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Evaluating the Burden of a U.S.-China Trade War
Meixin Guo, Lin Lu, Liugang Sheng, Miaojie Yu, Apr 25, 2018Trade disputes between the United States and China greatly intensified recently as the two countries announced a 25 percent tariff hike on $50 billion worth of products imported from each other, raising the risk of a trade war between the two giant trading economies. Based on a standard multi-sector, multi-country general equilibrium trade model with input-output linkages, we evaluate the cost of a trade war in which the United States and China both increase their tariffs to 45% for all imports from each other. We find that the United States would be more likely to be the bigger loser and that the cost for China would be moderate.
Industry/Policy View Taxation Trends and Challenges in a Digital Economy — Implications for the People’s Republic of China
Akiko Terada-Hagiwara, Sep 11, 2019The digital economy is growing rapidly across the globe and, among developing countries, the PRC is a leader. Despite its promise, the global digital economy also poses many challenges, including tax base erosion and profit shifting. Given the initial efforts by the PRC to address these challenges, this post recommends that the country continues...
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.
Industry/Policy View The Growth and Geography of RMB Trading
Yin-Wong Cheung, Robert N. McCauley, Chang Shu, Jan 08, 2020The 2019 Bank for International Settlements Triennial Foreign Exchange Survey reveals two different trends in RMB trading in 2016–2019 compared to the previous three year interval—a slowdown both in growth and in geographic diffusion. Regarding the first trend, we argue the rapid growth of RMB trading into 2014 relied on a gradual appreciation trend that encouraged a one-sided RMB internationalization. Global trading in RMB resumed its growth in 2017...
Credit Expansion and Allocation Dynamics under Economic Stimulus
Lin William Cong, Jacopo Ponticelli, Sep 13, 2017We study credit allocation across firms and its real effects during China’s economic stimulus plan of 2009-2010 using loan-level data from the 19 largest Chinese banks matched with firm-level data on manufacturing firms. We find that the stimulus-driven credit expansion significantly affected firm borrowing, investment, and employment. The plan disproportionately favored state-owned firms and firms with a lower marginal product of capital, reversing the process of capital reallocation that characterized China’s high growth before 2008.
