A Bridge on Economic Issues between China and the World
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The 2009 Monetary Stimulus in China
Kaiji Chen, Patrick Higgins, Daniel F. Waggoner, Tao Zha, Mar 21, 2018Massive monetary injections occurred in 2009Q1-Q4 as a result of a drastic change in monetary policy causing an unprecedented credit expansion in 2009-2011, which stimulated economic growth in the short-run. New credit was disproportionately allocated to real estate and its supporting heavy industries and fueled a sharp rise in land prices. The long-lasting consequence of this monetary stimulus resulted in a twin problem facing China: the high investment-to-GDP and debt-to-GDP ratios.
Black Markets for License Plates in Chinese Megacities
Oystein Daljord, Mandy Hu, Guillaume Pouliot, Junji Xiao, Jan 29, 2020Chinese megacities ration new car sales by capping the number of license plates they issue that permit driving within city limits. Concerns regarding the fairness of this policy have led city governments to use lotteries to allocate either all or a share of the license plates. Lotteries create gains from trade that have stimulated black markets for license plates in such cities...
Peak China Housing?
Kenneth Rogoff, Yuanchen Yang, Sep 16, 2020China’s real estate market has been a key engine of its sustained economic expansion. This paper argues, however, that even before the COVID-19 shock, a decades-long housing boom had given rise to price misalignments and regional supply-demand mismatches, making an adjustment both necessary and inevitable. Based on input-output analysis and benchmarking against other economies, we estimate the size of China’s real estate–related activities to be 29% of the economy and conclude that the sector is quite vulnerable to a sustained aggregate growth shock.
Industry/Policy View The US-China Trade War Is Based on Misleading Statistics
Zhiwei Zhang, Yi Xiong, Xinyu Ji, Jul 11, 2018General Motors and Apple sold more cars and iPhones in China than in the US, but their sales were not counted as US exports to China, as these were made and sold in China. Policymakers should look at both trade and local sales by foreign firms (the FDI channel) to gauge bilateral economic balance. We estimate that US firms sold more goods and services to China than Chinese firms sold to the US in 2017, once the FDI channel is taken into account.
How Do Family Planning Policies Reshape the Life of the Chinese Elderly?
Yi Chen, Hanming Fang, Sep 12, 2018In our recent work (Chen and Fang, 2018), we evaluate the long-term consequences of China’s family planning policies on the quality of life of the Chinese elderly. We identify the causal impact by exploiting the provincial heterogeneity in implementing the “Later, Longer, Fewer” policies in the early 1970s. We estimate the causal effect on a set of outcomes, including support from children, consumption, and physical and mental health. We find that family planning has either no effect or a slightly positive effect on elderly parents’ physical health status; however, parents who are more exposed to family planning policies report significantly worse mental health.
