Edward Glaeser, Ming Lu, 15 September 2018

Comparing China’s per-capita GDP growth to the growth in years of schooling suggests a large role for human capital externalities. This column uses changes in the location of Chinese university departments in the 1950s to estimate that an extra year of schooling has been associated with 22.0% higher hourly wages across cities. Even so, the growth of Chinese education cannot explain the country’s massive increase in earnings.

Panle Jia Barwick, Shanjun Li, Deyu Rao, Nahim Bin Zahur, 04 September 2018

Air pollution is a serious concern for China. National levels of fine particular matter are well above recommended standards, and the average concentration across China’s thirteen largest cities is 30% higher than the national average. This column examines the relationship between health spending in China and air pollution, showing that health spending increases significantly during the two months following exposure to air pollution. A reduction of fine particular matter by about 20% from the current level could result in annual savings of 60 billion yuan in healthcare expenditure.

Zhao Chen, Zhikuo Liu, Juan Carlos Suárez Serrato, Daniel Yi Xu, 28 August 2018

Tax incentives to encourage firms to invest in R&D may also encourage firms to fraudulently relabel other expenses as R&D. The column finds that 30% of the increase in reported R&D in response to a Chinese incentive programme was due to relabelling. The size and type of tax break has a large effect on both the level of participation and the incentive to relabel.

Yi Huang, Chen Lin, Sibo Liu, Heiwai Tang, 10 August 2018

Tariffs intended to reduce competition from foreign firms can backfire by also raising the costs of imported inputs for domestic firms. This column examines the market responses to the Trump administration’s initial and subsequent announcements of tariffs on imports from China. US firms that are more dependent on exports to and imports from China experienced lower stock and bond returns but higher default risks around the date of the announcement. Firms’ indirect exposure to US-China trade through domestic input-output linkages affects their responses to the announcements. 

Mariassunta Giannetti, 02 August 2018

Some economists argue that corruption can contribute to economic growth by bypassing red tape and financing issues. Using data from China's anti-corruption campaign in 2012, Mariassunta Gianetti shows that small, young - and potentially more productive - firms tend to perform better when corruption is cut. This video was recorded at CEPR's Third Annual Spring Symposium.

Chad Bown, Eva (Yiwen) Zhang, 31 July 2018

Haichao Fan, Yu Liu, Nancy Qian, Jaya Wen, 29 July 2018

Enforcement of VAT requires accurate records of firm transactions that can be traced to both parties. This column describes how the Chinese government’s digitisation of the country’s VAT process increased enforcement, which in turn increased overall tax revenues in the short run. However, the increased enforcement caused firms to contract in the medium run, reducing the long-run gains in tax revenues.

Chad Bown, Euijin Jung, Zhiyao (Lucy) Lu, 26 July 2018

Chad Bown, Euijin Jung, Zhiyao (Lucy) Lu, 19 June 2018

Bei Qin, David Strömberg, Yanhui Wu, 25 May 2018

The Chinese government has invested heavily in surveillance systems that exploit information on social media. This column shows that these systems are very effective, even in their simplest form. From the government’s point of view, social media, although unattractive as a potential outlet for organised social protest, is useful as a method to surveil protests, monitor local officials, and disseminate propaganda.

Ashoka Mody, 01 April 2018

Simon Evenett, Johannes Fritz, 03 May 2018

A new front on protectionism has opened up in policymaking circles, with Chinese manufacturing being used as a pretext to raise trade barriers. This column presents the new Global Trade Alert report which challenges the empirical and conceptual basis for doing so. 

Richard Pomfret, 02 May 2018

China’s Belt and Road Initiative has the potential to extend the Eurasian Landbridge to include both the current China-Poland mainline to western Europe and a China-Istanbul mainline with spurs to the Middle East and North Africa. This column, the second in a two-part series, outlines the history of the initiative and argues that future construction on the network could be a major step towards Eurasian integration and greatly improve rail's competitiveness relative to air for time-sensitive shipments.

Lionel Fontagné, Gianluca Santoni, 30 April 2018

Country-pairs self-select in regional trade agreements, and this endogeneity biases the estimation of the impact of such agreements within a gravity framework. This column uses a framework for predicting which countries should engage in RTAs based solely on economic determinants, including global value chains, and compares this ‘natural’ geography of agreements with the actual geography. The results suggest that the endogenous geography of RTAs is shaped by the development of GVCs.

Stefan Legge, Piotr Lukaszuk, Simon Evenett, 17 April 2018

While the Trump administration’s proposed tariff increases on Chinese imports have grabbed the headlines, few realise that other trading partners have also raised tariffs on Chinese trade. This column examines the effects of the EU removing China from its General System of Preferences in 2012. As a result of the move, $242 billion worth of EU imports from China were subject to higher tariffs, raising EU customs revenue by an estimated $4 billion.

Kun Jiang, Wolfgang Keller, Larry D. Qiu, William Ridley, 15 April 2018

China’s government mandates that foreign investors in certain industries form joint ventures with a domestic Chinese partner. The column uses a dataset accounting for all joint ventures in China from 1998 to 2007 to show that this policy is successful in its aim of encouraging technology transfer from foreign investors to domestic operations. It finds empirical evidence for the existence of at least three channels through which this transfer takes place.

Eugenio Cerutti, Haonan Zhou, 09 February 2018

Chinese banks have continued to expand rapidly both domestically and abroad. Together, they constitute the largest banking sector in the world by far. This column places the Chinese banking system in a global context. Although very small relative to their domestic claims, Chinese banks’ foreign claims are substantial for many borrower countries in Asia, Africa, and the Caribbean in particular. Many of these banking connections are related to Chinese outward foreign direct investment, with fewer related to trade linkages.

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