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on China |
| By: | Chowdhry, Sonali; Erhardt, Katharina; Hinz, Julian |
| Abstract: | * China's export growth is increasingly concentrated in advanced manufacturing sectors. Over the past two decades, China has expanded its presence not only in traditional industries but also in capital- and technology-intensive products, bringing it into direct competition with advanced economies in sectors where they have long specialized. * Advanced economies have lost market share to China in third markets. Across a wide range of industries, China's gains in market share have been mirrored by losses among advanced economies. The strongest effects are observed in relatively complex manufacturing sectors such as machinery, vehicles, chemicals, and other technology-intensive products. * The impact of Chinese competition differs substantially across countries. Some advanced economies have adapted more successfully to China's rise than others. While Germany, Japan, France, and the United Kingdom experienced significant losses in third markets, countries such as South Korea, Switzerland and the United States have maintained or even improved their position relative to other non-Chinese exporters even as they lose market shares in absolute terms to China's growth. * China's export expansion alone cannot explain all observed losses. For many advanced economies, actual market share declines exceed what would be expected from China's export growth alone. This suggests that part of the deterioration reflects a loss of competitiveness relative to other exporters rather than displacement by China alone. * Germany stands out as particularly exposed. Germany's export structure overlaps strongly with China's and it experienced some of the largest absolute losses in third markets. However, only around one-third of Germany's market share decline can be mechanically attributed to China's expansion, indicating that domestic and European competitiveness challenges also play an important role. |
| Keywords: | China, export competition, third markets, China, Exportwettbewerb, Drittmärkte |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkpb:341641 |
| By: | Jiani Gao; Min Sun Park; Solomon Polachek |
| Abstract: | This paper examines the impact of exemptions to China's 1979 One-Child Policy on fertility and the spousal age gap. The exemptions, implemented at different times across provinces, created exogenous variation that we exploit using a staggered Difference-in-Differences design. Our analysis uses the 2010 China Family Panel Studies and focuses on couples with rural hukou status, who were most affected by these exemptions during the study period. We find that the exemptions led to a 32% increase in fertility, consistent with the policy's pro-natalist intent. We also observe a 25% increase in the spousal age gap, likely driven by the increased demand for fertility following the policy change. These effects run counter to the broad international trend over this period, in which fertility rates have generally declined and spousal age gaps have narrowed. We additionally find suggestive evidence that the exemptions are associated with a more traditional household division of labor, with possible implications for the gender wage gap. |
| Keywords: | China, One-Child Policy exemptions, Fertility, Spousal age gap, Household division of labor |
| JEL: | J12 J13 J16 O53 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26165 |
| By: | Hu, Yan (Copenhagen Business School); Maurer, Stephan (UPF Barcelona School of Management) |
| Abstract: | Do minorities benefit from social networks? In this paper, we study this question using the historical example of China’s first modern bureaucratic organization, the Chinese Maritime Customs Service. Drawing on newly digitized personnel records from 1876-1911, we first show that the Chinese clerks employed by the service were predominantly Cantonese. Using the plausibly exogenous transfers of clerks across stations, we then estimate that a non-Cantonese (minority) clerk benefited significantly from meeting at least one colleague from his same province and dialect. Such connections led to faster promotion and a 5.6% salary increase, with even stronger effects when meeting a clerk who was either senior or of high quality. |
| Keywords: | Chinese Maritime Customs Service, social connections, wages, promotion, minorities |
| JEL: | J15 J31 J45 N35 N75 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18689 |
| By: | Raih, Yoan; Luo, Guiliu |
| Abstract: | As China seeks to internationalize the renminbi and EMDEs search for alternative sources of financing, Panda bonds have emerged as a growing funding option. This paper argues that while RMB borrowing can offer advantages over hard-currency debt, headline yields often understate the true cost once credit enhancement and currency risks are considered. Panda bonds have significant potential, but scaling the market will require further regulatory reforms, risk-sharing mechanisms, and stronger participation from multilateral and Chinese policy institutions. |
