A Bridge on Economic Issues between China and the World
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Relocating or Redefined: A New Perspective on Urbanization in China
Li Gan, Qing He, Ruichao Si, Daichun Yi, Mar 18, 2020We study the urbanization process in China during the past decade by deconstructing different sources of new urban residents. We find that around one-third of urban population growth in the past decade has consisted of redefined migrants from communities that have been reclassified from rural to urban, though they do not actually move. We further find evidence that failing to consider the number of redefined migrants and their housing behaviors leads to a high housing vacancy rate in China’s urban areas.
Rise of Bank Competition: Evidence from Banking Deregulation in China
Haoyu Gao, Hong Ru, Robert Townsend, Xiaoguang Yang, Aug 17, 2019This paper documents a novel trade-off of banking deregulation in the context of China by using loan-level big data. We find that following a deregulation in the form of geographically lowered bank entry barriers, the potential benefits such as the lower interest rates for borrowers were mitigated adversely by the worsening credit allocation. The soft budget constraint...
Faking Trade for Capital Control Evasion: Evidence from Dual Exchange Rate Arbitrage in China
Renliang Liu, Liugang Sheng, Jian Wang, Nov 25, 2020We examine whether firms over-report international trade to evade capital controls for foreign exchange arbitrage, by specifically testing whether the aggregate bilateral trade data gap between trading partners is positively (negatively) correlated with the exchange rate spread when the spread is positive (negative). At the disaggregated level, we also employ Benford’s law to detect trade data manipulations...
China’s Producer Price Reflation in 2016–2017: Capacity Cuts or Recovering Aggregate Demand?
Linxi Chen, Ding Ding, Rui C. Mano, Nov 23, 2018In late 2015, the Chinese government launched a multi-year plan to reduce capacity in the coal and steel industries. Around the same time, producer price inflation in China started to pick up strongly after being trapped in negative territory for 4½ years. What is behind this broad reflation—cuts in coal and steel capacity or a strengthening of aggregate demand...
How Does the Interaction between China’s Monetary and Regulatory Policies Impact Shadow Banking and Total Bank Credit?
Kaiji Chen, Jue Ren, Tao Zha, Jul 12, 2017Following the four Trillion RMB fiscal stimulus in 2009, People's Bank of China tightened up its M2 supply. Kaiji Chen, Jue Ren and Zha Tao from Emory University and Federal Reserve Bank of Atlanta explored how the banks reacted to the tightening of M2 supply by expanding shadow banking activities, and how the rapid growth of shadow banking in turn hampers the effectiveness of monetary policy.
