A Bridge on Economic Issues between China and the World
Facebook 
Twitter 
Instagram
WeChat 
Email Most Popular
Chinese Corporate Credit Ratings: Comparing Global and Domestic Agencies
Xianfeng Jiang, Frank Packer, Dec 06, 2017When comparing the credit ratings of domestic and global agencies on Chinese corporations, because of the differences in ratings scales, it is best to focus on the domestic and global agency orderings of relative credit risk. Testing for differences in the determinants of ratings, we find that asset size is weighed more heavily as a positive factor by domestic agencies, while profitability and state-ownership are weighed more positively by global rating agencies, which also weigh leverage more heavily as a negative factor. In spite of these differences, both domestic and global ratings appear to be priced into the market values of rated bonds.
Peak China Housing?
Kenneth Rogoff, Yuanchen Yang, Sep 16, 2020China’s real estate market has been a key engine of its sustained economic expansion. This paper argues, however, that even before the COVID-19 shock, a decades-long housing boom had given rise to price misalignments and regional supply-demand mismatches, making an adjustment both necessary and inevitable. Based on input-output analysis and benchmarking against other economies, we estimate the size of China’s real estate–related activities to be 29% of the economy and conclude that the sector is quite vulnerable to a sustained aggregate growth shock.
The 2009 Monetary Stimulus in China
Kaiji Chen, Patrick Higgins, Daniel F. Waggoner, Tao Zha, Mar 21, 2018Massive monetary injections occurred in 2009Q1-Q4 as a result of a drastic change in monetary policy causing an unprecedented credit expansion in 2009-2011, which stimulated economic growth in the short-run. New credit was disproportionately allocated to real estate and its supporting heavy industries and fueled a sharp rise in land prices. The long-lasting consequence of this monetary stimulus resulted in a twin problem facing China: the high investment-to-GDP and debt-to-GDP ratios.
Understanding the Chinese Stock Market: Long-term Performance and Institutional Reforms
Franklin Allen, Jun Qian, Chenyu Shan, Lei Zhu, Jul 05, 2017The Chinese economy had spectacular growth in the past three decades, however the Chinese stock market had the worst performance among the major stock markets. Professor Franklin Allen from Imperial College, Professor Jun Qian from Fanhai International School of Finance, Fudan University, and coauthors offer their explanation of this puzzling divergence.
Notching R&D Investment with Corporate Income Tax Cuts in China
Zhao Chen, Zhikuo Liu, Juan Carlos Suárez Serrato, Daniel Yi Xu, Aug 16, 2017To encourage innovation, the Chinese government gave tax incentives to firms whose R&D intensity (as measured by the ratio of R&D expenditures over total sales) exceeds a threshold that varies by their total sales. Using a major corporate tax reform in 2008, Professor Daniel Yi Xu from Duke University and his coauthors provide empirical evidence for some "strategic" behavior — including some relabeling of administrative expenditures as R&D — by the firms to take advantage of the tax incentives.
