of accessing external financing. These findings provide direct evidence for the wide existence of market feedback via a learning channel and a financing channel, suggesting that the Chinese stock market is not just a side show, but instead, affects the real economy.
