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on China |
| By: | Liu, Kai; Liu, Xiangqing; Zhang, Anwen; Deng, Zhongliang |
| Abstract: | This paper examines the cultural component of son preference through rural-to-urban migration in China, using a large representative dataset covering migrants from all origins to all destinations. Employing a generalized Roy model with a control function approach, we show that conventional epidemiological-approach estimates overstate cultural persistence. Correcting for endogenous destination selection reduces the estimated effect of origin-specific son preference on migrants' fertility behavior by 57-71%. Differences among migrants in the same destination therefore reflect both cultural influences and non-random sorting. We further find that cultural persistence weakens in higher-income destinations but strengthens in areas with greater migrant concentration. |
| Keywords: | Son preference, cultural persistence, endogenous migration, destination selection, fertility behavior, sex ratios, rural-to-urban migration, China |
| JEL: | J13 J61 Z13 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1779 |
| By: | Barwick, Panle; Xia, Hongyuan; Xia, Tianli |
| 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. |
| Keywords: | China |
| JEL: | O38 I18 O31 L65 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21286 |
| By: | Nuwat Nookhwun; Jettawat Pattararangrong; Kittichai Saelee; Wisarut Suwanprasert |
| Abstract: | How did the 2018 U.S.–China trade war affect bystander economies embedded in global value chains? Using Thai customs data from 2013 to 2023, we document sizable trade diversion toward Thailand, a major third-country exporter with extensive trade links to both the United States and China. Thai exports to the U.S. expanded more in products facing larger U.S. tariff increases on Chinese goods. This response was delayed, emerging only after three to four years, and was concentrated in capital goods within selected manufacturing sectors. We show that trade diversion was strongly mediated by global value chains: the products that expanded the most were those with pre-existing supply-chain linkages to China. Firm-level evidence suggests that the U.S. tariffs also lead to both increased imports of Chinese-sourced inputs and the transshipment of Chinese goods through Thailand. Nevertheless, after netting out transshipment and imported input content, we find that trade diversion generated substantial domestic value-added and employment gains. In contrast, Chinese retaliatory tariffs had limited spillover effects. Our findings show that the spillover effects of the trade war operated through supply-chain linkages and delivered meaningful real gains to a bystander economy. |
| Keywords: | Trade War; Trade Diversion; Tariffs, Supply Chains; Transshipment; Thailand; US; China |
| JEL: | F13 F14 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:pui:dpaper:258 |
| By: | Heblich, Stephan; Seror, Marlon; Xu, Hao; Zylberberg, Yanos |
| Abstract: | We study the impact of large, successful manufacturing plants on other local producers in China, focusing on “Million-Rouble Plants†built in the 1950s during a brief alliance with the U.S.S.R. The ephemeral geopolitical situation and the locations of allied and enemy airbases provide exogenous variation in plant siting. We find a boom-and-bust pattern: Counties hosting these plants were 80% more productive than control counties in 1982 but 20% less productive by 2010. This decline reflects the performance of local establishments, which exhibit low productivity, limited innovation, and high markup. Specialization hindered spillovers, preventing the emergence of new clusters and local entrepreneurship. |
| Keywords: | Specialization; Place-based policies; Spillovers |
| JEL: | R11 R53 J24 N95 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21527 |
| By: | Maystadt, Jean-Francois; Tsang, Kampui; Van Biesebroeck, Johannes |
| Abstract: | We investigate to what extent and in what way the US Cotton Ban on products originating from Xinjiang province affected Chinese exports. We find that direct exports of cotton and cotton products to the United States fell by 19% at the intensive margin and 4% at the extensive margin. While the import reduction is strongest for Chinese provinces sourcing most actively from Xinjiang, reductions in US imports from third countries correlate only very weakly with the extent to which countries source cotton inputs from China. The European Union did not impose sanctions, but its cottonrelated imports from China declined significantly as well. Our analysis demonstrates that this negative spillover effect is not due to lower prices, nor to EU countries indirectly facing the ban as they want to maintain access to the US market. The most likely reason for the import decline is European firms’ concerns about reputational damage associated with using cotton products sourced from China. |
| Keywords: | Economic sanctions; Human rights; International spillovers; Event study |
| JEL: | F51 F1 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21438 |
| By: | Wang Jin; Nadav Kunievsky; Bowen Lou; Tianshu Sun; James Evans |
