A Bridge on Economic Issues between China and the World
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Input Trade Liberalization and Firm Labor Market Power in China
Illenin O. Kondo, Yao Amber Li, Wei Qian, Jul 30, 2025More trade, more jobs? Or fewer? China’s accession to the WTO has catalyzed a rich research agenda on the labor market consequences of trade liberalization. Departing from the assumptions of perfectly competitive labor markets, we ask whether Chinese firms exercised more or less labor market power when input tariffs fell with China’s WTO accession? We show that input trade liberalization reduced labor monopsony power in China, especially for skill-intensive firms and in markets with more labor supply growth.
Do Chinese Cultures Spawn Family Businesses
Joseph P. H. Fan, Qiankun Gu, Joyce Xin Yu, Jun 18, 2025Using a sample of Chinese private-sector firms that went public, we find that founders from the country’s regions with stronger collectivist cultures engage more family members as managers, retain more firm ownership within the family, and share the controlling ownership with more family members. Our study suggests that the collectivist culture boosts the formation of family businesses because the collectivist culture reduces information asymmetry, shirking problems, and associated monitoring costs among family members.
A New Method for Estimating Product-Level Emission Intensities and Implications for EU’s Carbon Border Adjustment Mechanism
Ohyun Kwon, Hao Zhao, Min Qiang Zhao, May 14, 2025We develop a new method for estimating product-level emission intensities (PLEI) by combining firm-level emissions with firm-product output data. This methodological innovation produces highly granular emission measures that are essential for both academic research and climate policy design. Applying the method to Chinese manufacturing data, we uncover stark heterogeneity: the top 10% of emission-intensive products account for 75% of emissions but only 4% of exports. We incorporate our PLEI estimates into a general equilibrium trade model to assess the EU’s Carbon Border Adjustment Mechanism (CBAM). Our simulations demonstrate that, at the same carbon price, product-level CBAM achieves substantially greater emissions reductions than sector-level CBAM, while causing markedly less trade disruption. These results underscore the importance of product-level emission intensity data in designing targeted and cost-effective climate policies.
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.
Integrating Jurisdictions, Dividing Workers: Consolidation, Labor Markets, and the Migrant-Local Wage Gap in China
Shiyu Bo, Yi Wang, Dec 24, 2025We examine how China’s recent wave of city-county mergers reshaped local labor markets. Using individual-level data from the China Migrants Dynamic Survey and a staggered difference-in-differences approach, we find that the reform boosted wages by strengthening local economies and improving governance...
