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The Economic Toll of China’s Tutoring Ban Zibin Huang, Yinan Liu, Mingming Ma, Leo Yang Yang, Aug 27, 2025 China's 2021 “Double Reduction'' policy, which banned for-profit K12 academic tutoring, triggered an abrupt contraction in the education-services labor market. Using real-time job-posting and firm-registration data, we estimate over three million job openings lost in four months and at least 11 billion RMB in value-added tax (VAT) revenue losses within 18 months, alongside unintended negative spillovers to untargeted arts and sports training.
Investor Memory and Biased Beliefs: Evidence from the Field Zhengyang Jiang, Hongqi Liu, Cameron Peng, Hongjun Yan, Aug 20, 2025 We explore how investor memory drives belief formation and trading behavior, fueling financial market volatility. Drawing on surveys of over 17,000 Chinese retail investors linked to trading records, our study finds that recollections of past returns—shaped by both salient market events in the past and current market conditions—strongly influence expectations of future returns and investors’ portfolio choices, often outweighing objective historical data. These findings suggest that memory-driven biases amplify boom-and-bust cycles, with policy implications for improving market stability by counteracting distorted recall.
Industrial Policy and Retaliatory Protection under the WTO:Lessons from China Yusheng Feng, Haishi Li, Siwei Wang, Min Zhu, Aug 13, 2025 Industrial policy is increasingly implemented worldwide, with many policymakers and researchers highlighting its benefits (Juhász et al. 2024). However, the cost of industrial policy remains less understood. Using Chinese firm-level data, we show that higher industrial subsidies raise the likelihood and severity of foreign anti-dumping and countervailing duties at each investigation stage (Feng et al. 2025). These retaliatory tariffs wipe out roughly a quarter of the firm revenue growth the subsidies would otherwise create. Neglecting this channel may lead governments to overstate the net benefits of industrial policy and fuels deeper trade frictions and geoeconomic fragmentation.
Will robots replace workers? Lessons from China Osea Giuntella, Yi Lu, Tianyi Wang, Aug 06, 2025 Robot adoption has skyrocketed in China in the last decade. New research finds that this exposure has led to a decline in employment and wages, influencing workers’ training and retirement decisions. How can developing countries prepare themselves for the artificial intelligence revolution?
Input Trade Liberalization and Firm Labor Market Power in China Illenin O. Kondo, Yao Amber Li, Wei Qian, Jul 30, 2025 More trade, more jobs? Or fewer? China’s accession to the WTO has catalyzed a rich research agenda on the labor market consequences of trade liberalization. Departing from the assumptions of perfectly competitive labor markets, we ask whether Chinese firms exercised more or less labor market power when input tariffs fell with China’s WTO accession? We show that input trade liberalization reduced labor monopsony power in China, especially for skill-intensive firms and in markets with more labor supply growth.
Decoupling of Incomes and CO₂ Emissions in China and the US Chuanzhi Huo, Angqi Li, Prakash Loungani, Jul 23, 2025 Johns Hopkins University. (The views expressed are those of the authors and should not be attributed to Johns Hopkins University.)
Sowing Seeds of Mobility: The Uneven Impact of Land Reform Ting Chen, Jiajia Gu, Rachel Ngai, Jin Wang, Jul 16, 2025 Land market frictions due to incomplete property rights are a major form of mobility barrier in many developing countries, where rural households risk losing land if they stop cultivating it. This implicit barrier is made explicit through China’s Hukou system. Using two land reforms that reduce these barriers, we construct a novel county-level reform index and argue that these reforms have contributed to improvement in agricultural productivity and have uneven impact across gender. They improve rural women’s transition to non-agriculture relative to rural men, but at the same time, increasing gender gap among the urban population.
Omnia Juncta in Uno: Foreign Powers and Trademark Protection in Shanghai’s Concession Era Laura Alfaro, Cathy Ge Bao, Maggie X. Chen, Junjie Hong, Claudia Steinwender, Jul 09, 2025 Trademarks, which identify the source of goods and services, account for the majority of intellectual property filings worldwide. We investigate how firms adapt to the introduction of trademark institutions by exploring a historical precedent: China’s trademark law of 1923, an unanticipated and disapproved response to end foreign privileges in China.
Decoding China’s Industrial Policies Hanming Fang, Ming Li, Guangli Lu, Jul 02, 2025 Industrial 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.
