Abstract: This article examines how China’s subnational leadership rotations have affected local governments’ policy choices. Utilizing the annual government work reports that outline provincial policy priorities, I find that shuffled leaders choose similar economic policies across different provinces, and this translates into similarities in several policy outcomes. I then show that such policy isomorphism has been driven mainly by convergence in which topics these reports cover, rather than by convergence in how the provincial leaders discuss a given policy issue. However, according to the event study estimates, this economic policy similarity may disappear soon after the shuffled leader leaves office, thus implying that the policy convergence might be transitory. One plausible explanation for these findings is that leadership rotations often indicate that the central government favors the policies implemented by these shuffled leaders, so they tend to replicate some of these policies after moving to the destination province.

Abstract: In this article, I use a regression discontinuity design to quantify the race between Chinese cities to build taller skyscrapers. I begin by characterizing this height competition with a game-theoretic model for multi-stage, two-player, all-pay auctions with carryover. The dominant mixed strategy equilibrium of this dynamic game implies that a city would be more inclined to construct a taller skyscraper if its current tallest building is merely shorter than the tallest in the rival city, and this inclination is discontinuous at which the heights of these two buildings are equal. Utilizing a large data set of China's skyscrapers constructed between 2004 and 2019, I confirm the presence of this between-city contest by empirically identifying the discontinuity in a city's probability of constructing a taller building. I also find that this height competition has been more prevalent among the cities with fewer historic amenities or with leaders that have lower promotion likelihoods prior to the start of office.

Abstract: Because of the potentially large and important effects of the extremely ambitious Belt and Road Initiative (BRI) launched by China in late 2013, considerable attention has been given to the motives for, and repercussions of, the BRI-driven infrastructural projects. Yet, the non-infrastructural outward foreign direct investment (FDI) from China to BRI countries, which varies quite substantially across different sectors and different countries, has not yet received much attention. In contrast to some recent studies showing that the massive initiative has increased China’s total FDI outflows to fellow BRI countries, in this paper, based on our sector-level difference-in-differences models, we find that effect to be statistically insignificant. Yet, at the same time, we provide empirical evidence on the sectoral pattern of China’s outward FDI before and after 2014 indicating that China’s FDI outflows to BRI countries have significantly increased in sectors characterized by overcapacity and contributing to pollution in China, thereby demonstrating that China’s BRI-driven outward FDI has been very selective in terms of sectors. We confirm these findings with a variety of robustness checks and show that it is BRI countries with relatively low institutional quality that have been more likely to receive these types of FDI from China. We thus speculate that Chinese firms have been motivated to place FDI investments in BRI countries for the sake of alleviating China’s own overcapacity and pollution problems. Our findings lead us to suggest that, although these sectoral patterns are consistent with the different stages of economic development in which China and its fellow BRI-identified countries find themselves, Chinese investors and host country governments should be more concerned with the potential for unwanted side-effects of the FDI investments so that the mutually beneficial effects of the BRI can be sustained into the indefinite future among all countries involved.