Latest
Paying to Pollute: How Carbon Offsets Actually Raised Emissions in China Qiaoyi Chen, Nicholas Ryan, Daniel Xu, Oct 29, 2025 How do we cut carbon emissions without slowing economic growth? One way is through offset markets: markets to buy reductions in emissions from parties all over the world. Offsets are meant to incentivize projects that cut emissions. Instead of reducing emissions themselves, firms or countries can pay others to do so on their behalf. This trade in abatement can potentially lower the costs of bringing emissions down.
Migration,Tariffs,and China’s Export Surge Chen Liu, Xiao Ma, Oct 22, 2025 China’s exports have increased dramatically in recent decades. We build a multi-sector spatial general equilibrium model and combine rich data sources to account for China’s export surge between 1990 and 2005 from three policy changes: China’s import tariffs, tariffs imposed on China’s exports, and barriers to internal migration in China. We find that the three policy changes jointly accounted for 30% of China’s export growth between 1990 and 2005 and that there is a positive interaction between tariff and migration policies.
Digital Dividends? Rural E-Commerce and the Urban-Rural Income Gap Lei Wang, Yongming Sun, Oct 15, 2025 We examine the impact of China’s Rural E-Commerce Comprehensive Demonstration (RECD) project on the urban-rural income gap. Using county-level data from 2006 to 2022 and a time-varying difference-in-differences design, we find that participation in the RECD project led to a significant reduction in urban-rural income disparity. The effects were especially pronounced in less-developed regions, poverty-designated counties, and areas with weaker digital infrastructure and gains were disproportionately concentrated among rural households. These “biased” digital dividends contrast with market-driven e-commerce development, such as Taobao Villages, which tended to exacerbate inequality.
Quarters of Birth Matter for Girls: How Agricultural Seasonality Shapes Gender Inequality in China Xuezheng Qin, Junjian Yi, Haochen Zhang, Oct 08, 2025 We find that people born in the fourth quarter tend to have better lifecycle outcomes than others in China. More importantly, this birth quarter effect is significantly larger for females than for males. Such a gendered pattern is likely driven by seasonal variations in household resources induced by agricultural seasonality, which may exert gender-differentiated effects on intrahousehold neonatal investment due to son preference. These findings have meaningful implications for the role of economic development in reducing gender inequality through the (gender-neutral) increase in household resources.
Monetary Policy in China: A Trade-Off Between Transmission and Stability? Kaiji Chen, Yiqing Xiao, Tao Zha, Sep 24, 2025 We explore how China’s shift toward interest-rate-based monetary policy faces an inherent trade-off. When non-state banks turn to wholesale funding, monetary policy easing is transmitted more effectively to productive firms, but the banking system also becomes more fragile in economic downturns. Our findings suggest that China’s regulators must strike a careful balance between achieving policy effectiveness and safeguarding financial stability.
Money or Monitoring: What Motivates Workers in China? Jing Cai, Sai Luo, Shing-Yi Wang, Sep 17, 2025 Higher compensation incentivizes workers to work additional hours and stay at the firm, while increased monitoring enhances work quality but also increases quitting by workers.
Mortgage Prepayment in China Zhenyu Gao, Wenxi Jiang, Haohan Ren, Kemin Wang, Yuezhi Wu, Sep 10, 2025 During the 2019–2024 monetary easing cycle, Chinese households used their savings to prepay unprecedented amounts of mortgage loans. Because refinancing was restricted, mortgage rates remained rigid, while savings returns quickly adjusted to rate cuts. The widening gap between borrowing costs and savings returns encouraged prepayment (deleveraging) and reduced consumption. Our findings suggest that the rigid mortgage rates have rendered China’s monetary easing counterproductive.
Increasing government transparency reduced pollution violations and improved air quality in China Mengdi Liu, Mark Buntaine, Sarah Anderson, Bing Zhang, Sep 03, 2025 Government transparency helps bridge gaps between environmental laws and actual practices, improving health and environmental quality broadly.
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.
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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