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on China |
| By: | Anderson, Ronald W. |
| Abstract: | Since 1978, China has developed strongly using a particular form of capitalism that has relied on close relations between private enterprise and the state, and the continuing presence of state-owned enterprises, both centrally and at local levels. This model has been criticised as being responsible for the rapid rise of debt since 2010, and more recently for the slowdown of growth. I assess the challenges to China’s stated growth ambitions, emphasising the demographic factors that vary across regions. Using examples at the regional and local levels, I illustrate the workings of this system and highlight the challenges for adapting it to support China’s growth ambitions for the coming decades. The conclusion is that China’s public-sector development can no longer be financed principally through land sales, and Chinese savers will need to shift away from real estate and redirect their investments toward equities and other capital-market vehicles. |
| Keywords: | debt overhang; enterprise reform; infrastructure; local public finance; state capitalism |
| JEL: | F3 G3 J1 |
| Date: | 2025–06–30 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137731 |
| By: | Oscar Claveria (AQR-IREA, Universitat de Barcelona, Spain.); Mihály Tamas Borsi (IQS School of Management, Universitat Ramon Llull, Spain.) |
| Abstract: | This paper examines trade relations between China and the European Union from 2000 to 2022, focusing on the role of trade policy uncertainty alongside key economic and institutional factors. Using an extended gravity model, the results show that China’s economic growth is a dominant driver of trade flows. The study introduces a novel proxy for China’s trade policy uncertainty, finding that it significantly influences bilateral trade. Results are robust to different specifications. Additionally, the results indicate that while non-eurozone EU countries demonstrate higher trade flows with China, the immediate impact of China’s Belt and Road Initiative on EU trade remains limited. Given the anticipatory nature of trade policy uncertainty and its relationship with economic growth, the findings highlight the usefulness of trade uncertainty indicators as tools for the early detection of shifts in trade patterns, offering valuable insights for policymakers to design strategies that promote greater stability and economic integration. |
| Keywords: | International Trade; Economic Growth; Uncertainty; China; European Union; Gravity Model. JEL classification: C33; F13; F14; O24. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:ira:wpaper:202512 |
| By: | Lerner, Josh (Harvard University and NBER); Liu, Junxi (University of Warwick); Moscona, Jacob (MIT); Yang, David Y. (Harvard University, BREAD, J-PAL and NBER.) |
| Abstract: | Global innovation and entrepreneurship have traditionally been dominated by a handful of high-income countries, especially the US. This paper investigates the international consequences of the rise of a new hub for innovation, focusing on the dramatic ascent of high-potential entrepreneurship and venture capital in China. First, using comprehensive global data, we show that as the Chinese venture industry rose in importance in certain sectors, entrepreneurship increased substantially in other emerging markets. Using a broad set of country-level economic indicators, we find that this effect was driven by country-sector pairs most similar to their counterparts in China. The estimates are similar when exploiting Chinese sector-specific policies that affected the likelihood of entrepreneurship. Second, turning to mechanisms, we show that the baseline findings are driven by local investors and by new firms that more closely resemble existing Chinese companies. Third, we find that this growth in emerging market investment had wide-ranging economic consequences, including a rise in serial entrepreneurship, cross-sector spillovers, innovation, and broader measures of socioeconomic well-being. Together, our findings suggest that many developing countries benefited from the more “appropriate” businesses and technology that resulted from a rise of an innovation hub in an emerging economy. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:warwec:1608 |
| By: | Panle Jia Barwick; Hongyuan Xia; Tianli Xia |
