A Bridge on Economic Issues between China and the World
Facebook 
Twitter 
Instagram
WeChat 
Email Most Popular
Credit Constraints and Fraud Victimization: Evidence from a Representative Chinese Household Survey
Nan Gao, Yuanyuan Ma, Lixin Colin Xu, Jun 09, 2021How and why do household credit constraints affect fraud victimization when households face fraud schemes? Using the urban sample of a novel nationally representative data set on fraud victimization and household finance, we find that households facing credit constraints are associated with a higher probability of becoming fraud victims and suffer from higher economic losses from frauds than households...
Drive Down the Cost: Learning by Doing and Government Policies in the Global EV Battery Industry
Panle Jia Barwick, Hyuk-soo Kwon, Shanjun Li, Nahim Bin Zahur, Apr 16, 2025Electric vehicle (EV) battery costs have fallen over 90% in the last decade. This study examines how learning-by-doing (LBD) drives this decline and interacts with government policies such as consumer EV subsidies and local content requirements. Leveraging rich data on EV models and battery suppliers from 13 countries with largest EV sales that account for 95% of global EV sales, we develop a structural model of the EV industry that incorporates consumer choices and pricing strategies by EV producers and battery suppliers....
Monetary Policy in China: A Trade-Off Between Transmission and Stability?
Kaiji Chen, Yiqing Xiao, Tao Zha, Sep 24, 2025We explore how China’s shift toward interest-rate-based monetary policy faces an inherent trade-off. When non-state banks turn to wholesale funding, monetary policy easing is transmitted more effectively to productive firms, but the banking system also becomes more fragile in economic downturns. Our findings suggest that China’s regulators must strike a careful balance between achieving policy effectiveness and safeguarding financial stability.
Has COVID-19 permanently changed the nature of economic shocks on the Chinese economy?
Kaiji Chen, Patrick Higgins, Tao Zha, Apr 10, 2024In latest study, Kaiji Chen and his colleagues at Emory University investigated the impact of COVID-19 on the Chinese economy. Through the construction of a GDP expenditure dataset and the application of SVAR modeling, they found that the constrained consumption shock during the pandemic significantly affected China's economy and may potentially alter its economic shock nature permanently.
Overpricing in Municipal Bond Markets and the Unintended Consequences of Regulatory Measures: Evidence from China
Laura Xiaolei Liu, Qiao Liu, Xiaoyu Liu, Ni Zhu, Dec 03, 2024Chinese municipal bonds are considerably overpriced in the primary market, leading regulators to set a lower bound on the issuance yield spread. This paper investigates the underlying reasons for this overpricing and evaluates the effects of implementing restrictions on yield spreads. Our findings indicate that underwriters may inflate prices to receive undisclosed benefits from local governments, such as local treasury cash deposits. We further show that the lower bounds severely impede price discovery in the primary municipal bond market. Even bonds not restricted by the lower limit are priced at the reference spread, exacerbating overpricing of riskier bonds. Local governments exploit these fixed prices by increasing the bond issuance amount and extending bond maturity. Our findings suggest that regulatory interference in pricing can have unintended consequences for pricing efficiency and that attempts to rectify mispricing may result in even more severe mispricing.
