Chen Lin, Randall Morck, Bernard Yeung, Xiaofeng Zhao, 22 December 2017

Chinese stocks rose sharply overall on news of President’s Xi’s 2012 policy cracking down on corruption, but non-state-owned enterprises in the country’s least liberalised provinces actually lost value. This column argues that China has taught the world something interesting – that prior market liberalisation makes anticorruption reforms more valuable. Once market forces are activated, bribe-hungry officials no longer grease the wheels but instead become pests and invite eradication.

Shang-Jin Wei, 01 November 2017

Could the housing prices in China crash? In this video, Shang-Jin Wei explains whiat are the potential concerns, and how the Chinese government could mitigate them. This video was recorded at the "10 years after the crisis" conference held in London, on 22 September 2017.

Leonardo Iacovone, Mariana Pereira-López, Marc Schiffbauer, 30 October 2017

In spite of its potential, the use of digital technology is still basic in most developing countries. This column presents evidence that firms in Mexico facing higher external competition have used IT more intensively and efficiently. External competition has encouraged them to make the necessary complementary investments in innovation and organisational changes.

Mariassunta Giannetti, Xiaoyun Yu, 30 October 2017

One of Chinese President Xi Jinping’s defining policies has been in the fight against corruption, which hinders innovation and growth by creating privileges for established firms. This column shows that extensive corruption in China may indeed have hampered the process of firm progress, and that the anti-corruption campaign has been a good move towards favouring an efficient allocation of resources and, ultimately, sustained growth.

Francisco Costa, Jason Garred, João Pessoa, 24 September 2017

In addition to being a competitor for other countries’ industries, China has also become an increasingly important consumer of goods produced elsewhere. This column looks at how the steep rise in ‘commodities-for-manufactures’ trade with China has affected workers in Brazil. While the analysis confirms a negative effect of Chinese import competition on employees of manufacturing firms, it also suggests that growth in trade with China has created some winners in Brazil, with wages rising more quickly in parts of the country benefiting more from increasing Chinese demand.

Kalina Manova, Zhihong Yu, 22 September 2017

Pinpointing how multi-product firms organise their operations is key for understanding the drivers of global competitiveness. This column presents a theory on the behaviour of multi-product firms when cost and quality competitiveness jointly determine export performance. Using Chinese data, it finds that firms’ production and sales activity across products and markets is governed by a product hierarchy based on quality. This phenomenon also determines how firms respond to economic shocks.

Peter Robertson, Longfeng Ye, 11 September 2017

The conventional wisdom is that labour reallocation has been a key driver of China’s growth miracle, and slowing migrant labour flows and rapid wage growth have raised concerns over whether this source of growth has run its course. This column argues that the literature on growth and labour reallocation in China has been dominated by a method that, relative to the now standard growth accounting model, substantially overstates the gains. Allowing for this and for human capital differences across sectors, sectoral labour reallocation has not been a key source of productivity growth in China.

Dalia Marin, 07 September 2017

Previous research has shown that China's entry into the WTO in 2001 has had a profound impact on jobs and wages of low-skilled workers in the US in sectors exposed to Chinese imports. The same is not true for Germany. This column argues this is because the import-side trade adjustment to low-cost competition had already happened before the rise of China, because the rise of Eastern Europe offered new export opportunities for German firms, and because China’s love for product quality found a perfect match in German products.

Antoine Bouët, David Laborde, 06 September 2017

During his election campaign, Donald Trump repeatedly announced that he would impose tariffs on imports from China, Mexico, and Germany. This column evaluates the likely outcomes should the US instigate trade wars by imposing such tariffs. In all scenarios, the net effect on US welfare and GDP is either zero or negative. Such trade wars would also have wider negative effects for the trading partners, and potentially, the world economy.

Myrto Kalouptsidi, 09 September 2017

China’s shipbuilders have doubled their market share in recent years. It is hard to determine the role of industrial policy, particularly subsidies, in this because we do not know what policies are in place. This column argues that subsidies decreased shipyard costs in China by between 13% and 20% between 2006 and 2012. These policy interventions have led to substantial misallocation of global production with no significant consumer surplus gains. Japan, in particular, has lost market share.

Gérard Roland, David Yang, 05 August 2017

Studies have shown that there is strong inertia in culture because values and beliefs are formed through intergenerational transmission. Much less is known about how culture changes, and which aspects of the changes in values and beliefs are permanent or temporary. This column examines the effects of the Cultural Revolution in China on urban elites, and reveals that the lack of access to higher education affected people’s beliefs throughout their life. Also, while the ‘lost generation’ passed down their greater mistrust in the government to their children, their changed beliefs on the roles of effort versus luck were transmitted to a much lesser degree.