| Abstract: | This paper examines China’s transition from pharmaceutical “free rider” to global innovator over the last decade. In 2010, China accounted for less than 8% of global clinical trials; by 2020, it had surpassed the US in annual registered clinical trial volume. To study this transformation, we compile a comprehensive, synchronized database spanning the pharmaceutical drug development supply chain, covering scientific publications, clinical trials, drug development milestones for China, the U.S., and Europe, alongside drug sales and government policies over the same period. We provide strong evidence that China’s rise was primarily driven by the National Reimbursement Drug List (NRDL) reform, which dramatically expanded the effective market size for innovative drugs. We document a sharp rise in both the quantity (86% increase) and novelty of drug trials post reform, with growth concentrated in reform-exposed disease categories, first- or best-in-class drugs, and among domestic firms. A decomposition exercise reveals that the NRDL reform accounts for 43% of the growth in oncology trial activity, nearly doubling the combined contribution of upstream knowledge accumulation and talent flows (24%), while other government policies play a minor role. Finally, dynamic gains from induced innovation exceed the reform’s static gains in consumer access to innovative drugs by threefold, underscoring the importance of accounting for the reform’s long-run effects on innovation incentives in addition to near-term improvements in drug affordability. |
| JEL: | I18 L65 O31 O38 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34977 |
| By: | Debin Ma (Fudan University); Jared Rubin (Chapman University); Weiwen Yin (University of Macau) |
| Abstract: | This paper revisits the old thesis of the contrasting paths of modernization between Japan and China. It develops a new analytical framework regarding the role of knowledge acquisition (propositional vs. prescriptive) and political centralization as the key drivers behind these contrasting paths. Our model and historical data highlight how the introduction of these elements contributed to Meiji Japan’s decisive turn towards the West and Qing China’s lethargic response to Western imperialism. Our analytical framework, developed from a comparative historical narrative and quantitative data, sheds new light on the importance of knowledge acquisition in enabling developing countries to reach the world’s economic frontier. |
| Keywords: | propositional knowledge, prescriptive knowledge, China, Japan, economic development, economic divergence, Meiji Reform, centralization, decentralization |
| JEL: | P52 N45 N40 Z10 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:chu:wpaper:26-04 |
| By: | Takagi, Shinji |
| Abstract: | We explore a phenomenon observed during the Second Sino-Japanese War in which the value of the Japanese yen in Shanghai fell below the official rate. Shanghai provided a parallel market in which yen could be traded indirectly against British pounds through the intermediation of the Chinese yuan. The implied yen-pound rate was broadly approximated by purchasing power parity (PPP) before a significant divergence from PPP emerged in favour of the pound. This likely reflected negative news that signalled, among other things, a prospective withdrawal of Japanese yen as occupation money, which meant that the parallel market would close. |
| Keywords: | China during the Second Sino-Japanese War, parallel foreign exchange market, occupation currency, Japanese occupation currency in China, Sino-Japanese War |
| JEL: | F31 F33 E42 N25 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:agi:wpaper:02000262 |
| By: | Zhiguo He; Zehao Liu; Xinle Pang; Yang Su; Kunru Zou |
| Abstract: | Collateral constraints limit household migration to expensive locations by restricting financing for home purchases. Such endogenous location choice amplifies the impact of relaxing household borrowing constraints. Using China’s cash-based shantytown renovation program (2015-2018) as a natural experiment, we provide evidence that cash resettlement—by converting illiquid shanty houses into cash—facilitated household location upgrading and raised house prices in more expensive locations. A dynamic spatial model with collateral constraints confirms household migration responses to the cash transfer. Quantitatively, endogenous migration amplifies household housing expenditure responses by around 40%, and is able to explain more than 20% of the housing price growth in 2016-2020. |
| JEL: | D15 D50 G0 R0 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34982 |
| By: | Ziaba, Isaac Haruna; Aidoo, Richard |
