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China’s New Goal for Income Distribution: What Does it Mean and are There Tradeoffs?

Martin Ravallion, Shaohua Chen, Mar 16, 2022

China’s political leadership recently committed to expanding the proportion of middle-income groups to create a less polarised, and more ‘olive-shaped’, distribution of wealth. This column considers the potential trade-offs between reducing income polarisation and other goals, including poverty reduction.

Trade-Policy Dynamics: Evidence from 60 Years of US-China Trade

George Alessandria, Shafaat Khan, Armen Khederlarian, Kim Ruhl, Joseph Steinberg, May 04, 2022

International trade depends on the effects of past trade policy and expectations of future trade policy. Disentangling these two forces is difficult, but the US-China trade relationship is ideally suited for study. A large, and largely unexpected, trade liberalization in 1980 kicked off a long, gradual expansion of Chinese exports to the United States. Until China’s accession to the World Trade Organization (WTO) in 2001, these low tariff rates were relatively easy to revoke, generating time-varying uncertainty over their future values.

Is There an Industrial Land Discount in China? A Public Finance Perspective

Zhiguo He, Scott Nelson, Yang Su, Anthony Lee Zhang, Fudong Zhang, Jun 08, 2022

China’s land market, a key driver of the country’s extraordinary economic growth over the past 40 years, does not provide revenues to local governments via property taxes, unlike land markets in most developed economies.

Share Pledging in China: Funding Listed Firms or Funding Entrepreneurship?

Zhiguo He, Bibo Liu, Feifei Zhu, Jun 01, 2022

Our recent study analyzes the use of share pledging funds in the context of China. Survey evidence shows that a majority of the largest shareholders (67.3%) used pledging funds outside their listed firms, including financing their entrepreneurial activities.

Local Government Implicit Debt and the Pricing of LGFV Bonds

Laura Xiaolei Liu, Yuanzhen Lyu, Fan Yu, Jun 22, 2022

To examine the implicit guarantee provided by Chinese local governments to local government financing vehicles (LGFV), we create a proxy for local governments’ implicit debt ratio and find it correlated with the credit spread of LGFV bonds.