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on China |
| By: | Akira Kohsaka (Osaka School of International Public Policy, The University of Osaka) |
| Abstract: | This paper examines China’s industrial structural transformation over the past several decades, comparing it with Japan, Korea and the US. Using expanded sets of international comparable databases, we decompose aggregate productivity growth into sectoral productivity growth and inter- sector resource reallocation. Our findings reveal notable trend changes in labor shares across sectors with significant time differences, earlier de-industrialization in the US and latest industrialization in China. Notably, in the US, manufacturing has lagged behind trade, finance and business services in labor share, and ICT in productivity for years. In contrast, in China, while these service sectors remain minimal in labor share, their relative productivities surpass those of manufacturing. Despite her remarkable productivity growth, significant gaps persist in all sectoral productivity levels between China and the others. We explore how fast these gaps could be narrowed by current sectoral productivity growth trends. |
| Keywords: | structural transformation, productivity growth, reallocation, growth decomposition, China |
| JEL: | O47 O57 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:osp:wpaper:26e002 |
| By: | Larsen, Mathias |
| Abstract: | This policy brief describes the key state-led policies China has enacted to steer capital towards a green transition and draws out lessons for other countries, particularly emerging markets and developing economies (EMDEs). |
| Keywords: | battery technology; central banks; China; EMDEs; green transition; renewables; solar; state owned enterprises; state policies; wind |
| JEL: | N0 F3 G3 |
| Date: | 2026–01–26 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137523 |
| By: | Ignacio Banares-Sanchez; Robin Burgess; Dávid László; Pol Simpson; John Van Reenen; Yifan Wang |
| Abstract: | Do industrial policies that promote clean energy offer a “ray of hope”, increasing a country’s growth and welfare, whilst simultaneously reducing carbon emissions? We study the impact of Chinese solar subsidies whose implementation by city-regions went alongside massive expansion of the sector and a dramatic fall in global solar prices. We construct new city and firm panel data on solar policies, patenting and output. Using synthetic-difference-in-differences 2004-2020, we find production and innovation subsidies were more effective than demand-side (installation) subsidies in generating large and persistent increases in local innovation, net entry, production and exports. Demand policies did, however, reduce local pollution. To examine aggregate effects, we build and structurally estimate a quantitative spatial model with endogenous innovation and heterogeneous productivity across firms and cities, which accounts for business stealing and knowledge spillovers. Counterfactual analysis shows that: (i) local effects remain substantial at the macro level explaining 40%-50% of the aggregate changes in solar innovation, prices and revenues; (ii) social benefits to Chinese citizens exceed subsidy costs by 65% (and double this when environmental benefits are included); and (iii) although all subsidy types increase welfare, innovation subsidies are the most cost-effective. |
| JEL: | H25 L25 L5 L52 N5 O31 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34893 |
| By: | James J. Heckman (University of Chicago and IZA and also NBER); Haihan Tian (The University of Chicago); Zijian Zhang (Columbia University); Jin Zhou (City University of Hong Kong) |
| Abstract: | Dynamic complementarity is the concept that past investments that lead to higher stocks of skill at one age promote the growth of skills from investment at that age. We define and provide evidence on dynamic complementarity using unique Chinese data from a home visiting program for young children targeted to parents in rural China. In addition, we investigate growth in learning due to innate, parental, and environmental factors that occur in the absence of any formal intervention. |
| JEL: | C1 C5 D83 J01 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:bfi:wpaper:2026-31 |
| By: | Julia Manso |
