The 42th “Theory and Policy” Seminar at RUC NADS

Local Government Response to Tariff Liberalization Evidence from China

Speaker: Huang Wei, Assistant Professor at National University of Singapore

Moderator: Liu Ruiming, Professor at National Academy of Development and Strategy, RUC

Time: September 26, 2019, Thursday, 9:30-11:00

Venue: Meeting Room 815, Chongde Building West Wing (Keyan Building Block A）

Abstract:

Trade liberalization generates winners and losers within a country. How do policies respond? In this paper, we investigate the responses of local governments to tariff liberalization in China. Tariff reductions reduced local fiscal revenue, mainly through lowering tax revenue from value-added tax and corporate income tax. More than 40% of this tax revenue reduction is due to a lower effective tax rate, suggesting that local governments loosened tax collection enforcement to compensate firms adversely affected by tariff cuts. On the other hand, tightened fiscal revenue constrained local government`s ability to provide social welfare programs or public goods, both of which we do not find positive responses.

Speaker’s profile:

Huang Wei, assistant professor at National University of Singapore, was a post-doctoral researcher at National Bureau of Economic Research in the United States. Doctor Huang received his PhD in Economics at Harvard University in 2016, Master Degree in Economics from National School of Development, Peking University in 2011, and Bachelor Degree in Physics from School of Physics, Peking University in 2008. Huang has been the Co-editor-in-chief at Economics of Transition since 2018. His research focus on public economics, labor economics and health economics. His studies are regularly published by influential academic periodicals including Review of Economic and Statistics, Journal of Labor Economics, American Economic Journal: Applied Economics, Nature, Journal of Economic Perspectives, and Management World.