This paper examines how China allocates its newly accumulated foreign assets by analyzing the long-run relationship between net national savings, foreign exchange reserves, and outward direct investment (ODI). Using quarterly data from 2005 to 2023, a cointegrated vector autoregression framework shows that ODI—particularly through state-owned enterprises— has emerged as an important channel for recycling national savings abroad. Although short-run reserve fluctuations persist, sustained reserve accumulation has become less central to China’s external asset management. This study contributes to the literature by highlighting the institutional role of state ownership in shaping cross-border investment patterns and by identifying ODI as a strategic mechanism for channeling national savings internationally. The findings shed new light on China’s evolving approach to external asset allocation and its broader economic and geopolitical implications.

Using a novel and dynamic measure of fund-level herding that captures the tendency of a fund manager to imitate the trading decisions of the institutional crowd based on a sample of 3490 mutual funds in China for 21 years between 2003 and 2023, we find that funds with higher herding tendencies face significantly elevated delisting risks. Additionally, herding behavior is associated with shorter fund lifespans, smaller asset bases, and higher portfolio manager turnover rates. These results remain robust after employing a battery of methods to address endogeneity concerns. Collectively, our study demonstrates that herding substantially amplifies funds’ running risks.

We construct the China Crude Oil Volatility Index (CNOVX)—the first model-free, optionimplied measure of forward-looking oil price risk for China—using INE crude oil options from 2021 to 2024 and an adapted CBOE methodology that accounts for sparse strike availability via smooth interpolation and extrapolation. Our results show that CNOVX increases with trading activity in the futures market, declines with option volume, and is strongly predicted by the 30-day realized variance of the SC crude oil futures contract. External shocks, including the Russia–Ukraine conflict and the Geopolitical Risk Index, significantly elevate CNOVX levels. During the COVID-19 pandemic, mortality risk intensifies the volatility-amplifying role of futures trading and strengthens the volatility-dampening effect of options, while confirmed case counts have weaker influence. We further document a pronounced asymmetric leverage effect: negative futures returns raise CNOVX more than positive returns of equal size. However, volatility feedback effects are negligible, as changes in implied volatility respond primarily to contemporaneous market conditions. Overall, CNOVX serves as a timely and informative benchmark for monitoring risk in China’s evolving crude oil derivatives market, with valuable implications for investors, hedgers, and policymakers.

The Fibonacci sequence is created by the recurrence of Fn = Fn−1 + Fn−2 ( n ≥ 2; F0 = 0; F1=1) from which the nearly 38.2% or 61.8% is derived for revenue increase or decrease. It has been increasingly and widely studied in research on options market trading. The high volatility of the options market makes the option premium greatly affected by the growing emotional involvement of buyers and sellers before the position is closed. The efficient affective computing and measures may provide traders a rough guide to working out the route to a profit. Based on the practical application of Fibonacci-like sequence and affective computing of option trading data in China SSE (Shanghai Stock Exchange) 50ETF options, we concluded that profit statistically changes around 38.2% or 61.8% increase line once call options flood in the market and bring the rapid price acceleration. On the contrary, 38.2% or 61.8% is considered another temporary decrease line when the price quickly falls from the balance point of price under the influence of huge put options. The mixed emotions of greed and fear make the option premium commonly fluctuate in cycles. The Fibonacci-like wavelet analysis is only one of the options volatility strategies, and it does not change the nature of market uncertainty.

February 9, 2025 marks the 10th anniversary of the establishment of China's ETF options market. To celebrate this anniversary, China will open the ETF options market to qualified foreign investors on October 9, 2025. This is both an opportunity and a challenge. This is the first time in a decade that China has decided to open its ETF options market. The challenge is that foreign investors will face competition from China's 1.08 million options investors. This article will discuss the basic rules and requirements for options trading in China. In addition, we will introduce the application of Confusion Quotient sentiment index in options trading, and analyze how options contract premiums fluctuated significantly after the Fed cut interest rates by 50 basis points on September 18, 2024. Within a month, the Fed's interest rate cut triggered a sharp rise in call options contracts in China's options market, with a maximum profit of 3507.32%, and put option contracts suffered huge losses, with a maximum loss of 99.91%. Our findings prove that China's ETF options market is highly volatile, presenting both opportunities and challenges for foreign investors. Options trading is a double-edged sword, and you need to be cautious when entering the market.