| Abstract: | Upon taking office in late 2012, Chinese President Xi Jinping launched one of the most intensive anticorruption campaigns in the history of the People's Republic of China. Prior to the campaign, China's land market suffered from corruption, particularly surrounding sale method selection (auction versus listing). Listing is a two-stage sale mechanism that prior research has identified as more susceptible to corruption, leading to lower prices. This paper examines the campaign's impact on land allocation, focusing on whether corruption influences the choice of sale method and, in turn, land sale prices. This paper is the first to utilize Blackwell and Yamauchi (2021, 2024)'s marginal structural model with fixed effects in the inverse probability of treatment weighting model; absorbing time-invariant unobserved confounding and utilizing a set of time-varying covariates as controls, this model can estimate causal effects in the land sale case. I find that indictments in a prefecture cause a statistically significant drop in the probability that land is sold via listing$\unicode{x2014}$an effect that is further compounded when indictments occur in consecutive months. Sensitivity analyses indicate that any violations of the identification assumptions would bias estimates towards zero, confirming the negative effect. A second marginal structural model shows that both mean and median land sale prices increase in the presence of indictments. Together, these results suggest that the anticorruption campaign not only deterred actual corrupt allocation practices, but also impacted the discretionary use of listings. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.00291 |
| By: | Liu, Xinwei |
| Abstract: | This policy insight explores China’s role in promoting the implementation of the Kunming-Montreal Global Biodiversity Framework (GBF). While the nation’s domestic policies and progress in biodiversity conservation, as well as its influence in global climate action, have been widely explored, its potential for supporting global efforts in the fight against biodiversity loss has so far been neglected. With the trend towards biodiversity loss and its impacts intensifying, at the 15th meeting of the Conference of the Parties to the Convention on Biological Diversity (Biodiversity COP15) in Montreal, Canada, in 2022, the international community reached consensus on halting and reversing nature loss by 2030 under the GBF. However, national commitments and actions since then have fallen far short of halting the crisis, and growing geopolitical fragmentation, weakening multilateral cooperation and recent setbacks in international environmental governance have further widened this gap. Within this global landscape, China is emerging as a ‘great power’ in biodiversity. With its vast territory, China houses a rich array of species and ecosystems. Through its overseas infrastructure projects and investments, as well as its large demand for natural resources from abroad, China’s influence on biodiversity reaches far beyond its borders. Since adopting the GBF, China has actively translated the global commitments into national action and has achieved outstanding tangible outcomes. As the presidency of Biodiversity COP15 and subsequently, China has demonstrated a strong capacity in shaping global environmental politics, from initiating agendas and coordinating efforts to building consensus and promoting action. As the world fears another decade of failure on biodiversity and urgently seeks leadership to advance the GBF, China stands in a position to take a lead on and further enhance its influence in international environmental governance. |
| Keywords: | belt and road initiative; biodiversity; biodiversity conservatiaon; China; GBF; green BFI; green finance; green technology; innovation; Kunming-Montreal Global Biodiversity Framework COP16; nature loss |
| JEL: | N0 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137521 |
| By: | Ralph Ossa; Stephen J. Redding |
| Abstract: | A central insight from neoclassical economics is that international trade operates like an improvement in production technology. It generates mutual aggregate welfare gains for countries as a whole, but creates winners and losers within countries. Tariffs are a tax on this trading technology and distort the prices faced by domestic consumers and producers. Large countries can use tariffs to improve their terms of trade on world markets. But if all countries try to do so, they can end up with lower welfare than if they cooperated to liberalize trade. Tariffs can be used to redistribute income between the winners and losers from trade within countries. But there can be other more efficient ways to achieve redistribution. Policies to promote economic activity in critical industries can be rationalized based on externalities or national security. But these arguments typically rationalize targeted policies towards those industries and tariffs can be dominated by other policy interventions. Empirical findings from the recent waves of U.S. tariffs suggest that most of the incidence of these tariffs has been borne by U.S. importers, wholesalers, retailers and consumers rather than by foreign exporters. These tariffs have led to a large-scale reorganization of U.S. supply chains away from China to third countries. Although this reorganization has substantially reduced China's share of U.S. imports, the U.S. remains indirectly exposed to China through the imports of these third countries. |
| JEL: | F13 F14 F15 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34915 |
| By: | Robin Kaiji Gong; Yao Amber Li; Stephen Teng Sun; Shang-Jin Wei |
