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Wealth Redistribution in the Chinese Stock Market: the Role of Bubbles and Crashes

Li An, Jiangze Bian, Dong Lou, Donghui Shi, Jul 01, 2020

Using comprehensive administrative data from China, we document a substantial increase in inequality of wealth held in risky assets by Chinese households in the 2014–2015 bubble-crash episode: the top 0.5% households in the equity market gained, while the bottom 85% lost, 250B RMB through active trading in this period, equating to 30% of each group’s initial equity wealth. In comparison, the return differential between the top and bottom groups in periods of a relatively calm...

Privatization and Productivity in China

Yuyu Chen, Mitsuru Igami, Masayuki Sawada, Mo Xiao, Jan 31, 2018

Privatization has boosted Chinese firms’ productivity, both in the short run and the long run. Consumer-oriented industries saw larger gains than “strategic” (heavily regulated) sectors. Chinese patents and “new product” surveys seem less reliable, because any statistics become useless once they become policy targets.

How did China Move Up the Global Value Chains?

Hiau Looi Kee, Heiwai Tang, Aug 30, 2017

The paper examines China's rising domestic content in exports using firm and customs transaction-level data. China's domestic content in exports increased from 65 percent in 2000 to 70 percent in 2007. The key reason for China’s ascent on global value chains is due to individual processing exporters substituting domestic products for imported materials, induced by the country’s trade and FDI liberalizations.

China’s Shadow Banking Sector: Wealth Management Products and Issuing Banks

Viral V. Acharya, Jun Qian, Zhishu Yang, Aug 09, 2017

The issuance of Wealth Management Products (WMPs) is an important form of shadow banking activities in China, especially after 2011. Viral Acharya, Deputy Governor of the Reserve Bank of India, Prof. Jun “QJ” Qian of Fanhai International School of Finance, Fudan University and Prof. Zhishu Yang of Tsinghua University examine the causes, main players and impacts on the banking system of China’s rising WMPs. They also compare the differences between the U.S. shadow banking sector and its counterpart in China.

Industry/Policy View China’s High Savings: Drivers, Prospects, and Policies

Longmei Zhang, Ding Ding, Hui He, Rui C. Mano, Apr 17, 2019

China’s high national savings rate—one of the highest in the world—is at the heart of its external/internal imbalances. High savings finance elevated investment when held domestically, and lead to external imbalances when they flow abroad. Today, China’s higher savings, compared to the global average, mostly emanate from the household sector, due to demographic...