Table of Content

15 April 2025, Volume 0 Issue 4

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Theoretical Economics

Dual Urban-Rural Structure, Urban Bias, and Resident Consumption

Wang Wen-fu, Zeng Bin

2025, 0(4):  3-17. 

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The key to building a new development pattern with the domestic circulation as the main-body and the mutual promotion of domestic and international dual circulation lies in expanding consumption, with the focus of this expansion on rural areas. The main goal of the rural revitalization strategy is to boost rural consumer demand, and its implementation relies on the support of fiscal expenditure. By incorporating the urban-rural dual structure into a New Keynesian Dynamic Stochastic General Equilibrium (DSGE) model, this study explores the impact of China’s fiscal expenditure structure on consumption insufficiency and its transmission mechanism in this context. The results suggest that the root cause of consumption insufficiency may lie in the income distribution imbalance between urban and rural areas under the dual economic structure. Fiscal expenditure has exacerbated this imbalance, as China’s fiscal spending has long been biased toward urban investment, which in turn increases the returns to urban factors of production. Although the labor from the rural sector can flow into cities and share some of the benefits of urban development, the rural sector is unable to invest in the capital markets. The capital returns are mainly captured by urban residents, this situation has led to a widening income gap between urban and rural residents, further contributing to the overall consumption insufficiency in the country. While adjusting the fiscal expenditure structure to favor rural areas can alleviate this imbalance to some extent, it is unlikely to reverse the crowding-out effect of fiscal expenditure on consumption. Therefore, in order to expand and upgrade consumption, the government should adopt a comprehensive approach to gradually eliminate the urban-rural dual structure and achieve integrated urban-rural development.

An Analysis of Carbon Leakage Effects of Smart City Construction

Wang Jun, Hao Si-min

2025, 0(4):  18-29. 

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Smart city construction can not only improve the efficiency of resource allocation, but also have an important impact on urban carbon emissions and carbon leakage. Through the construction of an economic theory model and the application of the relevant data from 285 prefecture level cities in China from 2009 to 2019, this paper conducts a study. The findings show that the construction of smart cities has significantly reduced carbon emissions in the local area and has a positive carbon leakage effect on other regions, mainly manifested as carbon leakage to other cities (within the regions) within the province, while there is no significant carbon leakage effect between inter provincial cities (between regions). There are significant differences in the carbon leakage characteristics exhibited by cities of different scales in the construction of smart cities. Both small and large cities show a positive carbon leakage effect, with the carbon leakage of small cities occurring within the region, while that of large cities is reflected between regions. The medium sized cities have insignificant carbon leakage effects due to the mutual cancellation of positive effects within the region and the negative effects between regions. The resource based cities exhibit significant positive carbon leakage effects in the construction of smart cities, and the positive effects within the region are significantly stronger than the negative effects between regions, while the carbon leakage effects of non resource based cities are not significant. The construction of smart cities has promoted green technology innovation and industrial structure upgrading, which in turn has triggered carbon leakage effects. These results imply that in the process of smart city construction, measures should be tailored to local conditions to prevent carbon leakage, and regional coordination should be strengthened to jointly promote the carbon reduction work.

Public Economics & Administration

GAI and Construction of an Employment-Friendly Tax System

Li Jia-nan, Liu Rong

2025, 0(4):  30-42. 

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The surge of GAI has brought hope to humanity, however, it has also profoundly affected employment through the substitution effects. The current tax system with a preference for scientific and technological innovation will further catalyze this substitution effect and accelerate the process of“machine for human”replacement. Due to the employment structure dominated by older and low skilled workers, which will exist for a long time, China needs to pay more attention to the strong substitution effect of generative artificial intelligence on employment and the potential large-scale and global technological unemployment it may bring. It should also work to promote the transformation of the tax system from a“science and technology innovation preference”to an“employment friendly”one. In terms of specific paths, it is recommended to adopt a prudent approach of adjusting tax expenditures: firstly, to refine tax expenditures on technological innovation, especially to reduce tax expenditures on harmful employment technologies, and implement total quantity control. The second is to increase the tax based expenses for hiring labor. In the short term, three special tax deduction items can be added: an increase in the number of full-time employees, an increase in wage levels, and the conversion of temporary employment to full-time employment. Additionally, the scope of special groups eligible for tax deductions can be expanded. In the long term, the reform of value-added tax on social insurance premiums can be implemented. The third is to improve the tax based expenditure on skills training, such as increasing the special additional deduction for continuing education expenditure and pre tax deduction for employee education expenditure from the dimensions of quota and deduction period, and establishing a special fund for skills training.

