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on China |
| By: | Asmus-Bluhm, Gerda; Eichenauer, Vera Z.; Fuchs, Andreas; Parks, Bradley |
| Abstract: | China and India increasingly provide aid and credit to developing countries. This article explores whether India uses these financial instruments to compete for geopolitical and commercial influence with China. We build a new geocoded dataset of Indian government-financed projects in the Global South between 2007 and 2014 and combine it with data on Chinese government-financed projects. Our regression results for 2, 333 provinces within 123 countries demonstrate that India’s Exim Bank is significantly more likely to locate a project in a given jurisdiction if China provided government financing there in the previous year. Since this effect is more pronounced in countries where India is more popular relative to China and where both lenders have a similar export structure, we interpret this as evidence of India competing with China. By contrast, we do not find evidence that China uses official aid or credit to compete with India through co-located projects. |
| Keywords: | development finance, foreign aid, official development assistance, official credits, South-South cooperation, China, India, geostrategic competition, geospatial analysis |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:323600 |
| By: | Hanushek, Eric A. (Stanford University); Kang, Le (Nanjing University); Li, Xueying (Nanjing University of Finance and Economics); Zhang, Lei (Zhejiang University) |
| Abstract: | The changing pattern of quality in China’s rural schools across time and province is extracted from the differential labor market earnings of rural migrant workers. Variations in rates of return to years of schooling across migrant workers working in the same urban labor market but having different sites of basic education provide for direct estimation of provincial school quality. Corroborating this approach, these school quality estimates prove to be highly correlated with provincial cognitive skill test scores for the same demographic group. Returns to quality increase with economic development level of destination cities. Importantly, quality appears higher and provincial variation appears lower for younger cohorts, indicating at least partial effectiveness of more recent policies aimed at improving rural school quality across provinces. Surprisingly, however, provincial variations in quality are uncorrelated with teacher-student ratio or per student spending. |
| Keywords: | migration, school quality, China |
| JEL: | I25 J6 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18030 |
| By: | Bluhm, Richard; Dreher, Axel; Fuchs, Andreas; Parks, Bradley C.; Strange, Austin M.; Tierney, Michael J. |
| Abstract: | This paper studies the causal effect of transport infrastructure on the spatial distribution of economic activity within subnational regions across a large number of developing countries. To do so, we introduce a new global dataset of geolocated Chinese grant- and loan-financed development projects from 2000 to 2014 and combine it with measures of spatial concentration based on remotely sensed data. We find that Chinese financed transportation projects decentralize economic activity within regions, as measured by a spatial Gini coefficient, by 2.2 percentage points. The treatment effects are particularly strong in regions that are less developed, more urbanized, and located closer to cities. |
| Keywords: | Development finance, Transport costs, Infrastructure, Foreign aid, Spatial concentration, China |
| JEL: | F35 R11 R12 P33 O18 O19 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:323671 |
| By: | Avner Greif; Joel Mokyr; Guido Tabellini |
| Abstract: | Why did the industrial revolution occur in Europe and not in China, despite China being well ahead of Europe in terms of economic and technological achievements several centuries earlier? We revisit this long-standing question from a new perspective. We emphasize the importance of the different social organizations that diffused in these two parts of the world in the centuries that preceded the industrial revolution: kin-based organizations in China, vs corporations in Europe. We explain their cultural origins, and discuss how these different organizations shaped the evolution of legal systems, political institutions and human capital accumulation in these two parts of the world. Our main argument is that European corporations played a crucial role in the scientific and technological innovations that ultimately led to the industrial revolution. |
| Keywords: | industrial revolution, China, Europe, culture, institutions, organizations |
| JEL: | N00 P00 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12023 |
| By: | Bian, Alice; Dikau, Simon; Miller, Hugh; Pierfederici, Roberta; Stern, Nicholas; Ward, Bob |
| Abstract: | As the world’s largest trading nation, China holds a dominant position in global green manufacturing, particularly through the development of the so-called ‘new three’ clean energy technologies – that is, electric vehicles, lithium-ion batteries and solar panels. There are tremendous opportunities for emerging markets and developing countries to improve their integration into global supply chains for clean energy technologies by leveraging intra-regional trade that boosts their manufacturing competitiveness and exports of higher-value-added products. This policy insight seeks to evaluate China’s role in supply chains for renewable energy technologies, and how the country can support the energy transition in other countries, particularly those in the Association of Southeast Asian Nations (ASEAN) region and the Belt and Road Initiative (BRI). |
