I just came from China where I spent an intensive week giving talks at UIBE and Peking University and meeting lots of outstanding academics (including several Tilburg/EBC alumni). I am truly impressed how the academic
scene in economics and finance has developed since my last visit in 2014. Luckily, the weather also played a positive role during the week, with a mostly blue sky. And not being able to access twitter for five days might actually have been positive for
One important question that came up again and again was to which extent research on the Chinese financial system is of interest and relevance for a non-Chinese
audience; my response was always an emphatic yes. First, there are a number of valuable sources of micro-data, including firm- and bank-level data. There have also been several interesting macroeconomic developments and policy changes over the past years
that can be exploited (boom-bust cycle in the stock market; branch deregulation; expansion of postal savings bank into lending; changes in corporate governance rules).
Second, the financial system in China is a very diverse one. On the one hand, it seems antiquated, with an important role for large state-owned banks and (until recently) quite some restrictions, including on interest rates. On the other hand, financial
development has leap-frogged the West, primarily in payment services but increasingly also in other areas, with an important role for BigTechs; when I asked my host whether the Chinese bills I had brought from my last visit were still valid, he laughed and
said that it might be difficult to pay with cash at all. These challenges will provide new research questions to be answered primarily with micro-data.
the question is no longer whether China is different but what we can learn from these differences between China and other countries as well as differences within China. China stands to become not only a powerhouse in economic research but also an important
source for novel research questions and data!