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on China |
| By: | William Barcelona; Danilo Cascaldi-Garcia; Jasper Hoek; Eva Van Leemput |
| Abstract: | Chinese authorities recently announced a growth target of "around 5 percent" for 2025, the same as their 2024 target. Five percent is about half the pace of growth that China sustained from the 1980s to the early 2010s, but it is nonetheless quite high for an economy flirting with deflation and mired in a years-long property bust. |
| Date: | 2025–06–06 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfn:2025-06-06-4 |
| By: | Tiago Cavalcanti; Pedro Molina Ogeda; Emanuel Ornelas |
| Abstract: | We examine the indirect effects of the US-China trade war on Brazil's labor market. Using industry-specific tariff changes and the sectoral employment distribution across local labor markets, we construct a measure of regional exposure to the trade conflict. Following higher exports to China, our findings reveal that regions more exposed to Chinese retaliatory tariffs on US exports experienced a relative increase in formal employment and wage bills. In contrast, American tariffs on Chinese ex-ports had no significant impact on Brazilian labor markets. These results contribute to a better understanding of the intricate worldwide implications of bilateral trade wars. |
| Keywords: | trade war, trade diversion, local labor markets, Brazil |
| Date: | 2025–05–02 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2098 |
| By: | Lu, M.; Pollitt, M. G. |
| Abstract: | China is transitioning from command-and-control energy-saving and carbon abatement policies to a carbon trading mechanism, aiming to reduce CO2 emissions more cost-effectively, replacing implicit carbon pricing with explicit carbon pricing. This shift raises a critical question: will high carbon prices reduce fossil fuel consumption in China? If so, carbon trading could serve as a pivotal tool for limiting emissions while addressing policy conflicts with Europe under the Carbon Border Adjustment Mechanism (CBAM) to some extent. Our study explores how Chinese manufacturing firms might respond to higher carbon prices by examining how they respond to energy prices. We do this by estimating long- and short-run energy price elasticities using firm-level data from 2007–2016. We leverage provincial energy price variations for long-run elasticity estimates through pooled cross-sectional analysis and examine short-run elasticity using an unbalanced panel model. The results indicate that manufacturing firms are responsive to energy price changes in the long run but largely unresponsive in the short term, likely due to the short-term effects of technology lock-in. These findings suggest that transitioning to carbon trading is an effective strategy for reducing CO2 emissions and mitigating China’s CBAM liabilities on energy-intensive exports, though ensuring policy continuity remains a significant challenge. |
| Keywords: | Carbon Price, Carbon Trading, CBAM, Energy Price Elasticity |
| JEL: | L94 |
| Date: | 2025–04–28 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2527 |
| By: | Tami Dinh (University of St. Gallen, Institute of Accounting, Control, Auditing); Florian Eugster (University of St. Gallen - Institute of Accounting, Control and Auditing; Swiss Finance Institute); Zhongze Li (Nanjing Audit University); Yuchen Wu (University of St. Gallen); Yi Zhang (University of St. Gallen (HSG)) |
| Abstract: | This study examines how employee pressure influences digital washing—when firms exaggerate their digital transformation in public disclosures without matching substantive, actual actions. Using data on Chinese listed firms from 2008 to 2021, we measure digital washing as the gap between digital-related keywords in annual reports and digital-related intangible assets. Results show that firms facing higher employee pressure are more likely to engage in digital washing. This effect is more pronounced in state-owned firms, labor-intensive firms, and firms in less market-oriented regions. A Difference-in-Differences analysis using the 2017 U.S.-China trade war supports our findings. Moreover, the consequences test shows that digital washing is associated with increased stock liquidity, indicating a favorable market response to digital washing. Overall, the findings highlight how firms facing conflicting institutional logics—pressures to modernize through digital transformation while maintaining employment—may engage in digital washing as a response. |
| Keywords: | Digital Washing, Institutional Logics, Digital Transformation, Employee pressure |
| JEL: | D22 D23 L20 M14 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:chf:rpseri:rp2549 |
| By: | Chen, Natalie (University of Warwick, CAGE, CESifo, and CEPR); Novy, Dennis (University of Warwick, CAGE, CESifo, CEP/LSE, and CEPR); Solórzano, Diego (Banco de México) |
