A Bridge on Economic Issues between China and the World
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What You Import Matters for Productivity Growth: Experience from Chinese Manufacturing Firms
Jiawei Mo, Larry D. Qiu, Hongsong Zhang, Xiaoyu Dong, Dec 22, 2021We find that capital import has a substantially larger productivity effect than intermediates import, by generating significant long-term productivity gains through R&D-capital synergy, R&D-inducing, and direct dynamic productivity effects. Our findings highlight the importance of tariff structure in tariff liberalization: the change in tariff structure explains 18% of the productivity gains following China’s WTO accession.
The Value of Bankruptcy Court in Financial Distress: Evidence from Chinese Bond Market
Bo Li, Mai Li, Songnan Li, Laura Xiaolei Liu, Mar 15, 2023In this paper, we find that the introduction of specialized bankruptcy courts, which are run by better-trained judges and subject to less government intervention, reduces the cost of bond financing by around 10%.
Does Import Competition Harm Innovation? Evidence from Firm-level Data in China
Qing Liu, Ruosi Lu, Yi Lu, Tuan Anh Luong, Oct 06, 2021Twenty years ago, China’s entering the World Trade Organization (WTO) was a catalyst for its economic development and propelled China into becoming one of the most important economies in the world. But massive import tariff reductions allowed more import competition, which raised concerns that innovation would be curbed. Tuan Luong, from De Montfort University, and his co-authors, Qing Liu, Ruosi Lu, and Yi Lu, discuss the impacts of import competition on domestic innovation...
Innovation versus imitation: Where all that Chinese R&D is going
Michael König, Zheng (Michael) Song, Kjetil Storesletten, Fabrizio Zilibotti, Jan 26, 2022China is aiming to become a technological innovation powerhouse by 2050, with Premier Li Keqiang recently announcing an increase in R&D investments by 7% for the next five years. But greater R&D investment is no guarantee of success. This column examines the effects of R&D investments by Chinese firms on aggregate productivity and growth.
Debt Management and Strategic Interactions in Top-down Bureaucracy: Evidence from China
Xi Qu, Zhiwei Xu, Jinxiang Yu, Apr 30, 2025The Chinese central government implemented a series of measures to establish a top-to-bottom debt ceiling management system starting in 2015. Under this regulatory framework, public debt issuance for a prefecture city is subject to a ceiling (quota) determined through a hierarchical procedure. Based on a comprehensive dataset, we investigate what factors determine the allocations of debt ceiling to prefectural cities in China after the debt management reform. We find that the distributional outcome of the debt ceilings relies on the bilateral interactions of local and their superior governments. We also estimate the effect of ceiling allocation on the real economy, as well as the potential risk associated with implicit debt accumulation.
