A Bridge on Economic Issues between China and the World
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Trade Liberalization and the Performance of China’s Manufacturing Sector
Loren Brandt, Johannes Van Biesebroeck, Luhang Wang, Yifan Zhang, Dec 27, 2017China’s entry into WTO resulted in a significant reduction in tariffs on imported manufactured goods into China. We examine the effects of market liberalization on firm and industry performance. Tariff cuts on outputs and intermediates had highly complementary effects on productivity, and explain in upwards of forty per cent of the productivity gains between 1998-2007. The effects on mark-ups were largely offsetting, however lower tariffs on inputs helped to provide additional resources for productivity-enhancing investments.
Production Networks and Firm Value: Evidence from the US-China Trade War
Yi Huang, Chen Lin, Sibo Liu, Heiwai Tang, Mar 25, 2020This paper discusses the effects on the financial markets of the several rounds of tariff hikes during the 2018–19 US-China trade war. It illustrates that US firms that are more dependent on exports to and imports from China have lower stock prices around the announcement date, while the expectation of weakened Chinese import competition due to US tariffs plays an economically minimal role. Firms with indirect exposure to US-China trade through domestic supply chains also...
A New Perspective on China’s Credit Boom
Kinda Hachem, Michael Zheng Song, Jun 20, 2017What caused the enormous credit boom in China? This column by Kinda Hachem and Michael Song offers an unexpected explanation of stricter liquidity regulations on banks leading to a credit boom through competition between small and big banks and their heavy use of shadow banking investment instruments.
Long-run Trends in China’s Urban Unemployment and Labor Force Participation
Shuaizhang Feng, Yingyao Hu, Robert Moffitt, Jul 19, 2017Official unemployment rate in China is based on registered unemployment figures, but the official figures are likely underestimates of the true unemployment rates because many unemployed people are not qualified to register with government agencies and even those who are qualified may choose not to for various reasons. Shuaizhang Feng of Jinan University, and Yingyao Hu and Robert Moffitt, both of Johns Hopkins University, discuss their new effort to provide the first comprehensive picture of China’s labor market for the period 1988-2009 using Urban Household Survey (UHS) data administered by the National Bureau of Statistics of China.
Trading Restriction as a Channel of Financial Contagion—Evidence from China’s Stock Market
Laura Xiaolei Liu, Jiajie Xu, Ninghua Zhong, Oct 18, 2017China’s stock market imposes various trading restrictions such as daily price limits and trading suspension rules, which are intended to stabilize the market during turmoil. During China’s stock market crash in the summer of 2015, these trading restrictions made many highly valued stocks non-tradable and consequently caused mutual funds facing redemption pressure or with precautious concerns to sell other tradable stocks, exacerbating their price drops.
