Zeyi Qian (钱则一)

This paper examines sectoral growth patterns across Chinese provinces during the country's economic takeoff in the early 2000s, following key policy reforms including trade liberalization, infrastructure expansion, business climate improvements, and relaxed rural-to-urban migration restrictions. We develop a spatial general equilibrium model based on the Melitz-Chaney framework to analyze how these factors interact and influence the geographic distribution of economic activity. Our model extends the heterogeneous firm approach to a multi-sector, multi-region setting, incorporating detailed sectoral and regional linkages. Using Chinese data, we calibrate the model and conduct counterfactual simulations to identify the key mechanisms driving regional development. Our results highlight manufacturing employment expansion as the primary driver of firm distribution and economic growth. While reductions in trade costs intensify competition and deter firm entry, improvements in the local business climate lower entry barriers and foster firm creation. Together, these factors shape China's overall economic growth and regional specialization. Finally, we quantify the contributions of manufacturing employment expansion, trade cost reductions, and business climate improvements to overall welfare gains.

• The 89th Annual Meetings of the Midwest Economics Association, March 21-23, 2025, Kansas City, Missouri
• Chair of Macroeconomics, March 4, 2025, University of Freiburg, Freiburg, Germany
• The 26th Göttingen Workshop "International Economics," February 26–28, 2025, Georg-August-Universität, Göttingen, Germany
• The 11th International Workshop on Regional, Urban, and Spatial Economics in China, June14-15, 2024, Southeast University, Nanjing, China
• 2024 Chinese Economists Society (CES) China Annual Conference, July 5-7, 2024, Zhejiang University, Hangzhou, China

This paper quantifies the role of firm-level scale economies in shaping the spatial distribution of firms and aggregate economic outcomes of Japan. We employ a spatial general equilibrium model based on the Krugman framework, calibrated to the Japanese economy in 2011. We simulate the model in levels and then introduce exogenous shocks to trade costs, technology, and firm entry to analyze their impact on firm distribution, aggregate GDP, and welfare. To isolate the contribution of scale economies, we compare these results with those obtained from a similar simulation using an Eaton-Kortum model, which, in its basic form, does not feature firm-level increasing returns to scale. Our findings reveal the extent to which the presence of scale economies in the Krugman model amplifies the effects of these shocks on Japan's aggregate economic performance compared to the EK model, thereby highlighting the significance of scale economies in the Japanese economic landscape. The analysis provides insights into the macroeconomic implications of agglomeration forces driven by scale economies in contrast to the mechanisms emphasized in trade models without such effects. We further classify workers by age and demonstrate that an increasing share of elderly workers exerts a positive impact on aggregate productivity and GDP growth. Our counterfactual simulations reveal that increasing elderly labor participation leads to net welfare gains. This finding aligns with Japan's policy initiatives aimed at enhancing economic sustainability through active senior employment. Specifically, elderly workers contribute to labor supply and consumption, thereby supporting the scale of local industries. Their continued employment sustains industrial agglomeration and the associated economies of scale. Additionally, their fixed presence in regions helps balance agglomeration trends, preventing excessive concentration.

The early 21st century saw the U.S. economy undergoing a profound structural shift, driven by the "China shock" following China's accession to the WTO. This trade shock initially significantly affected U.S. manufacturing, causing widespread job losses and economic disruption. However, contrary to expectations, the shock also accelerated the growth of the service sector, which emerged as a primary driver of economic expansion. A key mechanism behind this transformation was reducing labor relocation costs, enabling workers—particularly those with lower education levels—to switch industries and maximize their life utility. This adjustment not only offset the negative effects of the trade shock but also contributed to a re-optimization of labor market allocation. To understand this counterintuitive outcome, we develop a dynamic spatial model grounded in the frameworks of CDP and ACM. Our model integrates declining labor relocation costs with heterogeneity in workers' education levels and labor mobility. Numerical exercises using a toy model show that reducing labor relocation costs allows more low-educated workers to transition into the service sector. These findings highlight the critical role of declining labor relocation costs in mitigating trade shock impacts and achieving an optimal labor market allocation.