| Keywords: | ASEAN; Asia; Association of Southeast Asian Nations; batteries; Belt and Road Initiative; China; China ETS; clean energy; climate finance; electric vehicles; international agreement; international climate finance; Just Energy Transition Partnerships; manufacturing; net zero transition plan; regional comprehensive economic partnership; South-east Asia; supply chains; transition-critical materials |
| JEL: | R14 J01 |
| Date: | 2024–02–21 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129230 |
| By: | William Milberg (Department of Economics, New School For Social Research, USA); Lauren Johnston (Department of Economics, New School For Social Research, USA) |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:new:wpaper:2512 |
| By: | Dawn Chinagorom-Abiakalam; Fernando Leibovici |
| Abstract: | This paper studies the impact of changes in the composition of U.S. import sources on aggregate import prices and their implications for consumer prices. We decompose import price changes into within-source price adjustments and changes in sourcing composition. Using bilateral import data, we find that sourcing from lower-cost suppliers, particularly China, put sustained downward pressure on aggregate import prices until the mid-2010s. Since then, shifts away from China have partially reversed this effect, raising both import and consumer prices. We also find sourcing reallocation responds sharply to trade policy, playing a notable role during the 2018 U.S.–China trade war. |
| Keywords: | import prices; consumer prices; import source reallocation |
| JEL: | F14 E31 C43 E1 |
| Date: | 2025–08–15 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedlwp:101434 |
| By: | Mr. Daniel Garcia-Macia; Siddharth Kothari; Yifan Tao |
| Abstract: | This paper quantifies the size of the main industrial policy instruments in China and estimates their impact on domestic factor misallocation and aggregate productivity. The quantification of industrial policy instruments leverages data from financial reports of listed firms and the land registry. The equivalent fiscal cost of industrial policy through cash subsidies, tax benefits, subsidized credit, and subsidized land for favored sectors (including both private and state-owned firms) is estimated at about 4 percent of GDP per year, with a growing share of tax benefits over time. Next, the paper uses a structural model to estimate the relationship between industrial policies and factor misallocation for a broad sample of firms. Various industrial policy instruments are found to affect factor allocations in different ways—subsidies tend to lead to excess production, while trade and regulatory barriers limit production. Overall, factor misallocation from industrial policies is estimated to reduce domestic aggregate TFP by about 1.2 percent. The results resonate with IMF policy recommendations for China to scale back industrial policy and increase its transparency. |
| Keywords: | China; Industrial Policy; Misallocation; Productivity; policy instrument; factor misallocation; land registry; No. 2025/155; IMF policy recommendation; Total factor productivity; Corporate income tax; Manufacturing; Public enterprises |
| Date: | 2025–08–08 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/155 |
| By: | Yini Liu (UWO - University of Western Ontario); Di Lu (SZU - Shenzhen University [Shenzhen] = 深圳大学, Audencia Business School); Suhua Tian (Fudan University [Shanghai]) |
| Abstract: | Abstract In this article, we investigate how the participation of firms' existing shareholders affects the pricing and valuation of private investments in public equity (PIPEs). Using a large sample of PIPEs issued by Chinese listed firms from 2006 to 2019, we find that the effective discount and long‐term buy‐and‐hold abnormal stock returns of PIPEs with existing shareholder participation are significantly higher than those with only new investor participation, after controlling for heterogeneous types of PIPE investors. However, the superior post‐PIPE stock performance of deals with existing shareholders is not driven by improved operating performance but by tunneling activities such as frequent dividend announcements, related‐party transactions, and positive earnings management during the lock‐up period. Our findings suggest that the effect of existing shareholders' participation in private equity placements is more consistent with the tunneling hypothesis than the certification hypothesis. We document that the tunneling incentives are stronger when firms face greater financial constraints and can be mitigated when the firm's corporate governance is stronger. |