While unintentional man-made disasters constitute the majority of man-made catastrophes, empirical evidence on their economic consequences remains scarce. Utilizing a unique dataset on extremely severe accidents (ESAs) in China and a nationally representative longitudinal household survey, we find that unintentional man-made disasters reduce individuals' willingness to take risks. We further demonstrate that the severity of official penalties following ESAs is positively correlated with both fatalities and economic losses, yet these punitive measures fail to mitigate the negative impact on risk preferences. Additionally, we find that ESAs reduce demand for riskier, high-return-oriented insurance products, though they do not diminish demand for protection-oriented, non-investment productslike health insurance. Our findings address a critical gap in the literature regarding the effects of unintentional manmade disasters on risk attitudes and insurance demand.

This paper examines why tax incentives fail to stimulate participation in China's third-pillar commercial pension insurance, emphasizing the role of rational inattention. Using household survey data from China Family Panel Studies (CFPS) spanning 2014-2022 and a difference-in-differences-in-differences (DDD) design, we find that pilot policy generated a statistically insignificant average effect on participation, with rational inattention - proxied by financial literacy - explaining much of its ineffectiveness. We develop a dynamic consumption-portfolio model featuring costly information acquisition, and then resolve limitations of standard models through a dynamic framework with distinct savings channels and policy-focused rational inattention. The models show that rational inattention distorts perceptions of tax benefits and wage growth, raising participation costs, while multiple savings channels dilute incentives. Only households with higher financial literacy substantially respond to the policy. Our results reveal how cognitive frictions undermine pension reform and offer implications for designing behaviorally-informed retirement schemes.

This paper examines the interactional phenomenon where an institutional complainee initiates a complaint and becomes a co-complainant with their original complainant against a third party that is proposed to have caused grievances to both participants. Institutional complainees initiate their third-party complaints when their complainants repeatedly refuse to affiliate with their attempts to shift responsibility or their proposed solutions. This shift from being the complainee to being a co-complainant is regularly accomplished through practices in which the institutional complainee: 1) produces implicit counter-complaints; 2) partitions complainants and themselves as sharing similar identities; and 3) highlights and upgrades their own grievances. Once complainants affiliate with their complaints, institutional complainees attempt to end the complaint sequences. The interactions end with a sense of solidarity sustained between the participants, even though no satisfying solutions are offered to the original complainants. The findings suggest that institutional actors can make relevant their noninstitutional identities and go against what is expected of them as institutional actors to achieve the institutional task of directing blame away from their institutions. Recorded phone conversations between local residents and various institutional actors during COVID-19 lockdowns in China serve as data for this study.

The Central Environmental Protection Inspector (CEPI) is a critical regulatory measure in China aimed at improving ecological quality. From a compliance cost perspective, we examine the impact of the CEPI on corporate environmental governance. The findings reveal an asymmetry in the CEPI's influence: it significantly promotes environmental governance efforts on the non-production side of enterprises, while having no substantial effect on the production side. Additionally, government environmental subsidies do not provide a resource incentive in the process of the CEPI influencing corporate environmental governance. However, local environmental governance pressure mitigates this asymmetry, leading the CEPI to significantly enhance environmental governance on both the production and non-production sides. Further analysis shows that under the synergistic effect of local environmental governance pressure, the CEPI encourages state-owned enterprises to focus on environmental governance on the production side, while non-state-owned enterprises tend to focus on the non-production side. Moreover, political connections reduce the positive impact of the CEPI on production costs under local environmental governance pressure. Finally, the CEPI also significantly encourages enterprises to expand their production scale. These findings offer valuable insights for refining the CEPI system to better promote corporate environmental governance.

To address the challenges posed by renewable energy integration in power systems, China is advancing the development of Pumped Hydro Storage (PHS). However, the rapid growth of PHS installations, coupled with strict regulations and a high reliance on capacity compensation, has led to increasing financial burdens on other utilities. One solution is to reallocate the capacity compensation through market-based approaches to implement the “beneficiary-pays” principle. To achieve this goal, an operational policy named ’partial-regulated dispatch’ is proposed in this study. The analysis of this policy encompasses two crucial dimensions: the dispatch mechanism and business models. The dispatch mechanism evaluates PHS’s capacity contribution to grid stability, while the business models focus on enhancing PHS profitability to reduce dependency on capacity compensation while ensuring long-term economic sustainability. Furthermore, the flexibility of PHS is introduced as a criterion for assessing system security contributions, considering both individual unit vibration characteristics and multi-unit commitment strategies. The case study shows that through partial-regulated dispatch, PHS can reduce its reliance on capacity compensation by nearly 50% while ensuring its regulation service via flexibility compensation. This policy effectively balances economic viability with system support capabilities. Moreover, flexibility compensation provides PHS operators with a risk mitigation strategy in the complex power market environment. Under an appropriate operational strategy and policy incentives, the flexibility can be enhanced by nearly 30% in a fully marketized scenario, contributing to both system stability and operational efficiency.