Speaker: Dun Jia (Peking University)

Time: 10:00 - 11:30 a.m., Mar 7, 2025, GMT+8

Venue: 1F, Wanzhong Building, Langrun Garden, PKU

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.

Source: Institute of New Structural Economics, PKU