| Abstract: | While finance theory distinguishes the roles of equity and debt in supporting firm growth, their differential impacts on international trade remain underexplored. This study provides the first empirical analysis of how access to equity financing affects firm exports. We leverage the unique institutional setting in China, where initial public offerings (IPOs) require stringent regulatory approval, ensuring that only qualified firms advance to the final review stage. Our empirical strategy compares the export performance of successful IPO applicants with that of “near misses"—applicants rejected at the final review meetings. To sharpen identification, we utilize meeting records to exclude rejections citing concerns about future revenue growth or profitability risks, as these may entail unobserved shocks to export performance. Our cohort based difference-in-differences analysis reveals that IPO approval leads to a significant annualized increase of more than 6% in firm exports over the subsequent six years. Distinct from previous findings on debt financing, IPO approval primarily affects the extensive margin, enabling firms to expand into more destination-product markets. Mechanism tests suggest that IPOs enhance exports by financing intangible investments and fostering risk-taking activities. |
| JEL: | F1 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34906 |
| By: | Guanie Lim (National Graduate Institute for Policy Studies, Tokyo, Japan); Allan Nylander (Independent Analyst, Sweden) |
| Abstract: | This paper examines the rise, struggle, and evolving trajectory of Chinese ownership in European football. The analysis is situated within broader debates on late development, outward foreign direct investment, and the political economy of global sport. Through comparative analysis, the paper distinguishes between less successful cases and more sustainable ones, highlighting the institutional, financial, and political constraints that shaped these divergent outcomes. It also discusses the likely fate of Chinese owners in an era of extreme financialization and specialization, in addition to suggesting implications for future studies. |
| Keywords: | Football, Foreign Direct Investment, Sovereign Wealth Funds, Economic Development, Europe, China |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ngi:dpaper:25-13 |
| By: | Xu, Lei (Loughborough University); Zhu, Yu (University of Dundee) |
| Abstract: | We apply a novel approach to estimate the effects of exposure to peers with different attributes by using the predetermined leave-own-out attributes of all classmates in randomly assigned classes. This strategy allows a behavioural interpretation of the peer effect over and above the pure mechanical channel. We find that being exposed to peer groups with attributes conducive to academic achievements, induced by random variations in the shares of classmates with college-educated parents, increases exam scores. We show that estimates based on the commonly used leave-own-out measures are highly sensitive to sample selection bias arising from non-random tracking in the sample. We show that estimates based on the commonly used leave-one-out measures are highly sensitive to non-random tracking in the sample. |
| Keywords: | parental education, random assignment, China |
| JEL: | I20 I24 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18416 |
| By: | Bahaj, Saleem; Reis, Ricardo |
| Abstract: | While the USD dominates cross-border transactions today, a few other currencies are also used internationally. This paper shows that central bank policies that reduce the volatility of borrowing costs for foreign firms in domestic currency can trigger a jumpstart of the currency’s international status, because firms’ choices of the currency of their working capital complement their sales invoicing. Empirically, the creation of swap lines by the People’s Bank of China between 2009 and 2018 supports this theoretical claim. Signing a swap line with a country is associated with an increase in the probability that the country would use the RMB at all by 12%, and a four-fold increase in the value of the country’s RMB payments. |
| Keywords: | lender of last resort; internationalization; dollar dominance |
| JEL: | E44 E58 F33 F41 G15 |
| Date: | 2026–02–27 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:128001 |
| By: | J. Lu Jin; X. Lai Xiaopeng; L. Wang (Audencia Business School); K. Wang Kunyi |
