A Bridge on Economic Issues between China and the World
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Input Trade Liberalization and Firm Labor Market Power in China
Illenin O. Kondo, Yao Amber Li, Wei Qian, Jul 30, 2025More trade, more jobs? Or fewer? China’s accession to the WTO has catalyzed a rich research agenda on the labor market consequences of trade liberalization. Departing from the assumptions of perfectly competitive labor markets, we ask whether Chinese firms exercised more or less labor market power when input tariffs fell with China’s WTO accession? We show that input trade liberalization reduced labor monopsony power in China, especially for skill-intensive firms and in markets with more labor supply growth.
Do Chinese Cultures Spawn Family Businesses
Joseph P. H. Fan, Qiankun Gu, Joyce Xin Yu, Jun 18, 2025Using a sample of Chinese private-sector firms that went public, we find that founders from the country’s regions with stronger collectivist cultures engage more family members as managers, retain more firm ownership within the family, and share the controlling ownership with more family members. Our study suggests that the collectivist culture boosts the formation of family businesses because the collectivist culture reduces information asymmetry, shirking problems, and associated monitoring costs among family members.
The Rise of China as an International Lender
Zhengyang Jiang, Dec 16, 2025In the past decade, China has become the largest creditor to developing countries, surpassing the IMF, World Bank, and Paris Club countries. This column discusses how China's overseas lending interacts with US monetary policy – another key driver of the global financial cycle. It finds that Chinese and US policies jointly influence the level and the distribution of risk exposures in developing countries. As a result of China's expanding role in international lending, the architecture of global financial intermediation is also undergoing a fundamental transformation, carrying important implications for the stability and functioning of the international monetary system.
Visible Hands: Professional Asset Managers’ Expectations and the Stock Market in China
John Ammer, John Rogers, Gang Wang, Yang Yu, Jun 11, 2025Mutual funds have become an important type of private institutional investor in Chinese security markets, with assets under management exceeding $3 trillion. We study how Chinese fund managers’ growth expectations affect their equity investment decisions, and in turn, the effects on stock prices. We identify a strong short-run causal effect of growth expectations on stock returns. We also find that fund investment helps bring prices in line with firms’ longer-run earnings prospects.
Rural-Urban Migration and Market Integration
Dennis Egger, Benjamin Faber, Ming Li, Wei Lin, Nov 19, 2025Reductions in rural-to-urban migration barriers have led to economic gains for both rural origins and urban destinations by reducing information frictions and facilitating the flow of goods and investments between cities and the countryside.