| Keywords: | Panda bonds; Renminbi (RMB) internationalization; Sovereign debt; Emerging and developing economies (EMDEs); External financing; Currency risk; Chinese bond market; Guarantees |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpm:notfdl:2606 |
| By: | Strömberg, David; Lei, Victor; Wu, Yanhui |
| Abstract: | Using 30 months of panel data on 26, 811 Chinese students in grades 7--12, we study how generative AI affects homework productivity and learning. The data combine monthly closed-book exams, high-school and college entrance exams, and homework scores and completion time across nine subjects. We exploit staggered AI adoption in a difference-in-differences design. AI adoption raises homework scores by 18% and reduces completion time by 30%, but lowers monthly exam scores by 20% within six months. High-stakes entrance-exam scores fall by 18 and 24%, with the full penalty emerging only after about two years. The losses are largest in social science subjects, followed by STEM and languages, and are especially large for junior students, high-achieving students, and boys. The learning losses are concentrated among roughly 80% of AI users whose behavior is consistent with homework outsourcing, as indicated by exceptionally short homework completion time coupled with high homework scores. AI users who maintain similar homework completion time as non-AI users experience small learning losses. |
| Keywords: | Generative AI; Education; Human capital accumulation; China shock |
| JEL: | O15 I20 O33 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21577 |
| By: | Behnaz Minooei Fard; Giovanni Di Bartolomeo; Willi Semmler |
| Abstract: | This study analyzes the dynamics of the global rare earth element (REE) market, with a focus on China's dominant role as the primary supplier, which is crucial for the energy transition and digitalization. Using a game-theoretic approach, the research examines a potential duopoly market structure that may emerge over time, as well as potential shifts in supply from China to other countries in this scenario. It considers China's low marginal costs and factors like resource extraction and discoveries. Additionally, the study examines the strategic market interactions, the role of technological advancements, and policy support in shaping market outcomes. The methodology incorporates the assumption that agents have limited foresight and use a learned value function to strategically assess outcomes based on their own and others' actions while accounting for environmental constraints. |
| Keywords: | Rare earth elements, Game theory, Duopoly, Known reserves dynamics, Policy support, Relative scarcity, NMPC, Reinforcement learning |
| JEL: | C61 C7 Q3 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:ter:wpaper:00184 |
| By: | Christopher Clayton; Matteo Maggiori; Jesse Schreger |
| Abstract: | Great powers, like the United States and China, use existing trade and financial linkages of their economies to the rest of the world to exert geoeconomic power. The targeted entities include both foreign governments and foreign private firms. We characterize conditions under which a hegemonic country optimally targets private entities or their government in a given targeted foreign country. An advantage of coercing private entities is that they internalize less than their own government the equilibrium consequences of acquiescing to the hegemon's coercion. This allows the hegemon to build its power by exploiting the difference between the private cost to the targeted entity of the costly actions it demands and the social value to the hegemon of those actions. Coercing the government gives up some of this advantage, but offers the ability of having the targeted government potentially influence firms in its domestic economy that the hegemon finds valuable to coerce but for which it had limited direct coercive power. The relative strength of these two channels determines the optimal mix of coercion targeted at private entities and governments. |
| JEL: | F1 F30 G1 H10 P0 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35343 |
| By: | Ge Gao (Beijing Sport University); Carlo Perroni (University of Warwick); Oleksandr Talavera (University of Birmingham); Linh Vi (Aston University) |
