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on China |
| By: | Karsten Mau; Mingzhi (Jimmy) Xu; Yawen Zheng |
| Abstract: | We evaluate how access to international transport infrastructure promotes trade and economic development. Exploiting the gradual unfolding of transcontinental rail freight connections between China and Europe, our empirical findings indicate increasing exports from connected cities, with positive spillovers to neighboring cities and other indicators economic activity. Not all products and cities are equally responsive to new rail export opportunities. We set up a multi-sector heterogeneous firms model with a rich specification of trade costs, in which firms optimize trade costs by choosing alternative transportation modes and routes. Leveraging a unique data set on trade flows between Chinese cities, we calibrate our model to discuss local welfare effects, relying on sufficient statistics that quantify changes in city-level trade costs. We also highlight significant spatial distributional effects of trade infrastructure development. |
| Keywords: | transport infrastructure, trade, regional development, China |
| JEL: | F14 F15 R11 R41 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12027 |
| By: | Matthes, Jürgen |
| Abstract: | Compared to 2020, the deficit in merchandise goods trade with China is 3.6 times higher for Germany in 2025 (annualised based on data from January to April 2025) and it has doubled for the Euro area. However, the nominal exchange rate of the Yuan against the Euro has hardly changed between 2020 and 2025. This is all the more striking as European goods have become much more expensive: Producer prices have risen by more than 35 per cent in Germany and the Euro area compared with early 2020, whereas Chinese producer prices have hardly increased at all. The immense producer price divergence is mostly due to an external shock in Europe that resulted from supply chain restrictions in the course of the COVID-19-pandemic and from the energy cost increases after the Russian invasion of Ukraine. This constellation has caused a very large real appreciation (based on producer prices) of the Euro against the Yuan of more than 40 per cent for Germany and for the Euro area between early 2020 and spring 2025. The resulting huge cost disadvantage has likely contributed considerably to the rise in the trade deficit as an appreciation of the Euro renders European exports more expensive and imports from China less costly. Moreover, the real appreciation appears to be an important reason why about half of German industrial firms facing Chinese competition reported in 2024 that Chinese competitors undercut their prices by more than 30 per cent (Matthes, 2024). This large European cost disadvantage would have been prevented if the Yuan had appreciated against the Euro to a significant degree. In fact, a rising trade deficit leads to higher netdemand for Yuan in Euro on the exchange rate market as European importers sell Euro to obtain Yuan in order to buy goods from Chinese sellers. Thus, the Yuan should have appreciated if it was floating freely. However, the Yuan exchange rate is managed by the central bank of China relative to the US Dollar and to a basket of other currencies. As the Yuan did not appreciate against the Euro, the question arises whether this is a case of currency manipulation and whether China's significant cost advantage can be deemed unfair. To investigate this question, also other components of the bilateral balance of payments between the Euro area and China have to be taken into consideration as they also influence the net demand for Yuan in Euro. Indeed, the balances in services trade and in primary incomes (other components of the current account apart from the balance in merchandise goods trade) are positive. Thus, these components reduce the net demand for Yuan in Euro that is caused by the negative goods trade balance, but only to a small degree. Moreover, also capital flows have to be considered (that are measured in the financial account balance). However, there is a lack of data for portfolio investment inflows from China to the Euro area so that total capital inflows cannot be calculated. However, this missing component can be estimated (Chapter 3.2). Based on this estimation, the overall change in the net demand for Yuan in Euro between 2020 and 2024 can also be estimated: it has significantly risen by EUR 125 billion. These findings provide strong indications for currency manipulation and for a significant and unfair undervaluation of the Yuan against the Euro. If there had been a free and market-based bilateral exchange rate market, the rising net demand for Yuan in recent years should have led to a significant appreciation of the Yuan against the Euro. As this was prevented by the central bank of China's currency management policies, a considerable unfair price advantage for China has resulted, which comes at the expense of European companies that compete with Chinese firms on the world market. The large increase in the merchandise trade deficit with China is a clear indication of the relevance of the Yuan's undervaluation against the Euro. As European industry is seriously threatened by this development, trade policy action is urgently warranted in order to re-establish a level playing field. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwkrep:323227 |
| By: | Hao Li; Tom Coupé (University of Canterbury); Andrea Menclova (University of Canterbury); Weihong Zeng |
