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The Nexus of Industrial Policy and Monetary Policy in China: A Text-Based Analysis
2025-03-07
Time: 10:00 am- 11:30 am, Mar. 7th, 2025
Speaker: Dun Jia
(Peking University)
Venue: 1F, Wanzhong Building, Langrun Garden, Peking University
Abstract:
China has been consistently implementing the industrial policy for targeted promotions of specific sectors of its economy. While the industrial policy agenda in China is completely determined at the higher end of the government, our paper highlights an important channel through which Chinese monetary policy carries out the industrial policy by directing credit to targeted firms and sectors. Based on the textual analysis ransacking the government documents and People's Bank of China's narratives on targeted industrial policy assessment and efforts, we provide a firm-specific metric that quantifies the degree of exposure to the targeted joint industrial and monetary policy efforts. We find that the industrial and monetary policy interactions in China effectively promote the targeted entities after one year and the effects persist in the ensuing years. Our results suggest that the structural monetary policy is exercised as part of the overall industrial policy in China.
Speaker:
Dun JIA, Assistant Professor at the Peking University HSBC Business School. He holds a Ph.D. in Economics from the University of Maryland (2016). His research interests lie in macroeconomics, monetary policy, asset pricing, and the Chinese financial market. His current research focuses on the micro-foundation of quantitative macroeconomic models, and on the applications of market structure and incomplete information in understanding monetary policy transmission and asset pricing. His work has been published in international journals such as the American Economic Review, Review of Finance, Journal of Economic Dynamics and Control, as well as Chinese journals including the Journal of Financial Research and Journal of World Economy. He has led and participated in several projects funded by the National Natural Science Foundation of China and the Ministry of Education's Humanities and Social Sciences Fund. He has been advising the State Council, National Development Bank and Agricultural Development Bank of China in various projects.