A Bridge on Economic Issues between China and the World
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Pushing on a String: State-Owned Enterprises and Monetary Policy Transmission in China
Peter Tillmann, Hongyi Chen, Apr 18, 2018In China, a large share of enterprises is state-owned and has preferential access to finances. This should affect the way the economy responds to changes in monetary policy. We find that a policy easing is more effective than a policy tightening – which is consistent with the PBC being able to “push on a string”.
Innovation versus imitation: Where all that Chinese R&D is going
Michael König, Zheng (Michael) Song, Kjetil Storesletten, Fabrizio Zilibotti, Jan 26, 2022China is aiming to become a technological innovation powerhouse by 2050, with Premier Li Keqiang recently announcing an increase in R&D investments by 7% for the next five years. But greater R&D investment is no guarantee of success. This column examines the effects of R&D investments by Chinese firms on aggregate productivity and growth.
Unequal School Enrollment Rights and Increased Inequality: The Case of Shanghai
Muyang Zhang, Jie Chen, Jan 03, 2018In Shanghai, housing entitlements with enrollment access to a good public primary school is associated with a 0.1-0.35 percentage point lower annual rental yield. This rental yield gap is the opportunity cost of securing such housing, which is within the affordability range of most middle-income families in Shanghai. This implies that, should there be no credit constraint for homeownership, children from middle-income families should have a higher likelihood of accessing better public education. We find, however, that the enrollment rights between homeowners and renters, together with the credit constraint to own a home, actually lowers the chance of children from middle-income families of attending better public schools relative to those children from families with high initial wealth. This resulting reduced intergeneration mobility exacerbates the social inequality in China.
Trade Policy Uncertainty and Firm Innovation
Qing Liu, Hong Ma, May 12, 2021This study proposes a novel channel through which trade liberalization may induce innovation through the reduction of trade policy uncertainties (TPU) in destination markets. To verify this link, we utilize the significant reduction of TPU engendered by China's accession to the World Trade Organization (WTO) in 2001 as a quasi-natural experiment. We find that reduction in TPU significantly encourages firms' patent applications and that firms' innovation responses to TPU reduction vary by productivity, ownership, exporting status, and the irreversibility of investment.
Does Import Competition Harm Innovation? Evidence from Firm-level Data in China
Qing Liu, Ruosi Lu, Yi Lu, Tuan Anh Luong, Oct 06, 2021Twenty years ago, China’s entering the World Trade Organization (WTO) was a catalyst for its economic development and propelled China into becoming one of the most important economies in the world. But massive import tariff reductions allowed more import competition, which raised concerns that innovation would be curbed. Tuan Luong, from De Montfort University, and his co-authors, Qing Liu, Ruosi Lu, and Yi Lu, discuss the impacts of import competition on domestic innovation...
