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The Effects of a Multifaceted Poverty-Alleviation Program on Rural Income and Household Behavior in China
Rui Li, Hong Song, Jun Zhang, Junsen Zhang, Feb 12, 2025This study examines the effects of a government-led, large-scale, multifaceted poverty-alleviation program on rural income in China. We find that the program has a positive impact on national key poor counties, with a 10.9% increase in rural income. This effect mainly arises via industrial support, agricultural development, and public service improvement. Strategies that are consistent with local comparative advantages and incentivize local officials to reduce poverty yield more significant effects. Household-level analyses suggest that the program changes household income and expenditure, and the effects are particularly substantial for the poorest households. The study provides novel insights and policy implications for China’s recent experience with poverty alleviation.
Internationalizing Like China
Chris Clayton, Amanda Dos Santos, Matteo Maggiori, Jesse Schreger, Feb 08, 2023China’s strategy for internationalizing the renminbi involves controlling the access of foreign investors to the domestic bond market.
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.
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.
Government as Venture Capitalists in AI
Martin Beraja, Wenwei Peng, David Yang, Noam Yuchtman, Nov 06, 2024This article discusses that government venture capital funds in China are more geographically dispersed than private venture capital, particularly in inland and less developed areas, and they are more inclined to invest in AI companies with weaker ex-ante productivity signals.
