A Bridge on Economic Issues between China and the World
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Overpricing in China’s Corporate Bond Market
Yi Ding, Wei Xiong, Jinfan Zhang, Nov 27, 2019In China’s corporate bond market, the yield spread of newly issued bonds at their first secondary-market trade is on average 5.35 bps higher than the issuance spread. This overpricing is robust across bond issuances with different credit ratings, maturities, issuance types, and issuer status. Evidence suggests that competition among underwriters drives this overpricing through two specific channels—either through rebates to participants in issuance auctions or through direct auction bidding by the underwriters for themselves or their clients.
Can a Housing Boom Lead to Rent Inflation?
Honglin Wang, Fan Yu, Yinggang Zhou, Aug 24, 2018The housing boom and bust cycle has called attention to the volatility of housing prices and its impact on other markets. We challenge the conventional wisdom that housing prices are the present value of future rents and show that housing price uncertainty can affect household property investments, which in turn affect rent. Using data from Hong Kong and mainland China, we find a significant effect of housing price on rent and draw important implications for monetary and macro-prudential policies.
The Long-term Persistence of Informal Finance in China
Jinyan Hu, Chicheng Ma, Bo Zhang, Jan 24, 2018By using data on 137 counties in north China, we find that the density of financial institutions (Qianzhuang and Diandang) in the late Qing period has a significant positive effect on the number and total assets of small loan companies, a dominant institution of informal finance today. The persistent effect of historical financial institutions can be explained by Confucian culture, which instills integrity, lineage solidarity and acquaintance networks.
QR Code-Based Mobile Payments and Financial Inclusion
Thorsten Beck, Leonardo Gambacorta, Yiping Huang, Zhenhua Li, Han Qiu, Nov 09, 2022By means of a unique dataset of around half a million Chinese firms, we investigate the link between the use of a QR code-based mobile payment system and financial inclusion.
Household Finance in China
Russell Cooper, Guozhong Zhu, Sep 20, 2017We study household financial choices in China and compare them with those in the US. We estimate a structural model where the two countries differ in terms of preferences and institutional arrangements. In the structural estimation, we take into account the effects of important structural changes in the Chinese economy between 1990-2000.