| Abstract: | Over the past decade, U.S. policies have increasingly aimed to preserve artificial intelligence (AI) leadership by promoting domestic free-market policies while controlling global technological chokepoints, particularly advanced semiconductors and computational infrastructure. These measures raised the cost of Chinese AI development, but they also increased the strategic value of open and locally adaptable AI systems. Before raising export controls on high-performance chips, both the U.S. and China promoted policies that included support for open-source AI. During the period following major U.S. export-control shocks, China increasingly embedded open-source AI into national technology strategy through proposed ecosystem building, standards coordination, and resilience-oriented deployment. Moreover, Chinese developers increased engagement with open-source large language model repositories substantially more than U.S. developers did, consistent with a shift toward open infrastructure under geopolitical constraints. Subsequently, Chinese-origin open models diffused widely through open-source communities and scientific research. Even though such models remained largely absent from U.S. patent disclosures, American commercial entities use them in open-access research, suggesting their undermeasured importance within the foundation of U.S. commercial activity. These findings suggest that technological containment policies may unintentionally accelerate open innovation ecosystems as a competitive response, with implications for global leadership in both academic and commercial artificial intelligence. |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2606.15999 |
| By: | Cesa-Bianchi, Ambrogio; Ferrero, Andrea; Fornaro, Luca; Wolf, Martin |
| Abstract: | We provide a framework that connects industrial policies to global imbalances and technolog- ical hegemony, and describe some empirical facts consistent with our model. We study the international spillovers triggered by industrial policies promoting high-tech sectors. Since high- tech goods and services are typically traded internationally, these policies boost the supply of tradable goods. Moreover, industrial policies lead to trade surpluses if the government pursues an unbalanced policy mix, such that domestic demand does not rise as much as supply. These surpluses are absorbed by the rest of the world, which in response runs trade deficits. Absent policy interventions, trade deficits reduce the competitiveness of the domestic tradable sector, stifling innovation and productivity growth. Innovation policies can help the rest of the world to mitigate these negative spillovers. |
| Keywords: | China shock; Global imbalances; Trade imbalances; International spillovers; Tariffs; Innovation; Productivity; Geoeconomics |
| JEL: | E21 E22 E23 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21253 |
| By: | Klaus Friesenbichler; Agnes Kügler; Andreas Reinstaller (Austrian Productivity Board) |
| Abstract: | Recent evidence suggests that Chinese imports negatively impact firm-level productivity growth in the EU. We argue that this effect is moderated by the technological frontier, as proposed by Acemoglu et al. (2006). Using three distinct measures of the frontier, we examined firm-level data from twenty-three EU countries between 2003 and 2022 and found mixed results. We find that an increase in Chinese import intensity positively affects catching up to a productivity frontier. However, the productivity growth of firms operating in less technologically advanced sectors is adversely affected by an increase in Chinese import competition. The results for the country-level measure of national innovation system performance are inconclusive. We partly attribute the productivity growth slowdown to Chinese import competition which lowers growth of non-frontier firms. The findings also have implications for EU trade policy in the context of centralized negotiations. |
| Keywords: | Import competition, Productivity, Manufacturing, EU, China, Frontier, Productivity slowdown |
| Date: | 2026–04–01 |
| URL: | https://d.repec.org/n?u=RePEc:wfo:wpaper:y:2026:i:727 |
| By: | Yafei Wang; Marielle Brunette (BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Fanny Claise (BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | In a context of increasing natural hazards due to climate change, forest insurance is a relevant tool to consider. However, the development of forest insurance schemes varies widely across countries, reflecting differences in forest characteristics, institutional frameworks, and public risk management policies. In this article, we investigate the drivers of this heterogeneity by comparing forest insurance schemes in two contrasting national contexts: France and China. While forest insurance coverage remains relatively limited in France, China has implemented large-scale insurance programs. By examining the design, governance, and role of government intervention in both schemes, we identify the key factors that help explain the differences in insurance uptake across countries. Finally, we discuss innovative insurance products and policy mechanisms that could encourage the adoption of forest insurance. |
| Keywords: | natural hazards, forestry, insurance, insurance forestry natural hazards |
| Date: | 2026–01–13 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05551787 |
| By: | Li, Wenqi (School of Economics and Business Administration, Chongqing University); Nguyen, Bao.H. (Tasmanian School of Business & Economics, University of Tasmania) |
| Abstract: | Using a unique dataset on political relations between China and its key trading partners and a nonlinear model, we explore how improvements in bilateral political relationships influence trade outcomes under varying economic states. Our findings reveal that while stronger political ties (“better friends†) generally improve trade flows, this effect is not universal. During periods of weak domestic demand, bet- ter political relations do not significantly enhance trade performance. The results also exhibit heterogeneity across countries, indicating that the impact of political relations on trade flows differs depending on the specific economic condition and political context. |
| Keywords: | China, political relations, non-linear models, trade flows |
| JEL: | F14 F50 C32 E32 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:tas:wpaper:65547630 |
