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The Chinese Saving Rate: Long-Term Care Risks, Family Insurance, and Demographics
Ayşe İmrohoroğlu, Kai Zhao, Sep 13, 2017In 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.
The Impact of the China Tire Safeguard
Sunghoon Chung, Joonhyung Lee, Oct 23, 2019This column evaluates the impact of the China tire safeguard on the US tire industry. Contrary to claims made by the US government, we find that total employment and average wages in the tire industry were unaffected by the safeguard. This result is not surprising as we find that Chinese tires have been completely diverted to other exporting countries due to the strong presence of multinational corporations in the world tire market. On the other hand, US domestic tire prices increased by up to 10% during the safeguard period...
China’s Impact on Global Financial Markets
Isha Agarwal, Grace Weishi Gu, Eswar Prasad, Dec 18, 2019China has been shifting the composition of its external assets from accumulation of foreign reserves toward private, nonofficial outflows. This article provides an overview of the allocation patterns of outward equity investment by Chinese institutional investors (IIs) across destination countries and sectors. In their foreign portfolios, Chinese IIs overweight sectors in which China has a comparative disadvantage (for instance, computer software), and they concentrate...
The Signaling Effect of Offshore Debt Issuance on China’s Domestic Market
Qing Ba, Frank M. Song, Dec 13, 2017Dr. Qing Ba from Hong Kong Exchanges and Professor Frank M. Song from the University of Hong Kong discuss the role of offshore debt issuance in the improvement of Chinese issuers’ creditability and transparency. China has the third largest bond market in the world. However, the absence of an accurate local rating and pricing system deepen the risks in domestic debt sectors. Our recent research finds that after Chinese corporates issue bonds in the offshore market, thus binding themselves to stricter market discipline and information disclosure requirements, the rating and disclosed information from offshore issuance may be of a greater reference value in the assessment of Chinese corporates’ credibility. This in turn leads to a signaling effect on their subsequent domestic debt financing. In addition to providing cheap funding, offshore debt issuance could bring about improvements in the creditability and transparency of Chinese issuers. This is of critical importance in pricing China’s credit risk and enhancing the soundness of China’s bond market.
Serial Entrepreneurship in China
Loren Brandt, Ruochen Dai, Gueorgui Kambourov, Kjetil Storesletten, Xiaobo Zhang, Jul 06, 2022New firms have been an important engine of growth in the Chinese economy (Brandt, Van Biesebroeck, and Zhang 2012). Drawing on data on the universe of all firms in China, we study entrepreneurship and the creation of new firms in China through the lens of entrepreneurs who operate a series of firms over their lifetime, i.e., serial entrepreneurs (SE).