| Abstract: | How do state and non-state competing economic actors and interests interact over mineralised land disputes? This research inductively shows how land-use disputes between large-scale mining (LSM) companies and artisanal and small-scale miners (ASM) are intervened by the African state. We explore a grounded theory of Sino-African neopatrimonialism to contend that collusions between Chinese clients and ‘uninsulated’ African patrons can unleash a powerful cartel that illegitimately allocates resources to Chinese companies, resulting in forced eviction of competing local entrepreneurs. In illustrating this abstraction with the Ghanaian case, we show that African patrons intervene in resource disputes between Chinese clients and African miners by setting up asymmetric structures and deploying coercive bureaucratic instruments that negotiate Chinese clients’ unfettered access to mineral resources while compelling dissenting ASM into capitulation to guarantee private rent accrual to elites. The findings demonstrate how African patrons device approaches such as forced eviction as a political means to their economic end, and the resultant local popular fury to offer a contextualisation of the growing China-Africa discourse. |
| Keywords: | Africa; Ghana; China; mining; ASM; Sino-African neopatrimonialism; elite clientelism |
| JEL: | R14 J01 |
| Date: | 2026–03–20 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137719 |
| By: | He; Z.;; Huynh, L.D.T.; |
| Abstract: | This paper leverages China's 2006 housing reform and a non-parametric Regression Discontinuity Design (RDD) to identify the causal impact of housing wealth on health and healthcare spending across age groups. We document a rich series of findings. A positive housing wealth shock leads to an increase in out -of-pocket medical expenses of the elderly and children, at both the extensive and intensive margins, thereby improving their health. These effects differ across age cohorts, highlighting how positive wealth shocks are translated into health improvements through both direct spending and private insurance uptake. In contrast, these health effects are not evident among young adults. Overall, these results indicate that wealth shock reduces health inequality within vulnerable households. The underlying mechanisms also differ by age group:a pure wealth effect for the elderly, precautionary savings incentives for younger adults, and inter-generational investments for children. |
| Keywords: | housing wealth; medical expenditure; health; China; age differences; |
| JEL: | G51 I11 I14 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:yor:hectdg:26/04 |
| By: | Ricardo Martinez; Juan D. Moreno-Ternero |
| Abstract: | We study the design of fair allocation rules for the abatement of riparian pollution. To do so, we consider the so-called river pollution claims model, recently introduced by Yang et al. (2025) to distribute a budget of emissions permits among agents (cities, provinces, or countries) located along a river. In such a model, each agent has a claim reflecting population, emission history, and business-as-usual emissions, and the issue is to allocate among them a budget that is lower (or equal) than the aggregate claim. For environmental reasons, the specific location along the river where pollutants are emitted is an important concern (the more upstream the location is the higher the damage of polluting the river). We characterize a class of geometric rules that adjust proportional allocations to compromise between fairness and environmental concerns. Our class is an alternative to the one proposed by Yang et al. (2025). We compare both alternatives through an axiomatic study, as well as an illustration for the case study of the Tuojiang Basin in China. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.04345 |
| By: | Tadashi ITO; Kiyoyasu TANAKA |
| Abstract: | This paper examines whether the EU’s 2022 embargo on Russian crude and refined oil unintentionally encouraged “oil laundering” through third‑country refiners. After the ban, Russian crude prices fell, creating strong incentives for countries such as China, India, Turkey, Singapore, and the UAE to purchase discounted Russian oil, refine it, and legally re‑export the resulting petroleum products to the EU. Using a gravity‑model framework and event‑study analysis, we show sharp and synchronized shifts in trade flows: Russian crude exports to laundromat countries surged dramatically after 2022, while EU imports of refined products from these same countries rose significantly in 2023 and 2024. These patterns suggest that Russian oil entered the EU indirectly through third‑country refining. China and India appear to be the primary intermediaries. In contrast, other sanctioning countries such as the U.S., Canada, Australia, and Japan show no similar increase, and EU members exempt from the embargo also display no laundering‑related import changes. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:26024 |
| By: | Vespignani, Joaquin (Tasmanian School of Business & Economics, University of Tasmania); Smyth, Russell (Department of Economics, Monash University, Clayton, Australia); Saadaoui, Jamel (University Paris 8, IEE, LED, Saint-Denis, Franc); Wang, Yitian (Department of Economics, Monash University, Clayton, Australia) |
