A Bridge on Economic Issues between China and the World
Facebook 
Twitter 
Instagram
WeChat 
Email Most Popular
The Value of Big Data in a Pandemic
Kairong Xiao, May 05, 2021This article summarizes a study of the economic and public health effects of the Health Code app in China. By exploiting the staggered implementation of this technology across 322 Chinese cities, this study finds that the Health Code app significantly reduced virus transmission and facilitated economic recovery during the COVID-19 pandemic. A macroeconomic susceptible-infectious-recovered (SIR) model calibrated to the micro-level estimates shows...
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.
Bond for Employment: Evidence from China
Yi Huang, Shu Lin, Haichun Ye, Feb 15, 2023Using the unique institutional feature of government regulations in China, we provide robust evidence that firms with a larger employment size have significantly better access to bond credit.
Good Finance, Bad Finance, and Resource Misallocation: Evidence from China
Jiapin Deng, Qiao Liu, Apr 03, 2024The development of finance driven by Chinese local governments exacerbates the problem of resource misallocation, whereas market-driven finance significantly improves allocative efficiency. This highlights the policy implication that modern finance in China should prioritize the efficient utilization of resources rather than mere expansion in scale.
Financial Reporting and Disclosure Practices in China
Hai Lu, Jee-Eun Shin, Mingyue Zhang, Jul 04, 2024This article discussing that Chinese firms tend to emphasize the stability of financial performance in their reports. In contrast to U.S. firms, their financial disclosures are significantly swayed by non-shareholder stakeholders and do not leverage voluntary disclosures to mitigate capital costs.
