Prof. Rongrong Sun is going to present her research at the FernUniversität in Hagen

The Center for East Asia Macroeconomic Studies is very honored to welcome Prof. Rongrong Sun from the Henan University, China on the 9th of august in Hagen. Prof. Sun will present her current research as part of her talk called “What Explains Household Borrowing and Credit Constraints? Evidence from China” (see also abstract below). After the talk all present will have the possibility to ask questions or discuss the findings that Prof. Sun presented.

Further information are available at the homepage of the chair of Macroeconomics from the FernUniversität (you can find it here).

Abstract:

This  paper uses the three rounds of the CHFS survey (2011and 2013) to  examine the determinants of household credit demand and credit constraints in China. In 2011, about the half of the households  that had a desire of bank credits were facing credit constraints, which  declined to 34 percent in 2013. In general, the credit market  participation rate in China is moderate, 14 percent in 2013, which is partly accountable to troublesome application  procedures and financial illiteracy among households.
The empirical estimation results suggest that income, wealth  and  education qualifications are the main factors driving credit market participation,  while high income, high wealth and more education lower credit  constraints. The family size, the home ownership and being self-employed  have positive significant impact on both.
The likelihood of being credit constrained and the chance of obtaining a loan, while being unemployed significantly increases the likelihood of being credit constrained only.
In China, the likelihood of being credit constrained peaks at 33 years old.
Moreover, the results show that people in the western region are less likely to be credit constrained on average. This implies the existence of regional imbalance in financial developments in China, despite the current general credit ease.

[CEAMeS DP13 ] – “Structural change, rebalancing and the danger of a middle-income trap in China”

CEAMeS Discussion Paper No 13 | 2018

Helmut Wagner

China is currently experiencing a structural change toward tertiarization and an implied growth slowdown associated with it. The paper investigates whether this growth slowdown is merely cyclical or a negative trend, and further what China is doing or should do to avoid falling into a “middleincome trap,” a problem many emerging economies have experienced in recent decades. The pitfalls of the current “soft” rebalancing policy in China are analyzed in the context of this development.

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