Xiaodong ZHU
Prof. Xiaodong ZHU
Area Head of Economics
Chair of Economics

3917 7488

KK 904

Academic & Professional Qualification
  • Ph.D. (economics), University of Chicago, 1991
  • M.S. (statistics), Wuhan University, 1985
  • B.S. (mathematics), Wuhan University, 1982

Xiaodong Zhu joined the Faculty of Business and Economics at the University of Hong Kong as a professor in 2022. Prior to that, he was a professor in the Department of Economics at the University of Toronto, where he taught for 30 years. He is a leading expert on the Chinese economy and his research on China has been published in top economics journals such as the American Economic Review, Journal of Political Economy, Journal of Monetary Economics, International Economic Review, Journal of Development Economics, Review of Economic Dynamics, and Journal of Economic Perspectives.

  • China in the Global Economy (undergraduate common core course)
  • Topics in Macroeconomic Research of China (for graduate students)
Research Interests
  • Chinese Economy
  • Growth and Development
  • Macroeconomics
Selected Publications
  • “Trade Wars and Industrial Policy Competitions” (with Jiandong Ju, Hong Ma, and Zi Wang), forthcoming in Journal of Monetary Economics.
  • “Finance, Endogenous TFP, and Misallocation” (with Chaoran Chen and Ashique Habib), American Economic Review: Insight, 5 (3), 409-426, 2023.
  • “Structural Change and Aggregate Employment Fluctuations in China” (with Wen Yao), International Economic Review, 62 (1), 65-100, 2021.
  • “The Varying Shadow of China’s Banking System”, Journal of Comparative Economics, 49 (1), 135-146, 2021.
  • “The Effect of Migration Policy on Growth, Structural Change, and Regional Inequality in China” (with Tongtong Hao, Ruiqi Sun, and Trevor Tombe), Journal of Monetary Economics, 113, 112-134, 2020.
  • “Trade, Migration, and Productivity: A Quantitative Analysis of China” (with Trevor Tombe), American Economic Review, 109 (5) 1843-72, 2019.
  • “Factor Market Distortions across Time, Space and Sectors in China” (with Loren Brandt and Trevor Tombe), Review of Economic Dynamics, 16, 39-58, 2013.
  • “Modernization of Agriculture and Long-Term Growth” (with Dennis Tao Yang), Journal of Monetary Economics, 60, 367-382, 2013.
  • “Understanding China’s Growth”, Journal of Economic Perspectives, 26 (4), 103-124, Fall 2012
  • “Agriculture and aggregate productivity: A quantitative cross-country analysis” (with Diego Restuccia and Dennis Tao Yang), Journal of Monetary Economics, 55 (2), pp. 234-250, March 2008.
  • “Fiscal Shocks and Fiscal Risk Management,” (with Huw Lloyd-Ellis), Journal of Monetary Economics, 48, pp.309-38, 2001.
  • “Redistribution in a Decentralized Economy: Growth and Inflation in China under Reform,” (with Loren Brandt), Journal of Political Economy, 108, pp.422-39, 2000.
  • “Optimal Fiscal Policy in a Stochastic Growth Model,” Journal of Economic Theory, 58, pp. 250-89, 1992.
Recent Publications
Trade wars and industrial policy competitions: Understanding the US-China economic conflicts

We provide the first quantitative evaluation of the impacts and interactions of the US-China trade wars and industrial policy competitions. We extend the model in Caliendo and Parro (2015) by incorporating sectoral external economies of scale. We find that (i) under our baseline calibration of scale economies, the “Made-in-China 2025” (“MIC 2025”) subsidies tend to improve the welfare of both China and the U.S.; (ii) the US gains from Trumpian tariffs if China does not retaliate, and the gain is larger if China had implemented the “MIC 2025” project; (iii) in a non-cooperative tariff game targeting on high-tech industries supported by the “MIC 2025”, both China and the U.S. impose high tariffs and endure welfare losses; and (iv) if it is feasible for the U.S. to subsidize its own high-tech industries, the U.S. would reduce its tariffs on high-tech imports from China and benefit from its own industrial subsidies. These results (i) provide a rationale for trade wars and industrial policy competitions between the U.S. and China and (ii) suggest that industrial subsidies, if properly implemented, may generate less distortion than import tariffs as a means of international competition.