| By: | Minnich, John |
| Abstract: | When do firms trade technology for market access? Theories of foreign investment typically frame host state bargaining power in terms of domestic characteristics like market size. This article examines how the structure of global markets in which firms are embedded and the inter-firm competition this generates shape firm-state bargaining over technology in ways not reducible to host state attributes. I argue that as the number of firms in an industry rises and global market shares become less evenly divided among them, weak market players face strong incentives to transfer technology in return for access to new markets. In this context, host states can “divide and conquer” investors to secure better terms of trade and investment. Case studies of technology transfer in commercial aircraft manufacturing and semiconductor design and fabrication in China show how industry market structure shapes firm-state bargaining over entry terms both across and within industries. |
| Keywords: | technology transfer; market structure; foreign direct investment; China |
| JEL: | F3 G3 R14 J01 |
| Date: | 2026–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:138366 |
| By: | Koch, Alexander K; Kragl, Jenny; Ming, Sijuan; Nafziger, Julia |
| Abstract: | Persistent gender gaps in self-promotion contribute to unequal labor market outcomes. In this study, we investigate how AI-assisted writing tools shape self-promotion, and, as a secondary outcome, confidence and how these effects interact with gender. For this purpose, we conducted an online experiment in China in which participants wrote self-promotion texts, provided a numerical self-promotion score and stated their confidence about how they will perform in an upcoming math and logic test. We find suggestive evidence that AI assistance reduces numerical self-evaluations. Neither gender nor the interaction between gender and AI assistance is significantly related to self-promotion or confidence. We conduct a text analysis to investigate the mechanisms behind these results. |
| Keywords: | Confidence; Gender gaps |
| JEL: | C90 D03 D83 J16 M12 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21262 |
| By: | Flavio Cunha; Qinyou Hu; Yiming Xia; Naibao Zhao |
| Abstract: | We evaluate a parent-directed empathy development program for middle school students in China using a randomized trial with 2, 246 students. The four-month mobile app intervention produced short-run gains in empathy and reduced bullying but no immediate academic effects. Over the longer term, treatment students were 3.2 percentage points more likely to enter elite high schools and 2.5 percentage points less likely to miss the entrance exam. We trace these gains to improved self-beliefs and a restructuring of classroom friendship networks that reduced academic homophily, revealing a social channel of cross-productivity: non-cognitive investments can reshape peer relationships to improve academic outcomes. |
| JEL: | C93 I21 J24 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35370 |
| By: | Graziano, Alejandro; Sztajerowska, Monika; Volpe Martincus, Christian |
| Abstract: | This paper provides new evidence on tariff-induced reorganization of multinational production. Exploiting the 2018–2019 U.S. tariffs on Chinese goods, we show that Chinese MNEs expanded foreign affiliates disproportionately in third countries with high revealed production suitability for serving the U.S. market, especially in tariff-exposed sectors. Trade agreements with the U.S. amplified this reallocation. We also document that firms anticipated these trade policy changes as tariff increases began to be proposed in 2016-2017. Back-of-the-envelope calculations suggest tariff-induced Chinese FDI in third countries accounts for 43–52% of Chinese cross-border investment projects. |
| Keywords: | Tariffs |
| JEL: | F13 F21 F23 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21547 |
| By: | Görg, Holger; Mao, Haiou; Driffield, Nigel |
| Abstract: | Divestments by foreign multinationals are an important phenomenon that is largely neglected in the literature. We use firm‐level panel data from China to estimate the impact of such divestments on the performance of domestic firms in the local economy. To the best of our knowledge, there is no empirical study that has looked at these effects. Our results suggest that, overall, domestic firms may be able to benefit from divestments by foreign firms through spillovers. We find evidence suggesting that the positive overall effect for private firms is driven by the movement of workers from the divested firm to the local firm, as well as by a reduction in competition reducing crowding out. By contrast, local firms are negatively affected by the loss of technology transfer and customer–supplier relationships with foreign firms. While most effects are short‐lived, the negative impact on technology transfer persists over time. |
| Keywords: | foreign divestment, multinational enterprises, spillovers |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:335592 |
| By: | Bissan Ghaddar; Kimberly Singer Babiarz; Hongbin Li; Lingsheng Meng; Lynn Hildemann; Han Hong; Alvise Scarabosio; Meili Wang; Aprajit Mahajan; Peng Yin; Maigeng Zhou; Grant Miller |
