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.
The Economic Toll of China’s Tutoring Ban
Zibin Huang, Yinan Liu, Mingming Ma, Leo Yang Yang, Aug 27, 2025China's 2021 “Double Reduction'' policy, which banned for-profit K12 academic tutoring, triggered an abrupt contraction in the education-services labor market. Using real-time job-posting and firm-registration data, we estimate over three million job openings lost in four months and at least 11 billion RMB in value-added tax (VAT) revenue losses within 18 months, alongside unintended negative spillovers to untargeted arts and sports training.
Chinese Corporate Credit Ratings: Comparing Global and Domestic Agencies
Xianfeng Jiang, Frank Packer, Dec 06, 2017When comparing the credit ratings of domestic and global agencies on Chinese corporations, because of the differences in ratings scales, it is best to focus on the domestic and global agency orderings of relative credit risk. Testing for differences in the determinants of ratings, we find that asset size is weighed more heavily as a positive factor by domestic agencies, while profitability and state-ownership are weighed more positively by global rating agencies, which also weigh leverage more heavily as a negative factor. In spite of these differences, both domestic and global ratings appear to be priced into the market values of rated bonds.
