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Decoding China’s Industrial Policies
Hanming Fang, Ming Li, Guangli Lu, Jul 02, 2025Industrial policy is often discussed through high-level narratives and flagship initiatives, yet its implementation—particularly at the subnational level—remains opaque. We leverage large language models (LLMs) to systematically analyze over three million government documents from 2000 to 2022, extracting structured policy information to decode China’s industrial policy at various levels of government. Combining these newly constructed granular industrial policy data with micro-level firm data, we document four sets of facts on China’s industrial policies, including the economic and political rationality of the choice of the target sectors, the dynamics of the policy tools, the diffusion and similarity of policies, and the effects on firm entry and productivity.
Brain Drain to the State Sector: Job Preferences and Outcomes for China’s College Graduates
Hongbin Li, Lingsheng Meng, Yanyan Xiong, Sinclair Cook, Feb 28, 2024Despite private enterprises dominating China’s labor market, college-educated workers are still highly concentrated in the state sector. Using data from the Chinese College Student Survey, we find that 64% of students in the sample expressed a strong preference for state-sector employment.
The Real Effects of the Chinese Stock Market
Itay Goldstein, Bibo Liu, Liyan Yang, Sep 29, 2021In a 2019 survey jointly administered by the China Securities Regulatory Commission (CSRC) and the PBC School of Finance at Tsinghua University (Tsinghua PBCSF), more than 90% of Chinese public firms report that they closely monitor the stock market for the purposes of learning information to guide real investment decisions and of accessing external financing. These findings provide direct evidence for the wide existence of market feedback via a learning channel and a financing channel, suggesting that the Chinese stock market is not just a side show, but instead, affects the real economy.
The Unintended Consequences of Regulation: Evidence from China’s Interbank Market
Xian Gu, Lu Yun, Jun 12, 2019Financial regulation can have unanticipated consequences in the financial system. The evidence from China’s interbank market shows that banks tend to use newly introduced and lightly regulated financial instruments to get around regulation during their search for funds. Banks facing greater competition or higher liquidity shortages have more incentives to engage in such activities. Such interbank activities are closely associated with banks’ proprietary trading, suggesting the potential risk of financial contagion.
The COVID-19 Pandemic and Job Creation: The Role of Global Supply Chains
Hanming Fang, Chunmian Ge, Hanwei Huang, Hongbin Li, Dec 30, 2020Using big data of more than 100 million posted jobs from China, we estimate how the COVID-19 pandemic affected local labor demand in China via global supply chains. The data reveal that the number of newly posted jobs was about 31% lower in the first 14 weeks after the Wuhan lockdown than comparable periods in 2018 and 2019. We show that COVID-19 cases abroad and foreign governments’ pandemic-control policies reduced new job creation in China by 11.7%...