Can Green Fiscal Policy Improve Energy Use Efficiency? Evidences from“Comprehensive Demonstration Cities for Fiscal Policies to Promote Energy Conservation and Emission Reduction”

Bai Dong-bei, Liu Xi-meng

2025, 0(4):  43-56. 

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The green fiscal policy is an important policy tool for government to carry out environmental governance. Exploring the impact of green fiscal policy on energy utilization efficiency is of great significance to actively and steadily promote the dual carbon goals. Starting from the comprehensive demonstration cities of energy conservation and emission reduction fiscal policies, this paper empirically analyzes the impact of green fiscal policies on energy utilization efficiency and their mechanisms. The research results indicate that the green fiscal policies have significantly improved energy utilization efficiency, and this positive impact is more significant in the eastern regions, the central regions, the renewable resource cities, and the cities with great potential. The mechanism test has found that green fiscal policies can significantly improve energy utilization efficiency by forming a “central and local joint force”, a“government and enterprise joint force”, and local government’s “self-driving force”. Further test indicates that the green fiscal policies can enhance the long-term effects of energy efficiency and economic performance. Therefore, it is recommended that local governments should explore new models of green finance according to local conditions, focusing on building a low-carbon structure effect of central-local cooperation, promoting the green scale effect of government-enterprise cooperation, and exerting the regulatory constraint effect of government self driving force. They should continue to promote innovation in the green finance system and continuously improve energy utilization efficiency.

Modern Finance

Research on the Micro-Effect of Macro-Prudential Policy for Cross-Border Financing: From the Perspective of Enterprise Operational Risk

Lu Wen-li, Lu Sheng-rong

2025, 0(4):  57-70. 

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Exploring the micro effects of macro-prudential policies is beneficial for regulatory authorities to better grasp the mechanism of policy and implement more precise regulation. Taking the event of the People’s Bank of China implementing macro prudential management of the full caliber cross-border financing as a quasi natural experiment, this paper uses the data of listed enterprises to construct a double difference model to analyze the impact of macro prudential policies of cross-border financing on the operational risks of micro enterprises. The findings show that the macro prudential policies of cross-border financing can help reduce the operational risks of enterprises, and this policy effect is more obvious in the highly leveraged enterprises and enterprises with strong financing constraints. The mechanism analysis reveals that to carry out macro prudential management of cross-border financing can suppress the degree of financialization of enterprises, thereby reducing their operational risks. Further research has found that a tight monetary policy combined with macro prudential policies for cross-border financing can further reduce operational risks for enterprises. The“dual pillar”regulation can bring better operational stability effects, and the combined effect of the two policies is mainly reflected in the mature and declining enterprise samples. Therefore, the regulatory authorities should continue to improve the macro prudential management framework for cross-border capital flows, unblock the transmission channels of macro policies at the micro level, and further establish and improve the“dual pillar”regulatory framework, enhance the consistency of macro policy orientation, and firmly hold the bottom line of preventing systemic financial risks.

Development of Internet Financial Supermarket and Enterprise Innovation Investment

Fu Shun, Wang Zheng-wei, Xiang Hong-yu, Wang Yu-tong

2025, 0(4):  71-83. 

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Innovation investment is a kind of important fuel for entity enterprises to achieve innovative development. Based on the data of listed companies on the Main Board of Shanghai and Shenzhen Stock Exchanges from 2011 to 2021, this paper discusses the impact of the development of Internet financial supermarkets on enterprise innovation investment by combining with the secondary indicator (investment business index) in the Digital Financial Inclusion Index System. The findings show that the more actively the financial products are traded online in the Internet financial supermarket, the higher the innovation investment of enterprises in the region. This promotional effect is more prominent in SMEs, private enterprises, high-growth enterprises, and during the periods of high economic policy uncertainty. The mechanism analysis reveals that the online trading of financial products in the Internet financial supermarkets has a wealth effect and a competition effect, namely, the development of Internet financial supermarkets has increased the proportion of internal financing of enterprises and reduces the cost of debt financing of enterprises, thus promoting enterprise innovation investment. The moderating effect analysis finds that the internal and external supervision system, which are represented by independent directors and regional financial supervision, will weaken the promotional effect of the development of Internet financial supermarkets on enterprise innovation investment. Therefore, the government can deeply integrate the steady development of large Internet financial platforms with the accelerated implementation of innovation-driven strategies, so as to further empower enterprises to increase their innovation investment.

