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on China |
| By: | Fei, Yue; Hege, Ulrich; Jia, Xiao |
| Abstract: | We study how IPO reforms transmit to venture capital (VC) markets using the introduction of China’s entrepreneurial boards, ChiNext and the registration-based STAR. We document that both boards attract younger, higher-growth firms with weaker fundamentals in levels, but postIPO growth persists for ChiNext firms while decelerating sharply for STAR firms. VC backing plays different roles across regimes: on ChiNext it aligns with valuation premia and long-run outperformance, whereas on STAR it mainly predicts higher first-day returns. To identify causal effects on VC allocation, we construct novel text-based regulatory exposure measures from listing documents using keyword matching and Sentence-BERT semantic similarity, and show that VC financing reallocates toward firms more aligned with "supported" activities. |
| Keywords: | IPO Reforms; IPO Listing Requirements; Venture Capital; Business Description; BERT; China |
| JEL: | G24 G28 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:131666 |
| By: | Hanming Fang; Xian Gu; Hanyin Yan; Wu Zhu |
| Abstract: | We develop a high-precision classifier to measure artificial intelligence (AI) patents by fine-tuning PatentSBERTa on manually labeled data from the USPTO's AI Patent Dataset. Our classifier substantially improves the existing USPTO approach, achieving 97.0% precision, 91.3% recall, and a 94.0% F1 score, and it generalizes well to Chinese patents based on citation and lexical validation. Applying it to granted U.S. patents (1976-2023) and Chinese patents (2010-2023), we document rapid growth in AI patenting in both countries and broad convergence in AI patenting intensity and subfield composition, even as China surpasses the United States in recent annual patent counts. The organization of AI innovation nevertheless differs sharply: U.S. AI patenting is concentrated among large private incumbents and established hubs, whereas Chinese AI patenting is more geographically diffuse and institutionally diverse, with larger roles for universities and state-owned enterprises. For listed firms, AI patents command a robust market-value premium in both countries. Cross-border citations show continued technological interdependence rather than decoupling, with Chinese AI inventors relying more heavily on U.S. frontier knowledge than vice versa. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2604.10529 |
| By: | Kaaresvirta, Juuso; Kerola, Eeva; Nuutilainen, Riikka |
| Abstract: | This paper examines recent developments in the internationalisation of the Chinese yuan, focusing on trade and portfolio flows, foreign exchange markets, cross-border payments, and official reserve holdings. The promotion of the yuan's global role has been a deliberate policy objective for Chinese authorities over the past two decades. The use of the yuan in China's own cross-border trade and portfolio flows has increased in recent years. Still, broader international adoption of the yuan remains very small compared to the US dollar and the euro and has not increased markedly in recent years. Under the current Chinese economic and financial framework-characterized by constrained capital account openness and an emphasis on market and exchange rate stability- the scope for a substantial increase in global yuan use remains limited. |
| Keywords: | China, yuan, currency, internationalisation |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bofitb:340029 |
| By: | Wei Jiang; Jingwei Wu |
| Abstract: | We examine optimal government education expenditure policies in the form of cash transfers to school-aged children, with the objectives of enhancing intergenerational income mobility and reducing the skill premium. Using a calibrated overlapping generations (OLG) model tailored to recent empirical data from the Chinese economy, we analyse the welfare-maximizing policy design of this policy. Our findings indicate that optimal policy involves directing greater cash transfers toward children with lower initial ability, as their educational attainment requires higher relative effort. This aligns with China’s nationwide higher education expansion initiative launched in 1999. Quantitatively, the optimal policy enhances upward income mobility by 56%, reduces the skill premium by 58%, and increases aggregate welfare by approximately 13%. |
| Keywords: | Chinese economy; intergenerational income mobility; skill premium; government cash transfers |
| JEL: | E24 E62 I25 I28 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:ukc:ukcedp:2602 |
| By: | Elvis Korku Avenyo (South African Research Chair in Industrial Development, University of Johannesburg); Danilo Spinola (College of Accounting, Finance and Economics, Researcher at UNU-Merit.); Fiona Tregenna (South African Research Chair in Industrial Development, University of Johannesburg) |