| Abstract: | Wintertime ambient air quality in northern China has improved markedly over the past decade, yet the role of the household sector in this improvement remains unclear. This study evaluates the impact of an energy transition policy targeting the household sector—namely, the coal-to-gas policy—on wintertime air quality in northern China. Using balanced panel data covering the period from 2015 to 2023, we adopt a staggered difference-in-differences approach as our baseline empirical strategy to examine the policy’s effects across five implementation phases, and report results using heterogeneity-robust estimators to address the “forbidden comparison” issue. The results show that the policy significantly improved the Air Quality Index (8.3–12.5 %) and reduced concentrations of PM2.5 (9.8–15.6 %, ), PM₁₀ (8.2–12.7 %), SO₂ (26.4–33.6 %), and NO₂ (7.4–10.5 %), though this was accompanied by an increase in ozone concentrations (8.3–12.9 %). To explore channels, we analyze household-level data from both urban and rural areas. We find that the policy has significantly increased urban clean energy infrastructure, promoted the expansion of centralized heating systems, and raised the likelihood of households adopting clean energy in rural areas. |
| Keywords: | Air pollution; Coal-to-gas Policy; Energy transition; China |
| JEL: | Q53 Q48 Q42 C23 |
| Date: | 2025–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:cbt:econwp:25/11 |
| By: | Eric A. Hanushek; Le Kang; Xueying Li; Lei Zhang |
| Abstract: | The changing pattern of quality in China’s rural schools across time and province is extracted from the differential labor market earnings of rural migrant workers. Variations in rates of return to years of schooling across migrant workers working in the same urban labor market but having different sites of basic education provide for direct estimation of provincial school quality. Corroborating this approach, these school quality estimates prove to be highly correlated with provincial cognitive skill test scores for the same demographic group. Returns to quality increase with economic development level of destination cities. Importantly, quality appears higher and provincial variation appears lower for younger cohorts, indicating at least partial effectiveness of more recent policies aimed at improving rural school quality across provinces. Surprisingly, however, provincial variations in quality are uncorrelated with teacher-student ratio or per student spending. |
| Keywords: | school quality, migration, China |
| JEL: | I25 J6 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12017 |
| By: | Eyal G. Frank; Qinyun Wang; Shaoda Wang; Xuebin Wang; Yang You |
| Abstract: | How do large disruptions to ecosystems affect human well-being? This paper tests the long-standing hypothesis that China's 1958 Four Pests Campaign, which exterminated sparrows despite scientists’ warnings about their pest-control role, exacerbated the Great Famine—the largest in human history. Combining newly digitized data on historical agricultural productivity in China with habitat suitability modeling methods in ecology, we find that, after sparrow eradication, a one-standard-deviation increase in sparrow suitability led to 5.3% larger rice and 8.7% larger wheat declines. State food procurement exacerbated these losses, resulting in a 9.6% higher mortality in high-suitability counties—implying nearly two million excess deaths. |
| JEL: | N55 Q50 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34087 |
| By: | Kaiji Chen; Yiqing Xiao; Tao Zha |
| Abstract: | We examine how interbank wholesale funding shapes the transmission of interest-rate-based monetary policy in China and contributes to systemic risk. Using a bank-level quarterly panel dataset and an estimated policy rule for the 7-day repo rate, we find that access to wholesale funding amplifies the transmission of monetary policy easing to lending by non-state banks, but also heightens their vulnerability to systemic risk during economic downturns. Since 2018, non-state banks with greater reliance on wholesale funding have experienced larger increases in expected capital shortfalls. To interpret these findings, we develop a structural model that incorporates a dual-track interest rate system and a segmented deposit market. The model quantifies the role of a liquidity reallocation channel from state to non-state banks and reveals a macroprudential trade-off: tighter regulation of wholesale funding weakens the effectiveness of monetary policy but mitigates systemic risk. |
| JEL: | E02 E5 G28 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34056 |
| By: | Xiaolin Yu (Yonsei University); Jin Seo Cho (Yonsei University) |
| Abstract: | The current study examines whether government-led digital finance initiatives promote firm-level digital innovation by leveraging the staggered rollout of China’s Fintech pilot programs as quasi-natural experiments. Our dataset comprises 26, 746 firm-year observations of A-share listed companies from 2009 to 2023. To measure innovation, we develop a text-based indicator derived from the frequency of digital-related keywords in the annual reports of the listed firms. Employing a multi-period difference-in-differences design, we find that designation as a pilot zone increases digital innovation intensity by 0.8225 per thousand report words. These results remain robust across parallel, propensity score matching, placebo, and robustness tests. Mediation analysis reveals that the part of the effect is attributable to increased R&D intensity, with the program raising the average R&D-to-sales ratio by 0.24 percentage points. Moreover, program effect is stronger among high-tech firms and those located in Central and Western China, regions characterized by relatively weaker financial and digital infrastructure. |
| Keywords: | Difference-in-differences; Fintech pilot programs; digital innovation; R&D investments; firm heterogeneity |
| JEL: | G18 G28 G38 O31 O32 O38 O53 P42 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:yon:wpaper:2025rwp-257 |
| By: | Dennis Egger; Benjamin Faber; Ming Li; Wei Lin |