| Abstract: | This paper investigates how the participation of firms' existing shareholders affects the pricing and valuation of private investments in public equity (PIPEs). Using a large sample of PIPEs issued by Chinese listed firms from 2006 to 2019, we find that the effective discount and long-term buy-and-hold abnormal stock returns of PIPEs participated by existing shareholders are significantly higher than those participated only by new investors, after controlling heterogeneous types of PIPE investors. However, the superior post-PIPE stock performance of deals with existing shareholders is not driven by improved operating performance but tunneling activities such as frequent dividend announcements, related-party transactions, and positive earnings management during the lock-up period. Our findings suggest that the effect of existing shareholders presence in private equity placements is more consistent with the "Tunneling Hypothesis" than the "Certification Hypothesis". We document that the tunneling incentives are stronger when firms face greater financial constraints and can be mitigated when the firm's corporate governance is stronger. |
| Keywords: | Existing shareholder, Private equity placement, Tunneling effect, Corporate governance, Private equity placements, PIPEs, Existing shareholders, Pricing and valuation effects, Tunneling incentives |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05133550 |
| By: | Cai, Huan (College of Business, Southern University of Science and Technology (SUSTech), Shenzhen, China); Dong, Lu (College of Business, Southern University of Science and Technology (SUSTech), Shenzhen, China); Xie, Jian (College of Business, Southern University of Science and Technology (SUSTech), Shenzhen, China) |
| Abstract: | This paper examines gender disparities in parenting in the digital domain, using a novel dataset that records the gender composition of users across more than 6, 000 app-level observations in China. Two patterns stand out. First, parenting apps are strongly feminized: women account for nearly two-thirds of users, compared to fewer than half for the typical non-parenting app. Second, the female share is highest in cities where women enjoy greater income and educational attainment, and lowest in areas marked by more entrenched gender inequality. The women most engaged in digital caregiving are therefore those best positioned to transcend traditional roles. Mechanism analysis suggests that this is not driven by broader digital fluency among affluent women, but rather reflects their intentional choice for intensive parenting practices. |
| Keywords: | Gender Inequality, Digital Technology, Parenting, Unpaid labor, China JEL Classification: J13, J16, O33 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:765 |
| By: | Agramont, Daniel |
| Abstract: | This paper analyzes the evolving geopolitical dynamics surrounding critical raw materials (CRMs), with a focus on Latin America and the European Union's (EU) attempt to secure access to these resources amid intensifying competition with China. Drawing from trade statistics, foreign investment trends, and institutional strategies, the study assesses the EU’s renewed interest in Latin America through the Global Gateway and the Win-Win Partnership frameworks. While China's economic footprint in the region is deeply entrenched through its South-South cooperation model, the EU seeks to reposition itself as a viable partner by leveraging environmental and governance standards. The analysis identifies key minerals—particularly lithium, copper, and lead—where dependency and vulnerability are highest, and where strategic diversification is urgently needed. Ultimately, the paper argues that the EU’s success will depend on its ability to implement a more flexible and pragmatic strategy, balancing its normative approach with tangible development outcomes for Latin American partners. |
| Keywords: | geopolitics; critical raw materials; EU-Latin America; energy transition |
| JEL: | F14 F59 Q34 O13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129191 |
| By: | Kym Anderson |
| Abstract: | China was one of the world’s most important areas of growth in wine demand in the 2010s, accounting for 7% of the world’s wine consumption and 8% of its value of wine imports by 2017. But China’s per capita wine consumption peaked in the mid-2010s, and its wine imports have more than halved since then. As well, the sources of China’s imports of wine have fluctuated considerably over the past two decades, making this a risky market for wine exporters. Certainly the COVID-19 disruption played a role, but between 2019 and 2022 the fall in sales was considerably larger for wine (47%) than for spirits (17%) and beer (9%), such that wine’s share of alcohol consumption in China fell by two-fifths over those three years alone. The article examines reasons behind the dramatic gyrations in this globally important market and their impact on wine-exporting countries and speculates on future trends. |
| JEL: | D12 F13 F14 Q17 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pas:papers:2025-08 |
| By: | Wan, Lu; Zhou, Yanxi; Wang, Ying; Zhao, Tiantian |