| Abstract: | This paper examines the firm-level effects of Chinese manufacturing import penetration on the performance of manufacturing firms in Belt and Road Initiative (BRI) countries. We construct a dataset of 59 BRI member countries by combining firm-level data from the World Bank's Enterprise Survey with industry-level data from the United Nations Commodity Trade (Comtrade) database from 2011 to 2020. Employing a multi-level modelling approach, our findings reveal that Chinese manufacturing imports exert a considerable adverse effect on productivity growth and employment, and a robust and significant positive effect on the export capabilities of manufacturing firms. The adverse effects on performance are significantly moderated by firms that pursue innovation and engage in foreign licensing. These findings are significant in middle-income countries and small and medium-sized enterprises (SMEs) within BRI countries. Based on these findings, we argue that the importation of manufactured goods from China results in a crowding-out effect on the productive capacities of firms within the Belt and Road Initiative (BRI) countries on the one hand and a catalytic effect on the internationalisation of firms on the other hand. These dual outcomes may underscore China's global value chains (GVCs) position-seeking strategy. |
| Keywords: | Chinese manufacturing import penetration; Multi-level modelling; Firm-level effects; Belt and Road Initiative. |
| JEL: | F14 F15 F61 O14 P33 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:adz:wpaper:2024-06 |
| By: | Kenneth S. Rogoff; Yuanchen Yang |
| Abstract: | Real estate has long been central to China’s growth model, yet since 2018 its contribution has declined sharply, turning the sector from a key engine of expansion into a major drag on economic activity. While policy tightening might have triggered the downturn, it reflects deeper structural imbalances in a sector that, together with its upstream and downstream linkages and infrastructure, accounts for nearly one-third of aggregate demand. With housing comprising nearly 70 percent of household wealth, the ongoing price correction has generated sizable negative wealth effects, amplifying the contraction through depressed consumption, investment, and sentiment. We document the macroeconomic propagation of China’s real estate downturn and assess the risks of prolonged stagnation should the sector continue to deteriorate. To provide perspective, we compare China’s experience with Japan’s real estate collapse in the 1990s, uncovering striking parallels in investment dynamics and consumption responses despite profound institutional differences. Our findings highlight the importance of real-side channels, including alternative amplification mechanisms (in addition to banking), in generating persistent output losses following real estate busts. |
| JEL: | F39 G01 R3 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35054 |
| By: | Hua Wang; Yuhan Deng; Donald S. Kenkel; Alan D. Mathios; Sen Zeng |
| Abstract: | A growing body of economic research explores the impacts of U.S. e-cigarette regulations on consumer tobacco choices, but less is known about e-cigarette regulation in China, the world’s largest tobacco market. We study China’s ban of flavored e-cigarettes. The ban of all flavors in e-cigarettes other than tobacco was part of a comprehensive package of regulatory policies adopted in 2022. We collected stated preference data through two discrete choice experiments conducted in 2021 and 2023, with about 600 subjects each. All subjects were adult current smokers. In the experiments, subjects made hypothetical choices between cigarettes, e-cigarettes, and quitting. Product prices and the attributes of e-cigarettes were experimentally varied, allowing us to identify the impact of flavor availability on stated preferences. We use the data to estimate conditional logit models and to predict the impact of the flavor ban and other policies. The empirical results suggest that a ban of flavored e-cigarettes decreases stated preferences for e-cigarettes but also has the unintended consequence to increase stated preferences for cigarettes. Despite the predicted decrease in e-cigarette choices, the predicted choice share of flavored e-cigarettes when they are illegal but loosely enforced is 53% of the predicted share when legal. This large illegal share is consistent with anecdotal evidence and with the evidence from our 2023 background survey that flavored e-cigarettes remain popular after the ban although fewer vapers reported getting their e-cigarettes from specialty or general retailers. |
| JEL: | I12 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35048 |
| By: | Pablo D. Fajgelbaum; Amit Khandelwal |
