A Bridge on Economic Issues between China and the World
Facebook 
Twitter 
Instagram
WeChat 
Email Most Popular
Interest rates and exchange rates when the money supply goes up
Saleem Bahaj, Ricardo Reis, May 21, 2025The power of monetary policy to affect interest rates and exchange rates depends on the downward slope of the demand function. This column uses the Chinese experiment with parallel currencies to study the impact of sudden increases in money supply. The authors find causal evidence that increases in money supply lead to currency depreciations, and use this to quantify the interest elasticity of reserve demand. The results can be used to understand how the People’s Bank of China maintained the peg between the mainland and parallel currencies.
What Gets Measured Gets Managed: Investment and the Cost of Capital
Zhiguo He, Guanmin Liao, Baolian Wang, Aug 09, 2023To improve capital allocative efficiency, starting in 2010, Chinese regulators switched from using return on equity to economic value added (EVA).
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.
Empowering through Courts: Judicial Centralization and Municipal Financing in China
Jiayin Hu, Wenwei Peng, Yang Su, Aug 28, 2024This article discusses that the judicial centralization reform gradually implemented in China since 2014 has enhanced the independence of the judicial system, limited the intervention of local governments, and reduced court biases in favor of local governments.
The Effect of the China Connect
Chang Ma, John Rogers, Sili Zhou, Aug 07, 2024This article discusses that The China Connect not only introduced new learning channels by improving market efficiency, but also increased domestic firms' sensitivity to global shocks and revealed the policy trade-offs between efficiency and volatility in liberalization.