Thomas Piketty, Li Yang, Gabriel Zucman, 20 July 2017

Between 1978 and 2015, China moved being from a poor, underdeveloped country to the world’s leading emerging economy. But relatively little is known about how the distribution of income and wealth within the country changed over this period. This column presents the first systematic estimates of the level and structure of China’s national wealth since the beginning of the market reform process. The national wealth-income ratio increased from 350% in 1978 to 700% in 2015, driven mainly by the increase of private wealth.

Hidemichi Fujii, Shunsuke Managi, 16 June 2017

Patent applications are a good indicator of the nature of technological progress. This column compares trends in applications for artificial intelligence patents in Japan and the US. One finding is that the Japanese market appears to be less attractive for artificial intelligence technology application, perhaps due to its stricter regulations on the collection and use of data.

David Autor, David Dorn, Gordon Hanson, Gary P. Pisano, Pian Shu, 20 March 2017

The discussion of the decline in US manufacturing during the 2016 presidential election campaign largely focused on job losses. This column examines the effects of Chinese import competition on another metric for the health of the US manufacturing sector – innovation.  Firms whose industries were exposed to a greater surge of Chinese import competition from 1991 to 2007 experienced a significant decline in their patent output as well as their R&D expenditures. While politicians’ ‘obsession’ with manufacturing is primarily due to job losses, an accompanying reduction in innovation may well affect economic growth in the longer term.

Ravi Kanbur, Yue Wang, Xiaobo Zhang, 15 March 2017

Sharply increasing inequality became an integral part of the narrative on Chinese development since the beginning of the reform process in 1978. Over the past decade, however, many studies have argued that inequality has been plateauing, or even declining. This column uses several datasets, including household surveys and regional-level government statistics, to show evidence of a mitigation of inequality in the early 21st century, and indeed, declining rates over recent years. Possible drivers of this turnaround are urbanisation, transfer and regulation regimes, and tightening rural labour markets.  

Pol Antràs, Teresa Fort, Felix Tintelnot, 12 March 2017

A growing body of economic research documents the potential negative effects of increased trade integration, often with a focus on increased Chinese import penetration. This column argues that some US firms benefit significantly from increased import opportunities as they lower their costs and expand. Protectionism in the form of higher domestic tariffs would decrease these domestic firms’ competitiveness both at home and abroad.

Emine Boz, Luis Cubeddu, Maurice Obstfeld, 09 March 2017

After intensifying through the 2000s until the Global Crisis, the ‘uphill’ flow of capital from poor to rich countries decelerated and has recently reversed. This column documents that saving shifts by China, commodity-exporting emerging and developing economies, and advanced economies played key roles in accounting for the apparently puzzling pattern in the pre-crisis decade. Ongoing policy uncertainties in advanced economies mean large and persistent downhill flows of capital are unlikely in the near term. Going forward, capital flows to emerging and developing economies will need to be supported by policies that enhance the benefits of inflows, temper capital flow volatility, and improve the resilience and depth of domestic financial markets.

Italo Colantone, Piero Stanig, 20 February 2017

The revival of nationalism in western Europe, which began in the 1990s, has been associated with increasing support for radical right parties. This column uses trade and election data to show that the radical right gets its biggest electoral boost in regions most exposed to Chinese exports. Within these regions communities vote homogenously, whether individuals work in affected industries or not. 

Meredith A. Crowley, Huasheng Song, Ning Meng, 10 February 2017

The Trump administration’s announcement of its intention to impose a 20% tax on goods imported from Mexico and its calls for a 45% import tariff on goods from China have alarmed businesses and consumers alike. This column uses data on the foreign market entry decisions of Chinese firms to assess the impact that tariff scares and trade policy uncertainty have on trade flows. The evidence suggests that Trump's threats to raise tariffs can reduce US imports even if the administration doesn't follow through with the threatened tax increases.

Italo Colantone, Piero Stanig, 23 November 2016

The vote for Brexit was a watershed moment in European politics. This column investigates the causal drivers of differences in support for the Leave campaign across UK regions. Globalisation in the form of the ‘Chinese import shock’ is found to be a key driver of regional support for Brexit. The results suggest that policies are needed that help to redistribute the benefits of globalisation across society. 

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