Business Administration

Research on the Mechanism and Utility of Artificial Intelligence Empowering New Quality Productivity: From the Perspective of New Quality of Productivity Factors

Xu Hao, Xiao Yi, Zhu Zhi-yong, Li Hao

2025, 0(4):  84-96. 

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How artificial intelligence can promote the formation of new quality productivity has become a major theoretical and practical issue faced by China’s economic and social development. Based on Marxist productivity theory, this paper conducts a mechanism analysis. The findings show that artificial intelligence can promote the general transformation of productivity factors, generating new quality labor materials and labor force. The combination of these two can reduce labor input and sales costs through intelligent production and sales, improve production and sales efficiency, and thus promote the development of new quality productivity. The production relations play an important regulatory role in the effectiveness of artificial intelligence. Taking the data from 3931 A-share listed companies from 2010 to 2022 as samples, this paper makes use of a two-way fixed effects model for an empirical analysis. The preliminary results have confirmed the promoting effect of artificial intelligence on new quality productivity, and the endogeneity and robustness tests ensured the validity of the conclusion. The mechanism test results reveal that labor input and sales costs both play a partial mediating role in the above relationship, with significant direct and indirect effects. The protection of intellectual property rights and the openness of local public data in production relations can both significantly enhance the promoting effect of artificial intelligence on new quality productivity. The heterogeneity test results indicate that artificial intelligence has a significant promoting effect on the new quality productivity of different regions and industries, with a stronger driving effect on the western region and the service industry. Accordingly, in order to accelerate the formation of new quality productivity, attention should be paid to generating new quality production factors, adjusting production relations, and increasing fiscal and financial support.

Can Supply Chain Finance Promote Enterprises to Focus on the Main Business?

Yang Xing-quan, Zhang Qing-yan, Liu Ying

2025, 0(4):  97-110. 

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As an important part of modern financial services, supply chain finance is of great significance to the development of enterprises. By selecting the panel data of A-share listed companies in Shanghai and Shenzhen stock exchanges from 2010 to 2022, this paper conducts a test on the impact mechanism of supply chain finance on enterprises’ focus on main business and its economic consequences. The findings show that supply chain finance has significantly promoted enterprises to focus on the main business, and the longer the years, the greater the capacity and the higher the level of supply chain finance the enterprises carry out, the better their focus on their main business. This promotion effect is mainly due to the“resource access effect”and“information governance effect”brought by supply chain finance, which can be achieved by reducing corporate financing costs, easing financing constraints, improving corporate information transparency, and restraining executives’ excessive investment behaviors. Moreover, the above effect is more significant on enterprises with lower level of regional financial development, in industries under depression, and without bank-enterprise relationship. The expansion analysis reveals that supply chain finance can improve the performance of enterprises on their main business while promoting the focus of enterprises on their main business. Therefore, enterprises should actively carry out supply chain finance and build stable cooperative relationships; the government should implement policies according to enterprises and create a favorable environment; and the financial institutions should innovate supply chain financial products and services, accurately match the demands of enterprises, jointly help enterprises focus on their main business, strengthen the supporting function of supply chain financial services for the real economy, and promote the optimization and upgrading of the industrial chain supply chain.

Industry & Trade

Research on the Influencing Factors of Employment Changes in China from the Perspective of Dual Circulation

Zhou Xin-ji, Yuan Tang-jun

2025, 0(4):  111-125. 

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While the Chinese economy is growing rapidly, employment growth is relatively slow. It is necessary to clarify which factors affect employment changes. On the basis of the calculation of the number of employed people and skill composition in 97 major industries in China from 1995 to 2021, this paper adopts the global input-output analysis framework and the hierarchical structure decomposition method to decompose the employment changes in China from 1995 to 2021. The results show that due to the tendency of participating in labor-intensive links in the global value chain division of labor, the employment growth of highly skilled labor is slower than the average expansion speed of higher education, and the phenomenon of labor resource mismatch is more obvious. From 1995 to 2021, the domestic cycle consistently dominated employment growth, and after joining the WTO in 2001, the driving effect of the international cycle became more significant. However, after the outbreak of the global financial crisis, it gradually declined with the weakening of external demand. At the domestic demand level, the increase in consumption of technology intensive manufactured goods, labor-intensive service goods, and public service goods has a greater driving effect on employment, and has become more prominent since 2007. The employment driving effect of domestic consumption upgrading is significant. At the level of external demand, the increase in consumption of labor-intensive and technology intensive manufactured goods has a greater driving effect on employment, reaching its peak from 2001 to 2007 and then entering a downward trend. Based on this, it is recommended to steadily promote industrial upgrading to alleviate the problem of labor mismatch, increase residents’ income to expand domestic demand, and guide the improvement of consumption structure to promote employment growth. Attention should be paid to preventing and controlling the impact of international production transfer and changes in consumption structure on the employment market.