Using firm-level registration data and city-level statistics, this paper empirically investigates the relationship between city size and firm survival. The results reveal that firms in larger cities tend to have higher survival rates. Mechanism analysis suggests that larger cities create positive externalities—such as increased export opportunities, lower entry cutoff, and enhanced innovation capacity—that help mitigate the adverse effects of higher wages and costs. However, this positive relationship does not increase monotonically. We identify an inverted U-shaped relationship between Chinese city size and firm survival during 2001 to 2014, with an optimal city size of 5.59 million people, beyond which congestion costs begin to outweigh the agglomeration benefits.

When capital leaves a country and then flows back as Foreign Direct Investment (FDI), we call it round-tripping FDI. It is widely suspected that China's official FDI statistics contain a substantial amount of round-tripping FDI. However, it is difficult to quantify the round-tripping FDI due to the lack of data. In this paper, we propose two methods to identify round-tripping FDI. The first one tracks capital flows at firm level. If a firm in China invests in a foreign firm and the foreign firm makes an investment back to China shortly after, then we consider this investment to China as round-tripping FDI. Our second measure of round-tripping FDI adds to the first measure by including investments in China made by Chinese investors/firms registered in tax havens. By this second method, round-tripping FDI accounts for as much as 65 percent of the total FDI China received from 1999 to 2015. Our firm-level analysis shows that industrial enterprises facing higher tax burdens are more likely to make round-tripping FDI. We also show that at the city level, adjusted FDI statistics by subtracting the estimated round-tripping FDI are better predictors of local imports and exports. Finally, we show that provinces receiving higher shares of round-tripping FDI are more likely to be punished for illegal financial activities. Taken together, these findings suggest that our measures of round-tripping FDI, although noisy, are indicative of real transactions.

Adopting a spatial perspective on talent policies, this paper constructs a quantitative standard for Chinese urban talent policy, and scores 3308 talent policies in 293 prefecture-level cities. On this basis, by using spatial analysis methods, this paper characterizes the spatiotemporal differentiation and evolutionary processes of talent policies at the prefecture-level in China from 2012 to 2021. Meanwhile, this paper designs an evaluation index system for new quality productive forces in cities, and conducts a quantitative study on the relationship between urban talent policies and new quality productive forces. The results show that: (1) The comprehensive scores of talent policies exhibit a southeast-to-northwest gradient, featuring higher scores in the southeast and lower scores in the northwest. Specifically, the eastern region has maintained a high level of scores throughout, while the central region, despite starting from a lower base, has experienced rapid growth. In contrast, the western and northeastern regions have experienced relatively slower improvements. (2) Based on the analysis of urban types from the three dimensions of ``policy intensity-policy objective-policy measure", it is evident that cities with simultaneous progress in all three dimensions tend to expand from the coast towards the inland. Additionally, internal polarization is prominent in the western and northeastern regions. (3) The analysis of urban types based on the three dimensions of ``policy instrument-policy link- prioritized talent" reveals that the central region exhibits shortcomings in the use of safeguard policy instruments, while the western and northeastern regions lack adequate development policy instruments. The western region faces notable shortcomings in talent retention policies, while the northeastern region exhibits deficiencies in talent cultivation policies. While regions vary in their preferences for talent types, highly educated talents have universally emerged as the primary focus. (4) In practical terms, talent policies significantly enhance the development of new quality productive forces by leveraging the talent agglomeration effect, innovation-driven effect, and industrial upgrading effect, with distinct heterogeneities observed across regions and policy types. The research conclusions can provide decision-making references for local governments to formulate more practical talent policies. The marginal contributions of this paper lie in: Firstly, it innovatively designs a quantitative standard system for prefecture-level talent policies in China, encompassing three dimensions: policy intensity, policy objectives, and policy measures. This system was applied to score 3308 talent policy texts across 293 prefecture-level cities from 2002 to 2021, thereby establishing a panel database (2012-2021) of comprehensive scores and detailed indicators for China's prefecture-level talent policies. This provides comprehensive and robust data support for subsequent research. Secondly, employing spatial analysis methods, the paper systematically characterizes the spatiotemporal evolution of talent policies at the prefecture-level in China. It presents a panoramic view of their gradient distribution pattern, internal regional polarization characteristics, and the trajectory of spatial center shifts, constituting a valuable exploration into the spatial dynamics of nationwide prefecture-level talent policies. Thirdly, it constructs an evaluation index system for urban new quality productive forces and conducts a quantitative study on the relationship between talent policies and new quality productive forces. This research precisely identifies the heterogeneous effects of policies across regions, policy instruments, and policy links, offering new perspectives and evidence for understanding the spatiotemporal evolution and practical effectiveness of talent policies in Chinese cities.

