State ownership, bank loans, and corporate investment

We study the effect of bank loans on Chinese publicly listed firms' investment decisions based on the underinvestment and overinvestment theories of leverage. Evidence from China is of particular importance because China is the world's largest emerging and transitional economy. At first we show that there is a negative relationship between bank loan ratios and investment for Chinese publicly listed firms. And this negative relationship is much stronger for firms with low growth than firms with high growth. Secondly, we find that both short-term and long-term loan ratios are negatively correlated with investment. However, the higher the long-term loan ratios are, the weaker the negative relationship between long-term loan ratios and investment is. Thirdly, firm ownership only matters to the effect of short-term bank loans on investment in our sample. That is, the negative relationship between short-term loan ratios and investment is weaker for SOEs than for non-SOEs. Lastly, we show that the reform of China's banking system in 2003 has not strengthened the negative relationship between bank loans and investment. Our findings suggest that although Chinese state-owned banks are severely intervened by government policies, they still have a disciplining role on firms' investment, especially in firms with low growth.

Synoptic-scale controls of persistent low temperature and icy weather over southern China in January 2008

In January 2008, central and southern China experienced persistent low temperatures, freezing rain, and snow. The large-scale conditions associated with the occurrence and development of these snowstorms are examined in order to identify the key synoptic controls leading to this event. Three main factors are identified: 1) the persistent blocking high over Siberia, which remained quasi-stationary around 65°E for 3 weeks, led to advection of dry and cold Siberian air down to central and southern China; 2) a strong persistent southwesterly flow associated with the western Pacific subtropical high led to enhanced moisture advection from the Bay of Bengal into central and southern China; and 3) the deep inversion layer in the lower troposphere associated with the extended snow cover over most of central and southern China. The combination of these three factors is likely responsible for the unusual severity of the event, and hence a long return period