| Abstract: | In 2018 and 2019, the US administration increased tariffs on imports from China. Did these tariffs lead to more US imports from other countries such as Mexico? Using highly disaggregated data on the universe of Mexican firm-level exports, we find evidence of trade diversion from China to Mexico. We then combine the export data with detailed longitudinal employer-employee data to investigate the impact of trade diversion on labor market outcomes for workers employed by Mexican exporters. We find that trade diversion increased the labor demand of exporters exposed to US tariffs against China, resulting in more employment and higher wages, especially for low-wage workers such as female, unskilled, younger, and non-permanently insured employees. The effects were concentrated in technology and skill-intensive manufacturing industries. |
| Keywords: | Employment, exports, …rms, tari¤s, trade costs, trade diversion, wages, workers JEL Classification: F12, F14, L11 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:755 |
| By: | Andres Rodriguez-Clare; Mauricio Ulate; Jose P Vasquez |
| Abstract: | We use a dynamic trade and reallocation model with downward nominal wage rigidities to quantitatively assess the economic consequences of the recent increase in the U.S. tariffs on imports from Mexico, Canada, and China, as well as the "reciprocal" tariff changes announced on "Liberation Day" and retaliatory measures by other countries. Higher tariffs trigger an expansion in U.S. manufacturing employment, but this comes at the expense of declines in service and agricultural employment, with overall employment declining as lower real wages reduce labor-force participation. For the United States as a whole, real income falls around 1% by 2028, the last year we assume the high tariffs are in effect. Importantly, our analysis disaggregates the U.S. into its 50 states, while incorporating cross-state redistribution of the tariff-generated fiscal revenue, allowing us to analyze which states gain or lose more from the shock. Around half of the states lose, with some states experiencing real income declines of more than 3%. Turning to cross-country results, some close U.S. trading partners - like Canada, Mexico, China, and Ireland - suffer the largest real income losses. |
| Keywords: | tariff changes, U.S. tariffs, liberation day, Canada, Mexico, China |
| Date: | 2025–05–08 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2103 |
| By: | Alicia García-Herrero; Michal Krystyanczuk; Robin Schindowski |
| Abstract: | In this paper we analyse the evolution of frontier innovation in quantum computing, semiconductors and artificial intelligence in China, US and EU |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:bre:wpaper:node_10917 |
| By: | Andrés Rodríguez-Clare; Mauricio Ulate; Jose P. Vasquez |
| Abstract: | We use a dynamic trade and reallocation model with downward nominal wage rigidities to quantitatively assess the economic consequences of recent U.S. tariff increases on imports from Mexico, Canada, and China, as well as the “reciprocal” tariff changes announced on “Liberation Day” and retaliatory measures by other countries. Higher tariffs lead to a rise in U.S. manufacturing employment, but this comes at the cost of declines in service and agricultural jobs. Overall employment falls, as lower real wages reduce labor-force participation. Real income in the U.S. declines by about 1% by 2028, the final year we assume the tariffs remain in effect. A key feature of our analysis is the disaggregation of the U.S. into its 50 states, incorporating cross-state redistribution of tariff revenue. This allows us to identify which states gain or lose more from the policy shock. Around half of the states experience real income losses, with some seeing declines greater than 3%. At the international level, close U.S. trading partners—including Canada, Mexico, China, and Ireland—suffer the largest real income losses. |
| JEL: | F10 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33792 |
| By: | Baibing Huang (Macau University of Science and Technology); Shaohua Tian (Macao Polytechnic University); Yang Zhang (University of Macau); Huanhuan Zheng (National University of Singapore) |
| Abstract: | This paper investigates the influence of institutional investors' corporate site visits on the timeliness of financial reporting. Utilizing data from publicly traded firms listed in the Shenzhen Stock Exchange (SZSE) in China, the study reveals that companies that receive a greater number of site visits from institutional investors exhibit shorter delays in the issuance of audit reports. These findings remain robust even after conducting various robustness checks and employing alternative estimation methods to address potential endogeneity concerns. Additionally, supplementary analysis suggests that institutional investors' site visits may enhance financial statement timeliness by facilitating more efficient acquisition of information and promoting enhanced corporate governance practices. Moreover, the study finds that institutional investors' site visits contribute to the timely disclosure of audit reports without compromising their quality. These significant findings hold important implications for firms, investors, and policymakers. |
| Keywords: | Corporate site visits; financial statement timeliness; Audit report lag; Institutional investors; Chinese listed firms |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:boa:wpaper:202533 |