| Abstract: | In 2025, the U.S. raised average tariff duties from 2.4% to 9.6%, bringing protectionism to its highest level in eighty years. We explore the structure of these tariffs, estimate their short-run impacts, and summarize the growing literature on their effects. Across trade partners, the tariffs are correlated with trade deficits but not with geopolitical or strategic industrial goals, other than targeting China. In our baseline estimate, 90% of the tariffs are passed through to tariff-inclusive prices paid by U.S. importers. Incorporating the estimated price and trade responses into a static trade framework, we find an overall welfare impact ranging from a loss of 0.13% of GDP to a gain of 0.10%. These small net welfare impacts reflect sizable consumption losses roughly offset by income and revenue gains, with their sign hinging on whether U.S. terms-of-trade adjusted (on which the data are inconclusive). Among their stated rationales, the tariffs have been effective at raising federal revenue and diverting trade from China. However, it remains uncertain whether they will reduce the trade deficit, lower prices set by foreign exporters, promote manufacturing jobs, increase “friend-shoring” among aligned countries, or reshore key sectors; evidence from 2018-19 and 2025 indicators suggests a narrow path towards achieving these goals. |
| JEL: | F01 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35064 |
| By: | Chang Ma; Shang-Jin Wei |
| Abstract: | China's large current account surplus has been an irritant to its trading partners. While industrial and trade policies often lead to sector-level imbalances, they play a relatively limited role in the economy-wide surplus. Structural factors such as an unbalanced sex ratio and uneven access to financing by state-owned and non-state firms are more important determinants of the current account imbalance. While macroeconomic stimulus can boost imports and reduce the surplus in the short run, any long-term solution would need to involve reforms aiming at addressing the structural problems. |
| JEL: | F3 F4 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35056 |
| By: | Hiroshi IYETOMI; Yuta ARAI; Yuichi IKEDA |
| Abstract: | The ongoing geopolitical tensions between the United States and China are reshaping global production networks, particularly in the electronics industry, where East Asia serves as a central manufacturing hub. This study empirically examines Japan's position within the evolving East Asian electronics value chain using firm-level supply chain data. We construct a global supply chain network consisting of 15, 292 nodes (firms) and 27, 751 links (transactional relationships), centered on the electronics industry along with its two closely related sectors: the automotive and aerospace-defense industries. Our findings indicate that Japan continues to occupy an important upstream position, particularly in electronic components, manufacturing equipment, and precision instruments. However, a decline in the relative market share and network centrality of Japanese firms in the mainstream semiconductor industry suggests a departure from Japan's former dominance. In contrast, we identify a distinct automotive cluster in which Japanese firms remain highly competitive. The analysis also reveals an aerospace and defense community dominated by U.S. and European firms, characterized by limited participation from Japanese firms and the potential strategic exclusion of China. Furthermore, we uncover a separate cluster linking electronics, automation, and utilities, where Japanese firms play a prominent role with a 58% share. This cluster highlights a unique structural feature of industrial organization in Japan. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:26025 |
| By: | Benjamin Leroy; Davi Marim; El Ghali Benjelloun; Arthur Rozan Debeaurain; Jean-Michel Dalle |
| Abstract: | We explore a quantitative approach to emerging technological sovereignty and geoeconomic power by assessing the relative positioning of countries with economic complexity methods applied to the structure of national venture-capital (VC) portfolios and their associated Revealed Venture Advantage (RVA) metrics. Using Crunchbase firm- and deal-level data, we map venture-backed startups to 18 emerging technology domains via a probabilistic multi-label large-language-model classifier, and construct an RVA-based country-technology specialization matrix for the 17 countries with the highest aggregate VC funding. From this matrix, we derive two eigenvector-based measures: a Geoeconomic Complexity Index (GCI) that ranks countries by the composition of their venture specializations, and an Emerging Technology Geoeconomic Complexity Index (ETGCI) that ranks domains by the extent to which specialization is concentrated among high-GCI countries. Empirically, Cloud Computing, Cybersecurity Tools, and Medtech exhibit the highest ETGCI values, reflecting concentration of specialization in a small set of leading countries. The United States and Israel consistently occupy a marked "high-diversity/low-ubiquity" position and lead the GCI ranking, followed by China, France, Japan, and Germany; both country and domain rankings are stable from 2021-2024. Finally, relatedness-based simulations identify, when it exists, for each country the Simplest Single Sovereignty Enhancing Technology (SSSET), i.e., the most feasible single new technological direction associated with the largest expected improvement in relative geoeconomic positioning. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2604.09187 |