| Abstract: | We develop novel, stage-specific, geopolitical risk indicators to examine how geopolitical risk is distributed across the supply-chain for lithium and copper, two minerals which are vital for low-carbon technologies. We find that refining is the geopolitical bottleneck for both minerals, reflecting that refining capacity is highly concentrated in China. We examine refining diversification, strategic stockpiling, and AI-driven productivity gains as complementary policy instruments for mitigating exposure to geopolitical risk at the refining stage. We show that reducing China’s refining share substantially lowers refining-stage geopolitical risk, with larger gains for lithium than for copper. We find that stockpiling plays a critical role in buffering near-term geopolitical shocks, but significantly increases the projected shortfall in copper and lithium which is needed to realize the clean energy transition under alternative Net Zero pathways. We demonstrate that AI-driven productivity gains will be needed to narrow the projected supply gaps for both minerals. Our results suggest that ensuring effective security of critical minerals requires a coordinated policy mix, combining refining diversification, strategic stockpiling, and productivity-enhancing technological change |
| Keywords: | Critical Minerals; Copper; Lithium; Geopolitical Risk; Refining bottlenecks; |
| JEL: | C14 Q20 Q41 Q43 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:tas:wpaper:62814634 |
| By: | Shuo Chen (Fudan University); Xinyu Fan (Cheung Kong Graduate School of Business); Luc Renneboog (Tilburg University); Yanfei Yin (University of California at Santa Barbara) |
| Abstract: | Wealth flows of top-notch elites reflect the socioeconomic structural changes of the times. Pareto’s theory of circulation of elites questions whether and how wealth flows from old elites to new ones, from political elites to economic ones, and vice versa. We adopt a novel approach to trace wealth flows of pre-modern social elites by tracking masterpiece artwork ownership dynamics, by means of 42, 948 collection stamps on 8, 555 masterpiece artworks in historical China (from the 8th century Tang dynasty until the fall of the Qing empire in 1911). The masterpieces tended to flow from higher to lower social classes within the same dynasty, whereas dynastic changes, often re-centralized art ownership to top-notch political elites. Wealthy classes without political power increasingly acquired the masterpiece artworks from those with political power, validating the theory of elite circulation in pre-modern societies from a wealth perspective. Masterpieces increasingly flowed from higher to lower social classes in regions with higher social mobility. The results are robust when controlling for political turmoil, governance instability, and social unrest. We advance our understanding of elite mobility and transition between political and economic elites by creating a new method to evaluate wealth flows in pre-modern societies where modern indicators are not available. |
| Keywords: | Ownership, Social Mobility, Governance, Art Masterpiece, Political Power |
| JEL: | N35 D31 P46 O15 G51 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:cue:wpaper:awp-03-2026 |
| By: | Piñeiro, Valeria; Gianatiempo, Juan Pablo; Balana, Bedru; Rueda, Jorge Armando; Glauber, Joseph W. |
| Abstract: | This paper examines how the recent shift in United States tariff policy could reshape global agricultural trade and influence the stability of food systems worldwide. Using the MIRAGRODEP computable general equilibrium model, the analysis evaluates three policy scenarios that reflect the current trajectory of trade tensions: the North America scenario, the Liberation Day tariff package, and a renewed U.S.–China tariff confrontation. The scenario results reveal distinct lessons. The North America scenario shows that deeply integrated regional markets are extremely sensitive to tariff shocks, and even moderate tariff increases within North America lead to significant disruptions in agricultural trade and measurable welfare losses for Canada and Mexico. The Liberation Day scenario demonstrates that unilateral tariff escalation reduces U.S. competitiveness across a wide range of agricultural products and triggers substantial trade diversion toward countries with preferential access, particularly Mexico, which becomes the primary beneficiary of redirected U.S. import demand. The China scenario highlights that renewed U.S.–China tariff escalation produces severe distortions, especially in oilseed markets, as prohibitive tariffs drive China to shift its purchases almost entirely toward South American suppliers, sharply lowering U.S. export prices and fragmenting global supply chains. Across all scenarios, global agricultural trade contracts, supply chains become less efficient, and food systems become more exposed to climate and geopolitical shocks. These findings underscore the need for predictable and coordinated trade policies that limit uncertainty rather than amplify it. Strengthening trade diversification, investing in supply chain resilience, and aligning economic and geopolitical objectives remain essential for safeguarding global food security in an increasingly unstable trade environment. |