| By: | Zhang, Xin; Chen, Xi; Sun, Hong; Yang, Yuanjian |
| Abstract: | This paper attempts to provide one of the first population-based causal estimates of the effect of air pollution on suicidal ideation-a key precursor to suicide attempt and completion-among school-age children. We use daily variations in the local wind direction as instruments to address endogeneity in pollution exposure. Matching a unique risk behavior survey of 55, 000 students from 273 schools with comprehensive data on air pollutants and weather conditions according to the exact date and location of schooling, our findings indicate that a 1% decline in daily PM2.5 is associated with a 0.36% reduction in the probability of suicidal ideation. Moreover, the dose-response relationship reveals that the marginal effects increase significantly and non-linearly with elevated concentration of PM2.5. The effect is particularly pronounced among younger, male, students from low-educated families, and students with lower grades. |
| Keywords: | suicidal ideation, air pollution, school-age children, risky behaviors, China |
| JEL: | I31 Q51 Q53 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1618 |
| By: | Alessia Matano (Dipartimento di Economia e Diritto, Università di Roma “La Sapienza”, Italy. AQR-IREA, Universitat de Barcelona, Spain.); Paolo Naticchioni (Roma Tre University and IZA, Italy.) |
| Abstract: | This paper investigates the relationship between China’s import competition and the innovation strategies of domestic firms. Using firm level data from Italy spanning 2005-2010 and employing IV fixed effects estimation techniques, we find that the impact of China’s import competition on innovation varies depending on the type of goods imported (intermediate vs. final). Specifically, imports of final goods boost both product and process innovation, while imports of intermediate goods reduce both. Additionally, we extend the analysis to consider the role of unions in moderating these responses. We find that, in unionized firms, imports' impact on innovation is mitigated, specifically to protect workers' employment prospects. |
| Keywords: | China’s Import Competition; Final and Intermediate Goods; Product and Process Innovation; Unions; IV Fixed effects estimations. JEL classification: C33, L25, F14, F60, O30, J50. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:ira:wpaper:202502 |
| By: | Qian Hui; Sidney I. Resnick; Tiandong Wang |
| Abstract: | Accurately identifying the extremal dependence structure in multivariate heavy-tailed data is a fundamental yet challenging task, particularly in financial applications. Following a recently proposed bootstrap-based testing procedure, we apply the methodology to absolute log returns of U.S. S&P 500 and Chinese A-share stocks over a time period well before the U.S. election in 2024. The procedure reveals more isolated clustering of dependent assets in the U.S. economy compared with China which exhibits different characteristics and a more interconnected pattern of extremal dependence. Cross-market analysis identifies strong extremal linkages in sectors such as materials, consumer staples and consumer discretionary, highlighting the effectiveness of the testing procedure for large-scale empirical applications. |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2506.04656 |
| By: | YANG, ZHANG (Department of Finance and Business Economics, Faculty of Business Administration / Asia-Pacific Academy of Economics and Management, University of Macau); JIANXIONG LIN (QIFU Technology, China); YIHE QIAN (Department of Finance and Business Economics, Faculty of Business Administration, University of Macau); LIANJIE SHU (Faculty of Business Administration , University of Macau) |
| Abstract: | MachiAs a key enabler of poverty alleviation and equitable growth, financial inclusion aims to expand access to credit and financial services for underserved individuals and small businesses. However, the elevated default risk and data scarcity in inclusive lending present major challenges to traditional credit assessment tools. This study evaluates whether machine learning (ML) techniques can improve default prediction for small-business loans, thereby enhancing the effectiveness and fairness of credit allocation. Using proprietary loan-level data from a city commercial bank in China, we compare eight classification models—Logistic Regression, Linear Discriminant Analysis (LDA), K-Nearest Neighbors (KNN), Support Vector Machine (SVM), Decision Tree, Random Forest, XGBoost, and LightGBM—under three sampling strategies to address class imbalance. Our findings reveal that undersampling significantly enhances model performance, and tree-based ML models, particularly XGBoost and Decision Tree, outperform traditional classifiers. Feature importance and misclassification analyses suggest that documentation completeness, demographic traits, and credit utilization are critical predictors of default. By combining robust empirical validation with model interpretability, this study contributes to the growing literature at the intersection of machine learning, credit risk, and financial development. Our findings offer actionable insights for policymakers, financial institutions, and data scientists working to build fairer and more effective credit systems in emerging markets. |