| Abstract: | While prior literature has emphasized that coopetition is a critical strategic choice that can enhance a firm's competitive advantage, the antecedents and consequences of the strategy in the international context remain underexplored. Based on the relational view, this study examines whether resource complementarity and goal compatibility foster coopetition between foreign and local partners in international joint ventures (IJVs) and in turn improve performance outcomes.Drawing on the empirical analyses of coopetition between partners in 165 IJVs in China, this study finds that partner resource complementarity and partner goal compatibility are positively associated with coopetition, which in turn correlates with improved IJV performance.Institutional and industrial environments are associated with the effectiveness of resource complementarity and goal compatibility. These findings offer valuable insights for IJV managers seeking to manage cooperation and competition between partners. |
| Keywords: | Market competition, Legal inadequacy, Goal compatibility, Resource complementarity, International joint venture, Coopetition, Coopetition International joint venture Resource complementarity Goal compatibility Legal inadequacy Market competition, CoopetitionInternational joint ventureResource complementarityGoal compatibilityLegal inadequacyMarket competition |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05460936 |
| By: | Yan Bai; Dan Lu; Xu Tian; Yajie Wang |
| Abstract: | This paper reassesses the role of financial frictions in capital misallocation through a model disciplined by both firm-level borrowing costs and the average revenue product of capital (ARPK). Using Chinese manufacturing data, we document substantial dispersion in ARPK, alongside a strong positive relationship between ARPK and the borrowing costs firms face---patterns absent in U.S. data. We develop a heterogeneous-firm model with endogenous firm-specific borrowing costs and additional capital distortions modeled as exogenous wedges. In this model, eliminating financial frictions raises total factor productivity (TFP) by 25 percentage points. In contrast, without other capital distortions, removing financial frictions increases TFP by less than 2 percentage points. The stark difference arises from the interaction between financial frictions and permanent firm-level distortions, which generate endogenous financial heterogeneity and selection, making productive firms the most constrained. Our findings suggest that financial frictions can be highly distortionary when other sources of misallocation are present. |
| JEL: | E2 F3 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34930 |
| By: | Jeffrey W. Lockhart; Jamshid Sourati; Feng Shi; James Evans |
| Abstract: | How nations shape the scientific frontier matters for technological competition, but standard metrics, including publication counts, citations, and disruption indices, look backward and fail to distinguish between fundamentally different leadership strategies. We develop and validate two forward-looking model-based measures and apply them to tens of millions of articles since 1990. The first embeds research pathways within an evolving hypergraph of concepts and scientists to identify leadership in emerging areas--work that anticipates where the scientific crowd is heading. The second embeds evolving samples of ideas and disciplines drawn upon in past research to identify leadership in surprising new directions as unexpected combinations become routine and science reorganizes around them. China became the global leader in emerging areas roughly a decade ago, well before it led in volume, reflecting a capacity to detect and amplify nascent consensus at scale. The United States and Europe show the opposite profile: declining emergence shares but persistent leadership in prescient work, especially research bridging disciplinary boundaries. These patterns replicate across databases, attribution methods, and strategic domains, including AI, biotechnology, energy, and semiconductors. Nations lead science by reading the landscape or by reshaping it, and the institutional requirements for each strategy lie in tension. The distribution of these strategies promises to shape the global structure of technological leadership for decades. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.01117 |
| By: | Hiroyuki Kasahara; Weina Zhou |
| Abstract: | Selective mortality and fertility issues are persistent challenges in estimating the fetal origin effect, with attempts to address these issues being notably scarce. Evidence further suggests that selective mortality is more pronounced in males than in females. This study investigates the causal effects of prenatal exposure to the Great Chinese Famine on educational attainment by addressing gender-specific selection bias. We compare exposed individuals with their unexposed, same-gender siblings, using a famine intensity measure based on county-year level excess death rates. Our findings reveal remarkably similar consequences for both genders: on average, famine exposure increased illiteracy rates by 4 percentage points and decreased years of schooling by 0.3 years for both males and females. These results contribute to our understanding of the long-term impacts of prenatal malnutrition, while accounting for gender-specific selection biases. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.01496 |