Excessive Issuance of New Funds in China and Implications for Investor Protection Shuai Ye, Jinfan Zhang, Kaixuan Zheng, Jun 25, 2025 The Chinese mutual fund industry is only one-tenth the size of its US counterpart, but the number of funds in China has surpassed that of the US. Our study shows that such a large number of funds is unhealthy: managers issue new funds repetitively with different custodian banks, resulting in the average manager overseeing 2.7 funds. Managers shift profits to new funds in order to attract more flows. Among funds under the same manager, new funds have higher returns than old funds, spurring concerns over investor protection.
Recent
How Liberalizing Trade with China Led to a Boom in International Students in the US Gaurav Khanna, Kevin Shih, Ariel Weinberger, Mingzhi Xu, Miaojie Yu, Aug 16, 2023 Focusing on China’s accession to the World Trade Organization, we show that Chinese cities with more exposure to trade liberalization sent more students to US universities.
Regional Variation of GDP per Head within China, 1080–1850: Implications for the Great Divergence Debate Stephen Broadberry, Hanhui Guan, Sep 28, 2022 We provide the first regional breakdown of GDP per head for China from the Song dynasty to the Qing, so that regions of similar size can be compared between Europe and Asia to establish the timing of the Great Divergence of living standards.
Combating Cross-Border Externalities Shiyi Chen, Joshua Graff-Zivin, Huanhuan Wang, Jiaxin Xiong, Sep 21, 2022 China implemented a pioneering policy in 2011, the Ecological Compensation Initiative (ECI), which establishes side payments between upstream and downstream provinces in the Xin’an River Basin.
Assessing and Addressing the Coronavirus-Induced Economic Crisis: Evidence from 1.5 Billion Sales Invoice Zhuo Chen, Pengfei Li, Li Liao, Zhengwei Wang, Aug 31, 2022 We probe the effects of the COVID-19 pandemic and the subsequent containment policies on business activities in China by exploiting big data on 1.5 billion sales invoices. The average drop in sales was between 23% and 35%, depending on firm size, for the 12-week period after the Wuhan lockdown.
Industrial Land Discount in China: A Public Finance Perspective Zhiguo He, Scott Nelson, Yang Su, Anthony Lee Zhang, Fudong Zhang, Jul 25, 2022 Local governments, which serve as monopolistic land sellers in China, face a trade-off when deciding to supply residential land versus industrial land. This trade-off is determined by the different time profiles of revenues from industrial and residential land sales, local governments’ financial constraints, and the extent of local governments’ tax revenue sharing with other levels of government.
Dollar Funding Stresses in China Laura Kodres, Leslie Sheng Shen, Darrell Duffie, Jul 13, 2022 The need for US dollar funding during the financial stresses of March 2020, as the COVID-19 pandemic shocked markets, was evident in a number of countries (Avdjiev, Eren, and McGuire 2020; Bahaj and Reis 2020).
Serial Entrepreneurship in China Loren Brandt, Ruochen Dai, Gueorgui Kambourov, Kjetil Storesletten, Xiaobo Zhang, Jul 06, 2022 New 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).
An Empirical Overview of Chinese Capital Market Grace Xing Hu, Jun Pan, Jiang Wang, Jun 29, 2022 We provide an empirical review of the Chinese capital market, focusing on the basic return and risk characteristics of its major asset classes, as well as a comparison to the US market. All major asset classes in China have significant higher volatilities than their counterparts in the US market, but they do not always yield larger returns. Small-company stocks, short-, medium-, and long-term treasury bonds outperform their US counterparts, while large stocks underperform and long-term enterprise bonds yield similar returns.
Mapping U.S.-China Technology Decoupling, Innovation, and Firm Performance Pengfei Han, Wei Jiang, Danqing Mei, Dec 01, 2021 We develop measures for technology decoupling and dependence between the U.S. and China based on combined patent data. The first two decades of the century witnessed a steady increase in technology integration (or less decoupling), but China’s dependence on the U.S. increased (decreased) during the first (second) decade. Decoupling in a technology field predicts China’s growing dependence on U.S. technology, which, in turn, predicts less decoupling further down the road...
School Enrollment Restriction on Migrant Children and Human Capital Losses Zibin Huang, Nov 24, 2021 In China, migrant children are at a disadvantaged and sometimes cannot enroll in public schools in migration destinations due to policy restrictions. Some migrant workers then have to leave their children behind in their hometowns, which causes the left-behind children problem. This study finds that if the enrollment restriction on migrant children is relaxed, migration of parents and children will increase, and the average human capital in the society will also increase. Low-skill families from small cities benefit most.
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