| Keywords: | machine learning, financial inclusion, small business, China, credit risk assessment |
| JEL: | G21 G32 C53 O16 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:boa:wpaper:202532 |
| By: | Rui Fan (Xian Jiaotong University); Alex Nikolsko-Rzhevskyy (Lehigh University); Oleksandr Talavera (University of Birmingham) |
| Abstract: | We examine the link between the U.S. stock market and foreign investor attention using SEC EDGAR log files and the MaxMind database to connect non-U.S. IP addresses with characteristics of S&P 500 stocks. A 10% increase in foreign EDGAR searches is associated with a 0.6% rise in abnormal daily returns. The effect is stronger for firms with lower sales, limited analyst coverage, lower institutional ownership, or high exposure to China. Our findings suggest that foreign attention, as reflected in EDGAR activity, shapes stock outcomes and that non-U.S. government policies may also influence U.S. market performance. |
| Keywords: | EDGAR system; MaxMind; stock market; investor attention; information acquisition |
| JEL: | G12 G14 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:bir:birmec:25-02 |
| By: | Alexander Abramov (RANEPA); Alexander Radygin (Gaidar Institute for Economic Policy); Maria Chernova (RANEPA) |
| Abstract: | Between 2023 and 2024, global financial markets recovered from the 2022 downturn amid expectations of declining central bank interest rates, slowing inflation, and market actors’ confidence that major economies escaped recession. Completion oftheUS presidential election, removing uncertainties in expectations of the country’s future economic course, had an important stabilizing effect on financial markets in 2024. After the FRS top discount rate rose from 0.25% in March 2021to 5.0% in March 2023, causing a shock in the markets of almost all investment assets in the USA, it fell to 4.5% in December 2024. The ECB refinancing rate, after rising from 0% to 4.5% from June 2022 to October 2023, has fallen to 3.15% in December 2024 and 2.65% in March 2025. In 2024, China adopted a series of measures to ease monetary policy and support financial market, its economy maintained steady growth at 5%. |
| Keywords: | Russian economy, stock market, bond market, corporate bond market, derivatives market, private investors |
| JEL: | G01 G12 G18 G21 G24 G28 G32 G33 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:gai:ppaper:ppaper-2025-1406 |
| By: | Francesco de Cunzo; Aurelio Patelli; Angelica Sbardella; Andrea Tacchella |
| Abstract: | This paper presents new evidence on how countries are innovating in response to the growing strategic importance of critical raw materials (CRMs). Using millions of patent abstracts from the PATSTAT database, we apply a large language model (LLM) to classify CRM-related inventions into four functional roles: use, refine, recycle, and remove. A fifth category, wrong, flags false positives and improves classification accuracy. This approach moves beyond simple patent counts by identifying the specific roles CRMs play in technological development, enabling a more nuanced view of innovation strategies. Our classification reveals a significant increase in CRM-related innovation over the past two decades, with notable variation across materials, functions, and countries. While use-related patents remain dominant, recent growth in recycle and remove functions points to a shifting emphasis on circularity. Geographically, China leads across all functions, while an upward trend in recycling activity is observed across several advanced economies. A panel data analysis reveals that innovation in refining, recycling, and removing CRMs is positively associated with innovation in their use, suggesting functional complementarities that can enable both technological progress and more sustainable material strategies. These findings have important implications for policy, highlighting the value of supporting functionally diverse CRM innovation, fostering international coordination, and adopting tools for real-time innovation monitoring. By combining text mining with AI-driven functional classification of patented inventions, this study offers a scalable method for tracking material-related innovation and informing policies aimed at sustainability and technological resilience. |
| Keywords: | Critical Raw Materials, Green and Digital Technologies, Large Language Models, Text Mining |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2516 |
| By: | Tommaso Pardi (IDHES - Institutions et Dynamiques Historiques de l'Économie et de la Société - UP1 - Université Paris 1 Panthéon-Sorbonne - UP8 - Université Paris 8 Vincennes-Saint-Denis - UPN - Université Paris Nanterre - UEVE - Université d'Évry-Val-d'Essonne - CNRS - Centre National de la Recherche Scientifique - ENS Paris Saclay - Ecole Normale Supérieure Paris-Saclay, MSH Paris-Saclay - Maison des Sciences de l'Homme - Paris Saclay - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique - ENS Paris Saclay - Ecole Normale Supérieure Paris-Saclay, ENS Paris Saclay - Ecole Normale Supérieure Paris-Saclay); Marc Alochet (X - École polytechnique - IP Paris - Institut Polytechnique de Paris); Bernard Jullien (UB - Université de Bordeaux); Alexandra Kuyo (ENS Paris Saclay - Ecole Normale Supérieure Paris-Saclay) |
