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Decoding China’s Industrial Policies
Hanming Fang, Ming Li, Guangli Lu, Jul 02, 2025Industrial policy is often discussed through high-level narratives and flagship initiatives, yet its implementation—particularly at the subnational level—remains opaque. We leverage large language models (LLMs) to systematically analyze over three million government documents from 2000 to 2022, extracting structured policy information to decode China’s industrial policy at various levels of government. Combining these newly constructed granular industrial policy data with micro-level firm data, we document four sets of facts on China’s industrial policies, including the economic and political rationality of the choice of the target sectors, the dynamics of the policy tools, the diffusion and similarity of policies, and the effects on firm entry and productivity.
The Cost of China’s IPO Regulations on the Functional Efficiency of its Financial System
Charles M. C. Lee, Yuanyu Qu, Tao Shen, Nov 01, 2017In sharp contrast with the market-and-disclosure based system in the US, IPOs in China are subject to strict regulatory rationing and control. We investigate the pricing implications of China’s IPO regulations for its publicly listed companies. We find that these regulations will give rise to significant market frictions with economic consequences for the prices, returns, and even investment decisions of China’s publicly listed companies.
Brain Drain to the State Sector: Job Preferences and Outcomes for China’s College Graduates
Hongbin Li, Lingsheng Meng, Yanyan Xiong, Sinclair Cook, Feb 28, 2024Despite private enterprises dominating China’s labor market, college-educated workers are still highly concentrated in the state sector. Using data from the Chinese College Student Survey, we find that 64% of students in the sample expressed a strong preference for state-sector employment.
The Impact of Rapid Aging and Pension Reform on Savings and the Labor Supply: the Case of China
Hui He, Lei Ning, Dongming Zhu, Jun 26, 2019Individuals can use savings and labor supply to self-insure against uncertainties over their life cycle, such as idiosyncratic income shocks and changes in longevity and pension benefits. Using China as a case study, we investigate, both empirically and quantitatively, the impact of rapid aging and pension reform on savings and the labor supply, and the roles...
Do Interest Rates Play a Major Role in Monetary Policy Transmission in China?
Gunes Kamber, Madhusudan Mohanty, Aug 17, 2018We explore the role of interest rates in monetary policy transmission in China in the context of its multiple instrument setting. In doing so, we construct a new series of monetary policy surprises using information from high frequency Chinese financial market data around major monetary policy announcements. We find that a contractionary monetary policy surprise increases interest rates and significantly reduces inflation and economic activity. Our findings provide further support to recent studies suggesting that monetary policy transmission in China has become increasingly similar to that in advanced economies.