| Abstract: | Following the “dual carbon” goals in 2021, which emphasize achieving the carbon peak by 2030 and carbon neutral by 2060, China introduced a “dual circulation” strategy to connect domestic and international trade. Leveraging the quantile regression model, this study examines the impact of green total factor productivity, trade penetration, foreign direct investment, and sustainable finance on carbon emissions (CO2). Furthermore, a mediating model is established from another perspective to discover the mechanism, respectively, testing how trade, foreign direct investment, and sustainable finance affect carbon emissions via green total factor productivity. The findings indicate that green total factor productivity exerts an inverted “U-shaped” effect on carbon emissions within a certain threshold of the total CO2 volume. While the relationship between the green total factor productivity and CO2 becomes a significant “U-shaped” when the total CO2 goes beyond a certain level. Meanwhile, foreign direct investment penetration and sustainable finance contribute positively to carbon emissions reduction, whereas trade penetration notably increases carbon emissions. Transition mechanisms with international cooperation, trade penetration, foreign direct investment penetration, and sustainable finance also affect CO2 through the green total factor productivity channel. As suggested, China should tailor its low-carbon transition strategies, drawing on global insights and considering its unique national development. Broadly, efficiency in the production process and low-carbon transition are preferred (i.e. improved green total factor productivity), which will balance economic development and environmental protection. The adoption and promotion of a consistent framework for sustainable finance are crucial, as they help enterprises in developing countries access more global sustainable finance. This study also notes that participating more in international trade that embodies low-carbon concepts and introducing green foreign direct investment helps developing countries improve resource efficiency and productivity. |
| Keywords: | carbon peak; correlation; green total factor productivity; sustainable finance; trade penetration |
| JEL: | F3 G3 |
| Date: | 2025–12–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129148 |
| By: | Alves, Ana Cristina; Alden, Christopher |
| Abstract: | This article explores the intricacies of replicating China’s structural economic transformation through special economic zones (SEZs) in Africa, with a focus on the Eastern Industry Zone (EIZ) in Ethiopia. Combining insights from empirical research and the literature on China’s development model, African SEZs and Chinese economic and trade cooperation zones (ETCZs) in Africa, we contend that while static industrialisation policies can be transposed more readily, the dynamic aspects that underpin China’s model face challenges due to differences in institutional capacity and contextual synergies (internal and external). This hampers the efficacy of ETCZs in steering structural economic transformation. The article advocates for a more creative adaptation process, urging dynamic learning and leadership level innovation to address institutional and structural weaknesses while reducing vulnerability to externalities. |
| Keywords: | China-Africa; economic zones; Chinese model emulation; industrialisation challenges; policy adaptation; African economic transformation; EIZ Ethiopia |
| JEL: | O10 |
| Date: | 2024–04–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:121446 |
| By: | Carattini, Stefano; Huang, Hanwei; Pisch, Frank; Singh, Tejendra Pratap |
| Abstract: | Although the environmental impact of trade has been a long-standing concern, there is still only scant evidence on the channels through which international market access affects pollution. In this paper, we exploit the unique episode of China's world market integration in the early 2000s to provide direct empirical evidence on three such mechanisms. We combine granular satellite data on air pollution with detailed information on manufacturing firms and coal power plants, and leverage exogenous foreign demand shocks for identification. Three main findings emerge: exporting firms reduce local pollution (scope-1); pollution levels around coal power plants rise due to regional export shocks (scope-2); and upstream suppliers reduce pollution in the face of export demand shocks to downstream firms (scope-3). Our findings point to China's reliance on coal power plants to fuel its export-driven growth as one of the main drivers of the rise in pollution. |
| Keywords: | Trade, pollution, satellite, supply chain, coal power plants, electricity |
| JEL: | D22 F18 F64 H23 Q53 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:usg:econwp:2025:04 |
| By: | Ke Wang; Dongmin Yao; Xin Ye; Mingyang Pei |
| Abstract: | While ride-hailing services offer increased travel flexibility and convenience, persistent nighttime safety concerns significantly reduce women's willingness to use them. Existing research often treats women as a homogeneous group, neglecting the heterogeneity in their decision-making processes. To address this gap, this study develops the Latent Class Integrated Choice and Latent Variable (LC-ICLV) model with a mixed Logit kernel, combined with an ordered Probit model for attitudinal indicators, to capture unobserved heterogeneity in women's nighttime ride-hailing decisions. Based on panel data from 543 respondents across 29 provinces in China, the analysis identifies two distinct female subgroups. The first, labeled the "Attribute-Sensitive Group", consists mainly of young women and students from