This Week

Credit Expansion and Allocation Dynamics under Economic Stimulus

Lin William Cong, Jacopo Ponticelli, Sep 13, 2017

We study credit allocation across firms and its real effects during China’s economic stimulus plan of 2009-2010 using loan-level data from the 19 largest Chinese banks matched with firm-level data on manufacturing firms. We find that the stimulus-driven credit expansion significantly affected firm borrowing, investment, and employment. The plan disproportionately favored state-owned firms and firms with a lower marginal product of capital, reversing the process of capital reallocation that characterized China’s high growth before 2008.

The Chinese Saving Rate: Long-Term Care Risks, Family Insurance, and Demographics

Ayşe İmrohoroğlu, Kai Zhao, Sep 13, 2017

In this paper, we show that a general equilibrium model that properly captures the risks in old age, the role of family insurance, changes in demographics, and the productivity growth rate is capable of generating changes in the national saving rate in China that mimic the data well. Our findings suggest that the combination of the risks faced by the elderly and the deterioration of family insurance due to the one-child policy may account for approximately half of the increase in the saving rate between 1980 and 2010. We also show that changes in total factor productivity growth account for the fluctuations in the saving rate during this period.

Recent

Resolving China’s Corporate Debt Problem

Wojciech S. Maliszewski, Serkan Arslanalp, John Caparusso, José Garrido, Si Guo, Joong Shik Kang, W. Raphael Lam, T. Daniel Law, Wei Liao, Nadia Rendak, Philippe Wingender, Jiangyan Yu, Longmei Zhang, Sep 06, 2017 

Are the Most Aggressive Investors in China Actually Informed?

Christian T. Lundblad, Zhishu Yang, Qi Zhang, Aug 30, 2017 

How did China Move Up the Global Value Chains?

Hiau Looi Kee, Heiwai Tang, Aug 30, 2017 

Air Pollution, Health Spending and Willingness to Pay for Clean Air in China

Shanjun Li, Deyu Rao, Nahim Bin Zahur, Panle Jia Barwick, Aug 23, 2017 

Notching R&D Investment with Corporate Income Tax Cuts in China

Zhao Chen, Zhikuo Liu, Juan Carlos Suárez Serrato, Daniel Yi Xu, Aug 16, 2017 

The Two-Pillar Policy for the RMB from December 2015 to May 2017

Urban J. Jermann, Bin Wei, Vivian Zhanwei Yue, Aug 16, 2017 

China’s Shadow Banking Sector: Wealth Management Products and Issuing Banks

Viral V. Acharya, Jun Qian, Zhishu Yang, Aug 09, 2017