Latest

Rural Property Rights and Agricultural Productivity

A. V. Chari, Elaine M. Liu, Shing-Yi Wang, Yongxiang Wang, Jan 17, 2018

The Rural Land Contracting Law (RLCL), announced in 2003, is a landmark law for agricultural households in rural China. It provides new legal protections for leasing agricultural land. In theory, increasing free market exchanges of land should improve agricultural productivity by facilitating the movement of land towards the most productive users. We find that the property rights reform led to a 10 percent increase in land rental activity among rural households, a redistribution of land towards more productive farmers, and a 7 percent increase in the aggregate productivity of land. We also observe an increased responsiveness of land allocation across crops to changes in crop prices.

Selective Default by Local Governments in China

Haoyu Gao, Hong Ru, Dragon Yongjun Tang, Jan 10, 2018

We identify bank loans to China’s local government financing vehicles and find that 1.7% of the loans that matured during the sample period failed to make the due payments. The LGFV loan default rate is much higher for commercial banks than for the China Development Bank, which provides more comprehensive financing for local governments than typical commercial banks. This selective default pattern is weaker during the ¥4-trillion stimulus period but stronger after 2010 when commercial banks exited the LGFV market.

Unequal School Enrollment Rights and Increased Inequality: The Case of Shanghai

Muyang Zhang, Jie Chen, Jan 03, 2018

In Shanghai, housing entitlements with enrollment access to a good public primary school is associated with a 0.1-0.35 percentage point lower annual rental yield. This rental yield gap is the opportunity cost of securing such housing, which is within the affordability range of most middle-income families in Shanghai. This implies that, should there be no credit constraint for homeownership, children from middle-income families should have a higher likelihood of accessing better public education. We find, however, that the enrollment rights between homeowners and renters, together with the credit constraint to own a home, actually lowers the chance of children from middle-income families of attending better public schools relative to those children from families with high initial wealth. This resulting reduced intergeneration mobility exacerbates the social inequality in China.

Trade Liberalization and the Performance of China’s Manufacturing Sector

Loren Brandt, Johannes Van Biesebroeck, Luhang Wang, Yifan Zhang, Dec 27, 2017

China’s entry into WTO resulted in a significant reduction in tariffs on imported manufactured goods into China. We examine the effects of market liberalization on firm and industry performance. Tariff cuts on outputs and intermediates had highly complementary effects on productivity, and explain in upwards of forty per cent of the productivity gains between 1998-2007. The effects on mark-ups were largely offsetting, however lower tariffs on inputs helped to provide additional resources for productivity-enhancing investments.

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Healthy Life Expectancy in China

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Ambrogio Cesa-Bianchi, Andrea Ferrero, Alessandro Rebucci, Nov 29, 2017 

China Caught in the “Middle-Income Trap”?

Linda Glawe, Helmut Wagner, Nov 22, 2017 

The “Trusted-assistant” Loan in Nineteenth Century China

Meng Miao, Guanjie Niu, Thomas Noe, Nov 08, 2017 

Daily Price Limits and the Magnet Effect

Ting Chen, Zhenyu Gao, Jibao He, Wenxi Jiang, Wei Xiong, Oct 25, 2017