| Abstract: | We combine a new collection of microdata from China with a natural policy experiment to investigate the extent to which reductions in rural-urban migration barriers affect flows of trade and investments between cities and the countryside. We find that increases in worker eligibility for urban residence registration (Hukou) across origin-destination pairs increase rural-urban exports, imports, capital inflows and outflows, both in terms of bilateral transaction values and the number of unique buyer-seller matches. To quantify the implications at the regional level, we interpret these estimates through the lens of a spatial equilibrium model in which migrants can reduce buyer-seller matching frictions. We find that a 10% increase in a rural county's migration market access on average leads to a 1.5% increase in the county's trade market access and a 2% increase in investment market access. In the context of China's recent Hukou reforms, we find that these knock-on effects on market integration were on average larger among the urban destinations compared to the rural origins, reinforcing incentives for rural-urban migration. |
| JEL: | F63 O12 R11 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34098 |
| By: | Xiqian Cai (Xiamen University); Pei Li (Zhejiang University); Qinyue Luo (RFBerlin); Hong Song (Fudan University); Huihua Xie (Zhejiang University) |
| Abstract: | Does gender identity affect judicial decisions? This paper provides novel evidence of in-group gender bias in the judicial decisions for almost all divorce cases in China. Exploiting the effectively random assignment of cases to judges, the analysis finds that female judges are 1.2 percentage points more likely to grant divorce petitions filed by female plaintiffs compared to male plaintiffs, relative to male judges. This bias primarily reflects female judges’ harsher treatment of male plaintiffs. The bias is significantly weaker in regions with stronger traditional gender norms, indicating that conservative cultural attitudes may constrain overt displays of in-group gender favoritism. Institutional legal development has little moderating effect, underscoring the primary role of culture. These findings highlight the importance of complementing efforts to promote judicial diversity with safeguards to detect and mitigate implicit bias. |
| Keywords: | gender, in-group bias, gender discrimination, judicial decisions |
| JEL: | J16 J14 J10 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:2523 |
| By: | Shi, Ruihan; Chen, Pinxian |
| Abstract: | Corporate risk-taking is a key factor in corporate decision-making, and in recent years, the influence of cultural factors as informal institutions on corporate decisions has attracted widespread attention from scholars. Confucian culture, which upholds core values such as benevolence and righteousness, forgiveness and tolerance, integrity, and loyalty and filial piety, has long permeated various levels of Chinese society. Using non-financial listed firms in China as the sample, this study measures the strength of Confucian cultural influence by the number of Confucian temples within varying distances around each firm and further explores the impact of Confucian culture on corporate risk-taking. The results show that Confucian culture is negatively associated with corporate risk-taking, indicating that in regions where Confucian culture is more deeply rooted, firms tend to exhibit lower levels of risk-taking. This study provides an in-depth empirical analysis of the factors influencing corporate risk-taking and the role of cultural factors, offering important guidance for corporate strategic development and risk management strategies while contributing to a deeper and more comprehensive understanding of the critical role of cultural factors, such as Confucian culture, in risk-taking decisions. |
| Date: | 2025–07–25 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:abhse_v1 |
| By: | Van Even, Priscilla (KU Leuven); Wang, Huize (Zhejiang University); Wang, Kexin; Fang, Yu; Bibert, Niels (KU Leuven) |
| Abstract: | Museums are more than repositories of cultural treasures; they actively collect, preserve, and exhibit cultural heritage for local and global audiences, reflecting shared values and serving as important institutes for cross-cultural exchange. Within this chapter, we will explore “中国历代 绘画大系”, A Comprehensive Collection of Ancient Chinese Paintings, an impressive printed series of Chinese artworks dedicated to preserving and presenting ancient Chinese cultural heritage in all of its glory. This unprecedented collection, along with its curation and communication, emerged through intensive global exchanges, cross-cultural dialogues, interdisciplinary collaborations, and technological innovation, positioning it as an exemplary case for museums of the future. The Collection has been documented in an encyclopedic multi-volume book series, which has been donated to universities worldwide, and it has also been exhibited in museums both within and beyond China, communicated through digital media platforms, and has even inspired the creation of a dedicated Collection Hall complex building, “中国历代绘画大系典藏馆” , at the Yuhang District in Hangzhou. Within this chapter, we approach this collection through two complementary disciplinary lenses. First, from an art historical perspective, we trace the story of the collection’s formation, the challenges of gathering and preserving Chinese paintings dispersed across global institutions, and the essential role of digital mediation in this process. Second, from the fields of media studies and communication sciences, we examine the establishment of the Collection Hall by Yuhang Municipal Government and Zhejiang University, and its innovative use of technology and spatial design to curate and communicate art across cultural and geographic borders in and beyond the museum. Together, these perspectives reveal how museums can evolve into dynamic, digitally mediated spaces for cultural dialogue and heritage preservation in a globalized world. Keywords – Chinese paintings, cultural heritage, preservation, art communication, cross-cultural collaboration, digital mediation, interdisciplinarity |
| Date: | 2025–07–17 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:kh3c8_v1 |