first- and second-tier cities. Their choices are primarily influenced by observable service attributes such as price and waiting time, but they exhibit reduced usage intention when matched with female drivers, possibly reflecting deeper safety heuristics. The second, the "Perception-Sensitive Group", includes older working women and residents of less urbanized areas. Their decisions are shaped by perceived risk and safety concerns; notably, high-frequency use or essential nighttime commuting needs may reinforce rather than alleviate avoidance behaviors. The findings underscore the need for differentiated strategies: platforms should tailor safety features and user interfaces by subgroup, policymakers must develop targeted interventions, and female users can benefit from more personalized risk mitigation strategies. This study offers empirical evidence to advance gender-responsive mobility policy and improve the inclusivity of ride-hailing services in urban nighttime contexts. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.10951 |
| By: | Leo Yang Yang; Yiqing Xu |
| Abstract: | We examine the behavioral effects of a user location disclosure policy implemented by Sina Weibo, China's largest microblogging platform, using a high-frequency dataset of uncensored user engagement, including tens of thousands of comments, on 165 prominent government and media accounts. Exploiting the platform's abrupt rollout of IP-based location tags on April 28, 2022, we compare user behavior in comment sections before and after the policy change. Although the policy was publicly justified as a measure to curb misinformation and counter foreign influence, we find no decline in participation by overseas users. Instead, it significantly reduced domestic engagement with local issues outside users' home provinces, particularly among critical comments. Evidence suggests this effect was not driven by generalized fear or concerns about credibility, but by a rise in regionally discriminatory replies that increased the social cost of cross-provincial engagement. Our findings indicate that identity disclosure tools can produce unintended consequences by activating existing social divisions in ways that reinforce state control without direct censorship. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.03238 |
| By: | Liyuan Cui; Wenyuan Li |
| Abstract: | This paper investigates optimal investment and insurance strategies under a mean-variance criterion with path-dependent effects. We use a rough volatility model and a Hawkes process with a power kernel to capture the path dependence of the market. By adding auxiliary state variables, we degenerate a non-Markovian problem to a Markovian problem. Next, an explicit solution is derived for a path-dependent extended Hamilton-Jacobi-Bellman (HJB) equation. Then, we derive the explicit solutions of the problem by extending the Functional Ito formula for fractional Brownian motion to the general path-dependent processes, which includes the Hawkes process. In addition, we use earthquake data from Sichuan Province, China, to estimate parameters for the Hawkes process. Our numerical results show that the individual becomes more risk-averse in trading when stock volatility is rough, while more risk-seeking when considering catastrophic shocks. Moreover, an individual's demand for catastrophe insurance increases with path-dependent effects. Our findings indicate that ignoring the path-dependent effect would lead to a significant underinsurance phenomenon and highlight the importance of the path-dependent effect in the catastrophe insurance pricing. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.15355 |
| By: | Hanming Fang; Ming Li; Jia Xiang |
| Abstract: | This paper investigates how physicians adjust their clinical decision-making following medical malpractice lawsuits and how these responses are driven by mental rather than financial costs, and do not align with rational expectations. We combine a comprehensive health insurance claim database from a Chinese city with the universe of malpractice lawsuits to study changes in physician behavior and patient outcomes. We find that physicians respond to lawsuits by practicing more conservatively, rejecting high-risk patients, reducing surgery rates, and increasing the use of diagnostic tests and traditional Chinese medicine. These changes are associated with worse patient outcomes, consistent with defensive medicine. The effects are not limited to the directly involved departments but spill over to other departments within the same hospital. In addition, the changes are short-lived, with physicians reverting to their pre-lawsuit treatment patterns in eight weeks. We provide evidence that such responses are likely driven by mental cost (including fear) and deviate from rational expectations. First, physicians in hospitals with more and less frequent lawsuits exhibit similar responses to a new lawsuit; moreover, they respond similarly to winning and losing cases. Second, physicians’ reactions to a patient’s death vary depending on the recency of a salient lawsuit. Lastly, physician responses are especially strong following criminal violence against physicians, which is emotionally and psychologically salient. |
| JEL: | I11 I12 P36 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34115 |