On October 22, Professor Sun Weizeng of the Joint Research Institute at Nanjing Audit University and Research Fellow Liu Xueliang of the Institute of Economics at the Chinese Academy of Social Sciences delivered invited lectures at the CESD Young Scholars Salon. Their respective presentations were entitled ‘The Challenge of Homogeneity in China’s Strategic Emerging Industries: The Role of Digital Government and Its Mechanisms’ and ‘Rail Transit Policy Regulation and Local Government Debt Risk: Evidence from the 2018 Rail Transit Policy.’ Associate Professor Liu Yuhai, Director of CESD’s Regional Economic Applications Laboratory, chaired the event. Professor Li Lanbing, Director of Nankai University’s Strategic Development Department, and Professor Yu Yongze of CESD’s Institute of Industrial Economics served as discussants. Attendees included Professor Zhou Mi, Director of CESD’s Center for Urban and Regional Economic Research; Professor Wang Jiating; Assistant Professor Wang Ran; Assistant Research Fellow Sun Pengbo; Associate Professor Zhang Guojian of the Joint Research Institute at Nanjing Audit University; and other faculty and students.
Professor Sun’s lecture presented a two-stage game model with incomplete information incorporating policy competition among local governments and firms’ location choices, revealing how government digital transformation affects industrial homogeneity across cities. An empirical analysis using provincial integrated government service platforms as a policy shock found that digital government development effectively reduces homogeneity in strategic emerging industries. The mechanism analysis showed that digital government encourages local governments to differentiate their choices of leading industries and improves the precision of support for industries with comparative advantages. It also reduces institutional transaction costs and information asymmetry facing firms’ investments, facilitating the free and efficient movement of capital. Heterogeneity analysis indicated that the effect is more pronounced between cities that are closer in space and time but differ more substantially in their levels of economic development, and in provinces with higher-quality platforms. Further analysis suggested that the current reduction in industrial homogeneity primarily reflects differentiated development across regions, rather than greater specialization and collaboration.
Research Fellow Liu’s lecture examined the national policy introduced in 2018 to tighten approval of rail transit projects and prevent uncoordinated local investment and debt risk. Using panel data for Chinese prefecture-level cities and data on bonds issued by local government financing vehicles from 2006 to 2023, the study found that the policy effectively restrains excessive local rail transit investment and prevents continued debt accumulation. However, it also produces spillover effects, constraining economic growth and fiscal operations in affected cities. These effects extend to the local government financing vehicle bond market, increasing credit spreads and triggering rating downgrades.
Professor Sun Weizeng is a professor and doctoral supervisor at the Joint Research Institute of Nanjing Audit University, a recipient of a national young talent program award, and an associate editor of the Journal of Regional Science. His research focuses on digital economic development, the development of a unified national market, and sustainable urban growth. He has published more than 100 papers in leading Chinese and international journals, including Social Sciences in China, Economic Research Journal, Journal of Management World, American Economic Journal: Economic Policy, and Journal of Urban Economics. He has led major National Social Science Fund projects and NSFC General Program and Young Scientists Fund projects. His research has received academic honors including the Ministry of Education’s Award for Outstanding Research Achievements in Higher Education Institutions.
Liu Xueliang is Director of the Income Distribution Research Office and a research fellow at the Institute of Economics, Chinese Academy of Social Sciences, as well as a senior research fellow at the National Institution for Finance and Development. His principal research interests include macroeconomics, real estate economics, and income distribution. He has published more than 30 papers in journals including Economic Research Journal, China Industrial Economics, The Journal of Quantitative and Technical Economics, and Economic Perspectives, and has contributed to more than ten research monographs.