| Abstract: | We study the role of superstition in China's peer-to-peer lending market by examining whether lenders time their bids according to ''lucky hours'' from the Chinese farmer's calendar. Loans funded during lucky hours perform better - but only because the platform lists higher-rated loans at those times. This pattern is consistent with a screening mechanism: highly risk-averse lenders place greater value on both true risk reductions and auspicious-day signals, so the platform maximizes surplus by bundling the two—listing low-risk loans on auspicious days. Moreover, listing safer loans at lucky hours can further boost profits because biased beliefs decay more slowly under asymmetric (bad-news-heavy) learning. |
| Keywords: | Temperature; Peer-to-peer lending, Superstition, Financial platforms. |
| JEL: | G41 G23 D83 D82 Z13 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:bir:birmec:26-02 |
| By: | Sun, Meiping (Shandong University of Finance and Economics); Yang, Yiying (Fordham University) |
| Abstract: | This paper examines the long-term and multi-generational benefits of skilled birth attendance (SBA), which involves having a trained midwife or doctor present at delivery to safely perform normal deliveries using aseptic techniques and provide first-line emergency obstetric care. Using data on the county-by-county rollout of SBA in China from the 1930s to the 1970s, our research first demonstrates that the SBA reform substantially reduced neonatal mortality. We then show that exposure to skilled delivery during birth leads to a 1.5% increase in adult income. Moreover, we discovered that the benefits of exposure to SBA in previous generations extend to subsequent offspring. Children with at least one parent who experienced SBA have a 2.6% higher monthly income in adulthood than those whose parents did not have access to SBA. We also present evidence of several underlying mechanisms, including improved physical and mental health, better educational outcomes, and enhanced cognitive abilities. Our findings indicate that having skilled health professionals attend childbirths can result in significant long-term and multi-generational benefits. |
| Keywords: | skilled birth attendance, adult earnings, human capital, health, public goods |
| JEL: | H51 H75 I15 I18 J24 N35 O12 O15 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18719 |
| By: | Anning Xie |
| Abstract: | This paper studies the role of intrahousehold bargaining in shaping women’s fertility decisions over the life cycle. I build and estimate a quantitative life-cycle model in which fertility is jointly determined by female labor supply and women’s bargaining power within the household under limited commitment, with endogenous marriage and divorce. A cen tral feature of the model is a dynamic feedback loop: childbirth lowers women’s wages and outside options, weakening their bargaining position and feeding back into subsequent fertility decisions. Exploiting the relaxation of fertility restrictions in China, I document empirically that couples with misaligned fertility preferences exhibit significantly smaller fertility responses and higher divorce rates than couples with aligned preferences. The es timated model replicates these reduced-form moments and further reveals the quantitative importance of limited-commitment frictions in depressing marriage incentives, generating inefficient divorce, and thereby suppressing fertility rates. Eliminating them raises com pleted fertility by 1.77% and marriage rates by 4.48%. Finally, the effectiveness of family policies depends critically on the degree of commitment within the household. |
| Keywords: | fertility, intrahousehold bargaining, marriage and divorce, female labor supply, human capital |
| JEL: | D15 J12 J13 J16 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_760 |
| By: | Samuel Drapeau; Peng Luo; Xuan Tao; Tan Wang |
| Abstract: | Partially convertible economies face a market-design problem: trade integration, cross-border investment, and domestic balance-sheet exposure increase the demand for currency hedging before full financial integration is complete. China adopted a distinctive architecture for this problem by fostering a deliverable offshore Renminbi market (CNH) alongside the segmented onshore market (CNY), rather than relying only on non-deliverable forwards. This creates two venues for closely related claims on the same currency. Spot prices are tightly linked, yet CNY and CNH forwards display a persistent and economically large discrepancy. We study that discrepancy in a joint equilibrium model for spot and forward trading with transaction costs and segmented supply. In the benchmark case with common constant supply and deterministic costs, spot parity implies a forward differential with the wrong sign relative to the data. Random offshore stress, modeled as a jump in trading costs, overturns this benchmark while preserving tight spot parity. The model yields a semi-explicit representation in the CNY/CNH application and a calibration of the observed forward discrepancy in terms of the market-implied likelihood and severity of offshore liquidity stress. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.25392 |