The Gap in Factor Endowment and the Green Productivity Effect of Foreign Investment Openness

Chen Yuan, Ru Yu-cong, Sun Jing-yi

2025, 0(4):  126-139. 

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As an important measure of the new quality productivity, Green Total Factor Productivity (GTFP) reflects the concept of green development in the new era and the requirements for high-quality development. Starting from the perspective of factor endowment gap, this paper analyzes the impact and the micro mechanism of the policies encouraging foreign investment on green total factor productivity of enterprises. Based on the China Industrial Enterprise Database and Industrial Enterprise Pollution Database from 2000 to 2013, this paper adopts the Malmquist-Renberg Index method to measure the green total factor productivity of industrial enterprises. The relaxation policy of foreign investment control in China is identified through the Foreign Investment Industry Guidance Catalogue, and the impact of the gap in factor endowments between enterprises and local areas on the green total factor productivity of enterprises is examined. The research results indicate that whether the policy of encouraging foreign investment can improve the green total factor productivity of enterprises depends on whether the production technology of enterprises can match the local factor endowment structure. If the gap in factor endowments between enterprises and local areas is too large, it will weaken the effect of foreign investment opening policies on the improvement of green total factor productivity of enterprises. The inherent mechanism is that enterprises whose production technology does not conform to the local factor endowment structure will experience slower progress in green technology, lower management efficiency, and lower concentration of product allocation when faced with policies encouraging foreign investment, resulting in a decrease in their green total factor productivity.

Modern Accounting

Industrial Robot Application and Product Market Performance: From the Perspective of Supply Chain Resilience

Niu Yu-hao, Xiao Yao

2025, 0(4):  140-152. 

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The application of industrial robots has injected strong momentum into economic and social development. Taking Chinese A-share listed companies in Shanghai and Shenzhen stock exchanges from 2007 to 2022 as research samples, this study investigates the impact of industrial robot application on the product market performance of enterprises from the perspective of supply chain resilience. The findings indicate that industrial robot applications can significantly improve the product market performance of enterprises. The analysis of the impact mechanism reveals that the application of industrial robots can optimize the supply-demand matching and stabilize the supply-demand relationship of enterprises, thus improving the product market performance of enterprises. The heterogeneity test shows that in the enterprises with high employee education or in the labor-intensive enterprises, the application of industrial robots has a stronger effect on improving the market performance of enterprise products. Further analysis reveals that the application of industrial robots in the supply chain has spillover effects, and the application of industrial robots can improve the financial performance of upstream and downstream enterprises in the supply chain. To this end, it is necessary to vigorously develop the industrial robot industry, support and encourage enterprises to widely apply industrial robots, so as to improve their product market performance.

Fair Competition Review System and Differentiation of Enterprise Commercial Credit Financing

Zhai Shu-ping, Jia Rui-min, Zhao Yu-jie

2025, 0(4):  153-164. 

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Establishing a fair competition review system to prevent excessive and improper government intervention in the market is conducive to ensuring that resource allocation is based on market rules, market prices, and market competition to achieve maximum efficiency and optimization. Taking the A-share listed companies in Shanghai and Shenzhen stock exchanges from 2010 to 2022 as samples, this paper examines the impact of the fair competition review system on the differentiation of commercial credit financing between state-owned enterprises and private enterprises. The findings show that a fair competition review system can reduce the degree of differentiation in commercial credit financing between the two. The analysis of the impact mechanism reveals that the fair competition review system can reduce the market position gap and the default risk gap between state-owned enterprises and private enterprises, thus reducing the degree of differentiation in commercial credit financing between the two. Further research has found that the fair competition review system has a more significant effect on reducing the differentiation of commercial credit financing between the two in industries with lower competition levels and regions with better trust environments. To this end, it is necessary to strengthen the implementation of the fair competition review system, incorporate the implementation of fair competition review into the assessment and accountability indicator system of local governments, and explore the establishment of a fair competition review and supervision system that includes multiple stakeholders such as operators, industry associations, and the general public.