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.

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 impact of social distrust on household saving in China using a microsample from the China Family Panel Studies (CFPS). We find that social distrust leads to an increase in savings within households, in which households not living alone, with higher levels of education and urban households are more affected. We also find that social distrust affects household savings through raising risk expectations, reducing credit availability and amplifying risk spillovers from real estate markets.

We investigate the effect of the Consumer Financial Protection Bureau’s 2015 disclosure of complaint narratives on reducing racial disparities in financial services. Employing a triple-differences approach that compares the performance of affected and unaffected financial institutions across communities with varying racial compositions, we find that post-disclosure, minority communities experience welfare enhancements. These include higher savings interest rates (amounting to over $50 million annually), reduced maintenance fees, and lower interest rates on auto loans and credit cards. The research emphasizes the broad impact of service quality disclosure in mitigating racial disparities in savings and lending markets.

Using an extended overlapping generations (OLG) model, we theoretically prove that functional inequality resulting from weak labor bargaining power can be a key driver of high saving rates, as observed in China and other labor- abundant Asian emerging markets. Income distribution that favors capital over labor may attract excess capital investments and hence lead to high saving rates. The link between inequality and saving is especially prominent for the household sector because excess return on capital motivates the working-age population to increase their retirement savings. We also find empirical support for our theoretical predictions using China’s sectoral-level data.

This paper explores the relationship between longevity risk and health status transition under the framework of life cycle model to explore the optimal insurance allocation including annuity and nursing insurance under different incidence scenarios and the old-age security needs of residents Based on the data from China Health and Pension Tracking Survey (CHARLS), this paper calculates the health state transition probability of residents and calibrates the health state transition probability by using the mortality data of Lee-Carter model, and then solves the optimal insurance decision of residents under different incidence scenarios by multi-period life cycle model The results show that the demand for first annuity and nursing insurance is influenced by initial endowment, health status, minimum living and bequest motivation Residents with lower initial endowments are reluctant to buy annuities and nursing insurance because of precautionary savings motivation Expenditure on care insurance when purchasing both annuities and care insurance may weaken the demand for annuities Secondly, under the interaction of longevity risk and health status transition, residents have higher disability probability and higher demand for annuity and nursing insurance under the scenario of expanding incidence Thirdly, under the optimal wealth decision, the optimal allocation of annuity and nursing insurance makes the wealth level of residents more stable

I show that issuing credit cards helps the bank compete for retail deposits in China. When credit card growth increases by 1%, retail deposit growth is expected to rise by 0.2% with regard to peers next year. This effect is stronger for small joint-stock banks compared with big state-owned banks. This is realized by introducing new credit card holders to visit the branch and open a savings account. DID test shows that after a shock that tightened new account opening, banks with higher credit card growth experienced a harsher decline in retail deposit growth. This paper highlights the customer introducing benefit of credit card promotion, which can provide an alternative explanation for the intensified competition in the credit card market in China. It also unveils the strategy that small banks can use to compete for the deposits of big state-owned banks, who intrinsically has more branches and retail customers.

We analyze the effects of exposure to industrial robots on labor markets and household behaviors,exploring longitudinal household data from China. We find that a one standard deviation increase in robot exposure led to a decline in labor force participation (-1%), employment (-7.5%), and hourly wages (-9%) of Chinese workers. At the same time, among those who kept working, robot exposure increased the number of hours worked by 14%. These effects were concentrated among the less educated and larger among men, prime-age, and older workers. We then explore how individuals and families responded to increased exposure to robots. We find that more exposed workers increased their participation in technical training and were significantly more likely to retire earlier. Despite the negative impact on wages and employment, we find no evidence of an effect on consumption or savings, which is explained by an increase in borrowing (+10%). While there is no evidence of an effect on marital behavior, we document that robot exposure led to a small decline in the number of children (-1%). Finally, we find that robot exposure increased family time investment in the education of children (+10%) as well as the investment in children’s after-school academic and extra-curricular activities (+24%).

We build a unified framework to quantitatively examine population aging and credit market frictions in contributing to Chinese economic growth between 1977 and 2014. We find that demographic changes together with endogenous human capital accumulation account for a large part of the rise in per capita output growth, especially after 2007, as well as some of the rise in savings. Credit policy changes initially alleviate the capital misallocation between private and public firms and lead to significant increases in both savings and output growth. Later, they distort capital allocation. While contributing to further increase in savings, the distortion slows down economic growth. Among factors that we consider, increased life expectancy and financial development in the form of reduced intermediation cost are the most important in driving the dynamics of savings and growth.

In this paper, we provide one of the first large sample comparisons of cash policies in public and private US firms. We first show that on average private firms hold less than half as much cash as public firms do. The higher cash holdings of public firms are partially caused by the fact that public firms add more to their cash reserves in a given year, even controlling for a number of spending and savings factors, than do similar private firms. At the same time, however, we find that among firms with excess cash holdings, public firms spend more of it than do private firms. Thus, public firm managers are more aggressive in both accumulating and spending cash reserves. Finally, consistent with the presence of financing frictions, we find that private firms’ cash-to-cash flow sensitivity is higher than that of public firms. Overall, our evidence supports both the agency conflicts and the financing frictions views of corporate cash policy.