A Bridge on Economic Issues between China and the World
Facebook 
Twitter 
Instagram
WeChat 
Email Most Popular
Rise of Bank Competition: Evidence from Banking Deregulation in China
Haoyu Gao, Hong Ru, Robert Townsend, Xiaoguang Yang, Aug 17, 2019This paper documents a novel trade-off of banking deregulation in the context of China by using loan-level big data. We find that following a deregulation in the form of geographically lowered bank entry barriers, the potential benefits such as the lower interest rates for borrowers were mitigated adversely by the worsening credit allocation. The soft budget constraint...
Faking Trade for Capital Control Evasion: Evidence from Dual Exchange Rate Arbitrage in China
Renliang Liu, Liugang Sheng, Jian Wang, Nov 25, 2020We examine whether firms over-report international trade to evade capital controls for foreign exchange arbitrage, by specifically testing whether the aggregate bilateral trade data gap between trading partners is positively (negatively) correlated with the exchange rate spread when the spread is positive (negative). At the disaggregated level, we also employ Benford’s law to detect trade data manipulations...
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.
China’s Producer Price Reflation in 2016–2017: Capacity Cuts or Recovering Aggregate Demand?
Linxi Chen, Ding Ding, Rui C. Mano, Nov 23, 2018In late 2015, the Chinese government launched a multi-year plan to reduce capacity in the coal and steel industries. Around the same time, producer price inflation in China started to pick up strongly after being trapped in negative territory for 4½ years. What is behind this broad reflation—cuts in coal and steel capacity or a strengthening of aggregate demand...
How Does the Interaction between China’s Monetary and Regulatory Policies Impact Shadow Banking and Total Bank Credit?
Kaiji Chen, Jue Ren, Tao Zha, Jul 12, 2017Following the four Trillion RMB fiscal stimulus in 2009, People's Bank of China tightened up its M2 supply. Kaiji Chen, Jue Ren and Zha Tao from Emory University and Federal Reserve Bank of Atlanta explored how the banks reacted to the tightening of M2 supply by expanding shadow banking activities, and how the rapid growth of shadow banking in turn hampers the effectiveness of monetary policy.