As an important supplement to formal agreements and institutional arrangements, the establishment of international twin cities has strengthened trust and in-depth communication between cities, becoming an important catalyst and booster for international economic cooperation. Based on the perspective of foreign trade high-quality development, this paper examines the impact of the“circle of friends” formed by international twin cities on the export trade between cities using the data of matching pairs between 287 Chinese cities and 136 countries or regions in 2002-2015.The results find that: (1)The agree ments ofinternational twin cities have significantly promoted the export volumeand export value of Chinese cities by 10.0%and 11.6% respectively.(2) The trade promotion effect of international twin cities is more derived from trade creation rather than trade transfer. (3）In addition to affecting exports by intensive margins, international twin cities have also promoted the expansion margins of exports in terms of the number of product types and the proportion of high-tech industries.(4)With SARS and the global financial crisis as incident impacts, the agreements of international twin cities has strengthened the ability of Chinese cities to resist risks in exports. (5)The results of heterogeneity analysis show that the agree ments of international twin cities have more obvious export promotion effect on non-Belt and Road countries and geographically adjacent countries in China.

In the context of developing a high-level open economy, evaluating the impact and role of FDI from multiple perspectives is an important prerequisite for correctly drawing up the negative list of foreign investment access. From the perspective of enterprise survival and industrial security, this paper empirically tests the influence and mechanism of foreign capital on the host country. Specifically, on the basis of accurately measuring the survival rate of enterprises by using the micro big data of enterprise registration from SAIC (the State Administration of Industry and Commerce), we identify the economic effect of FDI on the host country from the perspective of enterprise survival, and examine the heterogeneity and mechanism of the Promotion Effect of FDI. At the same time, this paper also examines the impact of FDI on industrial security from the perspectives of technology availability, technology controllability and supply chain security. The results show that: (1) FDI significantly improves the survival rate of enterprises in host countries by encouraging new establishment of enterprises and reducing the death of existing enterprises. (2) Preference of foreign capital for local private enterprises in supply chain layout makes the survival promotion effect of private enterprises more obvious. (3) The entry of foreign capital promotes the survival of enterprises in host countries through efficiency and competition mechanism. (4) When the foreign investment market access policy intervention is less in the industry, FDI on the survival of the host country's enterprises to promote the effect is more obvious. (5) From the perspective of technology availability, technology controllability and supply chain security, FDI has improved the industrial security level of host country to a large extent.

As the cornerstone of building a comprehensive transportation system and a modern economic system, CHSR（China High-speed Railway）has greatly changed the way of national production and life, affecting the efficiency of spatial allocation of resources and reshaping the economic geography. The rapid development of CHSR, on the one hand, leads to the spatial concentration of production factors and resources and the peripheral development of small and medium-sized cities; On the other hand, brings about the increasingly fierce competition among small and medium-sized cities for high-speed railway stations. Are small and medium-sized cities battle for high-speed rail stations to "compete for inferior"? In order to answer this "paradox", based on the night light data and density gradient index, this paper re-measures the spatial agglomeration degree with defining the capital city or the central city as the core. On this basis, a theoretical hypothesis of "man-bear race" between the central cities that open high-speed railway and the small and medium-sized cities that compete for high-speed railway is put forward, and the hypothesis is verified by data. The research findings of this paper are as follows.(1) The opening of high-speed railway leads to the agglomeration of economic activities to provincial capitals or central cities, while small and medium-sized cities are becoming the peripheries, that is, "people cannot run faster than bears"; (2) Compared with the small and medium-sized cities without high-speed rail, the small and medium-sized cities with high-speed rail can achieve relatively fast economic growth, that is, "running ahead of their competitors"; (3) The theoretical logic of "man-bear race" well explains the "paradox" that small and medium-sized cities compete for " inferior position" through high-speed railway stations, that is, "they can't run faster than bears, but they have to run faster than their partners".