World prospers China: Chinese private firms with lending before the China–United States trade war

Yin-Siang Huang, You-Xun Lu and Ning Tang

Applied Economics Letters, 2022, vol. 29, issue 10, 920-926

Abstract: This research investigates whether the National 13th Five-Year Plan of China and economic-political uncertainty affects Chinese private firms on bank loan spreads. First, we find that banks charge a significantly lower loan spreads during the period, and slightly reverse the effect with higher economic-political uncertainty. Second, the non-Chinese lenders during the period charge lower loan spreads than Chinese banks. Finally, for private firms with lending from non-Chinese banks, the borrowers without enough search record obtain a favoured bank loan spread, and facilitate Chinese firms for the loan purpose of capital expenditures during the period. Overall, global banks prosper Chinese private firms due to China’s stable national policies.

Date: 2022
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DOI: 10.1080/13504851.2021.1898531

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