A Bridge on Economic Issues between China and the World
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Outward FDI and Domestic Input Distortions: Evidence from Chinese Firms
Cheng Chen, Wei Tian, Miaojie Yu, Sep 08, 2021A recent study shows that domestic input distortions faced by private firms in China have generated extra incentives for those firms to invest and produce abroad. This finding helps explain an astonishing increase in China’s outward foreign direct investment (FDI) flows since the financial crisis.
High-Speed Rail and China's Electric Vehicle Adoption Miracle
Hanming Fang, Ming Li, Long Wang, Yang Yang, Mar 19, 2025We investigate whether high-speed rail (HSR) connectivity influences electric vehicle (EV) adoption, using a quasi-natural experiment from China’s HSR expansion and several identification strategies. Our findings consistently show that, by alleviating range anxiety, the expansion of HSR can account for up to one third of the increase in EV market share and EV sales in China during our sample period from 2010 to 2023, with effects particularly pronounced in cities served by faster HSR lines. These results suggest that transportation infrastructure can play a complementary role in accelerating the transition to electric mobility.
Excessive Issuance of New Funds in China and Implications for Investor Protection
Shuai Ye, Jinfan Zhang, Kaixuan Zheng, Jun 25, 2025The Chinese mutual fund industry is only one-tenth the size of its US counterpart, but the number of funds in China has surpassed that of the US. Our study shows that such a large number of funds is unhealthy: managers issue new funds repetitively with different custodian banks, resulting in the average manager overseeing 2.7 funds. Managers shift profits to new funds in order to attract more flows. Among funds under the same manager, new funds have higher returns than old funds, spurring concerns over investor protection.
When Industrial Policy Meets Comparative Advantage: Lessons from “Made in China 2025”
Xiuping Hua, Yong Wang, Junjie Xia, Haochen Zhang, Jan 28, 2026In this paper, the authors contribute to this debate through the lens of a novel perspective: the congruence between firm’s factor input structures and local endowment structures.
Structural Change and the Stability of Aggregate Employment in China
Wen Yao, Xiaodong Zhu, Oct 27, 2021In developed countries, aggregate employment has a strong positive correlation with aggregate output, and it is almost as volatile as output. In China, the correlation of aggregate employment and output is close to zero, and the volatility of aggregate employment is very low. We argue that the key to understanding the stability of aggregate employment in China is labor reallocation between the agricultural and non-agricultural sectors, and that the declining relative demand...
