A Bridge on Economic Issues between China and the World
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Subsidising the Supply Chain: How China’s Industrial Policy Shapes Export Competitiveness
Wenyin Cheng, David Liang, Bo Meng, Hongyong Zhang, May 20, 2026As governments expand industrial subsidies in the name of economic security, debate intensifies over whether such policies distort trade or enhance competitiveness. This column presents new evidence from China showing that subsidies do more than support individual firms – they ripple through domestic supply chains, boosting downstream exports and product quality. Industrial policy, it turns out, travels along value chains.
The Geography of Market Power: Rethinking Consolidation in China’s Steel Industry
Loren Brandt, Feitao Jiang, Yao Luo, Yingjun Su, May 06, 2026China’s steel industry is the world’s largest, but it is also famously fragmented. For years, policymakers have pushed for mergers and acquisitions to consolidate the sector, aiming to boost efficiency and create a handful of national champions.
Pollution in the Rain: Strategic Evasion of Water Pollution Regulations in China
Runhao Zhao, Ye Yuan, Apr 15, 2026Rain dilutes and cleanses surface water—but not always. We document a novel “polluting-in-the-rain” phenomenon: industrial firms strategically time the release of untreated wastewater into waterways during heavy rainfall, exploiting the natural dilution effect to evade water quality regulations that are primarily designed for dry-weather conditions. Such strategic emissions pose a serious threat to local water quality and significantly undermine China’s national pollution abatement efforts.
Industry/Policy View China Subsidy Estimates Depend on an Interest-Rate Yardstick
Yuankun Li, Jul 01, 2026Before subsidy figures are used to justify new trade measures, the benchmark behind below-market borrowing should be made comparable across countries. The central issue is that the OECD/MAGIC treatment makes China's BMB estimate LPR-based, and this can make measured borrowing support several times larger than estimates based on more comparable interbank or government-bond benchmarks.
Expanding Access or Reshaping Markets? Evidence from Public–Private Partnership Health Insurance in China
Hui Ding, Xintong Wang, Xian Xu, May 26, 2026City-customized supplemental medical insurance (CCSMI) is a major insurance expansion initiative in China through public-private partnership. Although it expanded coverage for hundreds of millions of people, it also crowded out private insurance purchases at both the extensive and intensive margins. This suggests that enrollment growth alone overstates the true gains in risk protection, and calls for better PPP design and stronger coordination with existing insurance programs.
