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  • Simola, Heli (MIT Press, 2018)
    Asian Economic Papers 2 ; Summer 2018
    China has been a key participant in international fragmentation of production during the last decades. China has specialized mainly in labor-intensive manufacturing, but is striving to shift toward higher value-added production stages and production. At the same time, during recent decades, services have contributed increasing shares of valued-added to products produced through global production chains. For this reason we examine the evolving role of Chinese services in international production chains. Our results suggest that Chinese services account for an increasingly large share of production for the domestic market, and more recently have made increasing contributions to foreign production chains, which suggests that Chinese production is shifting to activities in production chains that are associated with higher value-added.
  • Kauko, Karlo (2021)
    Asian Economic Papers 3
    Published in BOFIT DP 2/2020
    Chinese banks likely have more nonperforming loans (NPLs) than officially reported. Banks’ NPLs often deviate from Benford's law.  As hidden NPLs earn no interest income, loan quality problems may erode the gross interest income of banks. Using stochastic frontier analysis, we estimate the interest income of a hypothetical profit-maximizing Chinese bank with no credit quality problems. Taking the deviation of actual interest income from the calculated efficient income, we then attempt to reveal the amount of hidden NPLs in Chinese banks. Our results uncover a substantial weakening in the quality of Chinese bank loan portfolios in 2016.