A Bridge on Economic Issues between China and the World
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Beyond the Fundamentals: How Media-Driven Narratives Influence Cross-Border Capital Flows
Isha Agarwal, Wentong Chen, Eswar Prasad, Apr 02, 2025We provide the first empirical evidence on how media-driven narratives influence cross-border institutional investment flows. Applying natural language processing techniques to 1.5 million newspaper articles, we document substantial cross-country variation in sentiment and risk indices constructed from domestic media narratives about China in 15 countries. These narratives significantly affect portfolio flows, even after controlling for macroeconomic and financial fundamentals. This impact is smaller for investors with greater familiarity or private information about China and larger during periods of heightened uncertainty. Political and environmental narratives are as influential as economic narratives. Investors react more sharply to negative narratives than positive ones.
Industrial Policy and Retaliatory Protection under the WTO:Lessons from China
Yusheng Feng, Haishi Li, Siwei Wang, Min Zhu, Aug 13, 2025Industrial policy is increasingly implemented worldwide, with many policymakers and researchers highlighting its benefits (Juhász et al. 2024). However, the cost of industrial policy remains less understood. Using Chinese firm-level data, we show that higher industrial subsidies raise the likelihood and severity of foreign anti-dumping and countervailing duties at each investigation stage (Feng et al. 2025). These retaliatory tariffs wipe out roughly a quarter of the firm revenue growth the subsidies would otherwise create. Neglecting this channel may lead governments to overstate the net benefits of industrial policy and fuels deeper trade frictions and geoeconomic fragmentation.
Ray of Hope? The Rise of Solar Energy in China
Ignacio Banares-Sanchez, Robin Burgess, Dávid László, Pol Simpson, John Van Reenen, Yifan Wang, Mar 25, 2026China’s solar subsidies triggered innovation and learning-by-doing that dramatically lowered global solar costs while generating domestic economic gains large enough to outweigh the subsidy costs, showing that green industrial policy can simultaneously boost growth and help fight climate change.
Rural-Urban Migration and Market Integration
Dennis Egger, Benjamin Faber, Ming Li, Wei Lin, Nov 19, 2025Reductions in rural-to-urban migration barriers have led to economic gains for both rural origins and urban destinations by reducing information frictions and facilitating the flow of goods and investments between cities and the countryside.
Early Childhood Exposure to Health Insurance and Adolescent Outcomes: Evidence from Rural China
Wei Huang, Hong Liu, Jul 19, 2023We examine the impact of early-life exposure to public health insurance, the New Cooperative Medical Scheme (NCMS), on outcomes in adolescence in rural China.