| Keywords: | trade; tariffs; food security; food prices; computable general equilibrium models; United States |
| Date: | 2025–11–25 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:ifprid:178193 |
| By: | Yuhao Deng; Le Kang |
| Abstract: | The difference-in-differences (DiD) design is a quasi-experimental method for estimating treatment effects. In staggered DiD with multiple treatment groups and periods, estimation based on the two-way fixed effects model yields negative weights when averaging heterogeneous group-period treatment effects into an overall effect. To address this issue, we first define group-period average treatment effects on the treated (ATT), and then define groupwise, periodwise, dynamic, and overall ATTs nonparametrically, so that the estimands are model-free. We propose doubly robust estimators for these types of ATTs in the form of augmented inverse variance weighting (AIVW). The proposed framework allows time-varying covariates that partially explain the time trends in outcomes. Even if part of the working models is misspecified, the proposed estimators still consistently estimate the parameter of interest. The asymptotic variance can be explicitly computed from influence functions. Under a homoskedastic working model, the AIVW estimator is simplified to an augmented inverse probability weighting (AIPW) estimator. We demonstrate the desirable properties of the proposed estimators through simulation and an application that compares the effects of a parallel admission mechanism with immediate admission on the China National College Entrance Examination. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.04080 |
| By: | Yanli Liu (Department of Economics, Towson University); Kun Li (School of Economics, Sichuan University); Yanchi Zou (School of Economics, Sichuan University) |
| Abstract: | We estimate the labor-market returns to China’s Double First-Class (DFC) initiative using a difference-in-differences design that exploits discipline-level exposure among newly designated universities. Using university-level salary data from 2012-2021, we find that DFC designation increases graduates’ average monthly salaries by approximately 338 CNY. Event-study estimates reveal an immediate post-announcement increase, consistent with signaling, and larger effects for cohorts with longer exposure, suggesting human-capital accumulation. We find no evidence of institution-wide spillovers or effects for graduates who completed their studies prior to the policy announcement. |
| Keywords: | Double-first class initiative, Labor market, Graduate salaries, Signaling, Human capital accumulation. |
| JEL: | I23 J31 D82 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:tow:wpaper:2026-01 |
| By: | Asjad Naqvi (WIFO) |
| Abstract: | This paper introduces a framework that integrates Quadratic Almost Ideal Demand System (QUAIDS) elasticities with the ADB Multi-Region Input-Output (MRIO) database to evaluate the direct and indirect impacts of tariffs on Value Added at the country-sector level. Using the data on USA tariffs imposed in September 2025, results reveal a broad-based contraction in global value added by –0.52 percent, with indirect effects roughly twice as large as direct ones. While, direct effects are concentrated in traded manufacturing sectors such as textiles, chemicals, and machinery, the majority of total losses arise from indirect spillovers into services and infrastructure, including transport, telecommunications, finance, and public spending. Losses are widespread, where more than 90 percent of countries experience declines, with South Asia and North America the most affected, while Europe and East Asia show greater resilience. India (–5.8 percent) and the United States (–3.2 percent) face strong contractions, while China’s large domestic market cushions much of the shock. These findings highlight the systemic nature of tariff shocks and their asymmetric propagation across countries and sectors that factors in structural dependence across the global economy. By embedding non-linear demand responses within a structural MRIO framework, the study provides a transparent, policy-relevant tool for evaluating shocks to global production networks. |
| Keywords: | Quadratic Almost Ideal Demand System (QUAIDS), Multi-Regional Input-Output (MRIO), Tariffs, Production networks, Indirect impacts |
| Date: | 2026–03–18 |
| URL: | https://d.repec.org/n?u=RePEc:wfo:wpaper:y:2026:i:723 |