Government Credit and Trade War

茹弘博士毕业于MIT斯隆管理学院，现任新加坡南洋理工大学商学院银行与金融系助理教授。茹老师的研究兴趣是金融经济学、债权人风险、信用风险等，在金融理论于实证研究方面有诸多建树，已在国际顶尖金融学术期刊Journal of Finance以及journal of Financial Economics上发表了2篇论文。

Using transaction-level trade data from China Customs and loan data from the China Development Bank (CDB), we analyze how government credit affects trade activities. We find that CDB credit to strategic industries at the top of the supply chain leads to lower prices, higher amounts, and more product varieties of export goods for firms in downstream industries. This increased import competition crowds out U.S. firms in the same industry but crowds in firms in downstream. In the recent trade war, the U.S. raised tariffs strategically on China’s imports that compete with domestic U.S. manufacturers rather than used as their inputs.