| Abstract: | Ambient air pollution contributes substantially to premature mortality globally, and the effectiveness of policies addressing it depends critically on the shape of the dose-response relationship, which remains poorly understood. Linking hourly air pollution data with daily vital statistics from 251 Chinese cities over four years, we show this relationship depends not only on the mean, but also on the variance of within-period exposure. At a 7-day mean of 150 μg/m³, predicted mortality varies more across observed hourly PM2.5 distributions than across mean exposure differences of 100 μg/m³. The sign of this variance effect also depends on the mean: at low mean concentrations (a convex region), higher variance is associated with modestly higher mortality. At higher concentrations (a concave region), greater variance is associated with lower mortality – implying constant exposure is more harmful than fluctuating exposure for a given mean. These findings reveal important relationships masked using temporally aggregated air pollution data. |
| JEL: | O10 O13 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35428 |
| By: | Yanyou Chen; Mitchell Hoffman; Huilan Xu; Zhe Yuan |
| Abstract: | Can AI improve workplace outcomes for workers with disabilities? We examine the relative performance of deaf or hard of hearing (DHH) workers on one of China's largest food-delivery platforms. Pre-AI, DHH workers are slower than non-disabled workers and have worse customer ratings, although they supply more hours to the platform and are less likely to quit. Midway through our data, the platform suddenly introduces an AI-based intelligent outbound calling system designed to improve customer communication for DHH workers. Using a difference-in-differences design comparing DHH and non-disabled workers before and after the AI tool, we find that AI increases the speed and productivity of DHH workers, especially on tasks involving customer interaction; substantially reduces negative customer ratings; and increases labor supply and retention. AI eliminates one-third of the disability hourly pay gap and significantly increases the profitability of DHH workers for the platform. |
| JEL: | J14 M50 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35372 |
| By: | Reka Juhasz (UBC, NBER, CEPR); David Krisztian Nagy (CREI, CEPR); Claudia Steinwender (LMU Munich, CEPR); Woan Foong Wong (University of Oregon, NBER, CEPR) |
| Abstract: | Maritime transport remains the backbone of global trade, yet the port and shipping network that carries it has been transformed by containerization and related technological advances. Drawing on newly available granular data—digitized historical shipping records, georeferenced ship movements, and shipment-level routing information—we present five stylized facts on the structure and evolution of the maritime network. Global shipping activity is highly concentrated among a changing lineup of dominant top ports even as lower-ranked ports disperse, while state-owned Chinese port terminal operators increasingly account for these global volumes, boosting overall port operations while delivering efficiency gains mostly to Chinese vessels. We use these facts to organize a synthesis of a fast-growing literature: containerization reshaped which port cities could expand, reinforced hub-and-spoke concentration that yields large but localized welfare gains, embedded ports in multimodal networks that amplify the returns to infrastructure, and generated market power, congestion, and environmental costs. Together, this evidence shows how evolving maritime technologies simultaneously deepen global integration and heighten the economic and geopolitical importance of critical nodes in the transport network—and of who controls them. |
| Keywords: | transport networks; ports; international trade; trade costs; containerization; geoeconomics; |
| JEL: | F13 F14 R41 R42 |
| Date: | 2026–07–02 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:579 |
| By: | Xiyan Gong |
| Abstract: | This paper investigates the endogenous mechanism by which decentralized technological imitation in Southern countries transitions from catch-up to competitive conflict with the North. Integrating intermediate goods variety into a North-South trade model with Balance of Payments (BOP) constraints, we demonstrate that uncoordinated, profit-driven investment by Southern firms often exceeds the BOP constraint. While conventional theory suggests this tightens BOP constraints causing stagnation, our framework reveals that unexpected technological progress alters Northern import elasticity, thereby relaxing external constraints and enabling sustained over-investment. However, this excessive imitation redistributes Northern profit shares, triggering endogenous tariff retaliation and technological containment. The model illustrates two types of trade dynamics depending on the strength of animal spirits, import elasticities, and tariffs: a two-stage path ending in the middle-income trap, or a three-stage path achieving catch-up. |
| Keywords: | North-South Model; Technology Gap; Trade Dynamics; BOP Constraint |
| JEL: | F43 O33 F13 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1120 |
| By: | Elsas-Nicolle, Ambre; Li, Shiyuan; Verboven, Frank |
| Abstract: | U.S.--China trade tensions have led to sanctions on major Chinese firms, with potential spillovers to third-country markets. We study the effects of U.S. restrictions on Huawei's access to key U.S. technologies in smartphone markets in the United States and Europe. Using product-level data, we show that the sanctions substantially reduced Huawei's sales and prices, consistent with a negative demand shock. To quantify equilibrium effects, we develop a differentiated-products oligopoly model in which the sanctions degrade two key Huawei product attributes: access to Google Mobile Services and 5G chipsets. We find that the sanctions were effective in reducing Huawei's profits, despite its divestiture of Honor to mitigate losses. While U.S. consumers are largely unaffected, European consumers experience considerable welfare losses. These findings indicate that firm-targeted sanctions can shift welfare losses away from the sanctioning country and onto third-country consumers. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21405 |