| Abstract: | A letter addressed ahead of the Strategic Dialogue on the Future of the European Automotive Industry by a consortium of French and Italian equipment manufacturers and their professional associations has demanded the introduction of local content requirements and incentives to fulfil this regulatory void and preserve the resilience of the European automotive supply chain against unfair Chinese competition.The Industrial Action Plan for the European automotive sector announced on the 5 th of March highlights the need to strengthen the "trade defence" toolbox and "to investigate unfair practices further up the supply chain, including in the batteries and parts segment when necessary" 5 . However, there are no references to local content requirements or incentives, at least for the auto parts' sector.Against this background, the present reports focuses on two questions:-Why is it necessary to implement now a comprehensive local content policy (LCP) for the automotive sector? -What type of policy mix should Europe implement to introduce rapidly and efficiently local content requirements for automotive production? Kratz, Piper, and Bouchaud, 'China and the Future of Global Supply Chains'. |
| Keywords: | China, automotive industry, European Union, protectionism, local content, competition |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05076860 |
| By: | LEE, Cheon-Kee (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | Since the establishment of the GATT in 1947 and the WTO multilateral trading system in 1995, trade liberalization has led to an increase in global trade and the internationalization of production through global supply chains. In recent years, however, as non-trade values including national security, labor rights, and environmental protection have become important considerations, supply chains have become an end in themselves rather than a means of pursuing efficiency. Additionally, major trading partners such as the U.S, the EU, and China have sought to regulate global supply chain by leveraging market access to their domestic markets or critical minerals. (the rest omitted) |
| Keywords: | Korea; Strategy; Critical Mineral: Global Challengy |
| Date: | 2025–04–14 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kiepwe:2025_011 |
| By: | Jeong, Hyung-gon (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | Amid intensifying global competition, South Korea's semiconductor industry is confronting structural challenges across technology, markets, and supply chains. The competitiveness of Korea’s memory semiconductor sector peaked in 2018 and has since been declining. Korea’s share of memory exports to China fell from 45.7% in 2018 to 31.7% in 2024. An analysis of memory semiconductor patents held by the global top 10 semiconductor companies indicates that while Korean firms maintain a quantitative edge, they are increasingly challenged by U.S. firms such as Micron and SanDisk in terms of technological quality. (the rest omitted) |
| Keywords: | Analysis; South Korea; Global Competitiveness; Semiconductor |
| Date: | 2025–04–28 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kiepwe:2025_013 |
| By: | Gereffi, Gary |
| Abstract: | Mexico has been a “nearshoring” platform for the United States (U.S.) economy on a regular basis in recent decades. However, the nature and degree of Mexico’s integration within North America, as well as its ability to create and capture value and innovation rents in its core domestic industries, have varied over time. Previous examples of nearshoring in Mexico in the automotive and textile and apparel industries, we well as regional trade agreements like NAFTA and USMCA and global trade conflicts such as the U.S.-China trade war, have made Mexico a likely candidate to take advantage of recent U.S. industrial policies to strengthen strategic American supply chains. Current U.S. nearshoring opportunities in industries such as semiconductors, electric vehicles, pharmaceutical active ingredients, and rare-earth minerals such as lithium will require active industrial policies in Mexico related to infrastructure (e.g., ports, electricity, water), attracting appropriate foreign direct investment, capability-building in local firms, and building a skilled workforce for new industries. While some investments are occurring at the subnational level in Mexico, a more focused national response will multiply potential nearshoring benefits for Mexico. |
| Date: | 2025–02–07 |
| URL: | https://d.repec.org/n?u=RePEc:ecr:col094:81251 |
| By: | Nayanima Basu; Alicia García-Herrero |
| Abstract: | Despite signs of cautious improvement, India-China relations remain deeply strained by border tensions and mutual distrust |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:bre:wpaper:node_10951 |