Wu Xiaokang is a Nanjing University professor who teaches international economics courses at the Hopkins-Nanjing Center. He has spent the 2017-18 academic year at Johns Hopkins SAIS as a Visiting Nanjing Scholar, which enabled him to sit in on classes and focus on his own research. He recently published an article titled “Neighbors, Information Spillover and Firms' Import” with fellow HNC professor Han Jian in the Journal of Zhongnan University of Economics and Law. He was also my econometrics professor in the spring of 2017!
Do you have any comments on what it is like to teach at the HNC or the special nature of the institution?The HNC is a bilingual institution. Different languages means different cultures. Through shared experiences, people end up understanding each other. I think we could do an analysis of this by surveying a group of Americans and Chinese [outside the HNC], and then surveying a group of HNC students, and comparing their views on the China-U.S. trade dispute. You would find that ordinary Chinese people would say yes, let’s get into a trade war with the U.S., let’s boycott their products. The impact on the U.S. is of no concern—that is their attitude towards the U.S. If you spoke with HNC students, however, both sides would support holding negotiations to solve the issue. I think that when students leave the HNC, they come out not just concerned with U.S. national interests or Chinese national interests. They care about what is good for China-U.S. relations. The biggest benefit of the HNC in my opinion is that it breaks down preconceived beliefs and ideology. I also really appreciate the fact that professors from different academic backgrounds all work there together. Usually in China different academic departments are all very independent from each other. This gives HNC students a superior advantage, as they can evaluate issues from multiple perspectives. This allows them to be more objective about an issue than if they are looking at it from the perspective of one academic discipline.
What opportunities have you been able to take advantage of while in residence in DC?
One of the most valuable things has actually been sitting in on economics classes at SAIS. Last semester, I attended an econometrics class and an international trade class, which have been valuable in seeing how the professors teach the material. I was a brand new economics professor when I began at the HNC, and the chance to attend Professor John Harrington’s econometrics class at SAIS, which he has been teaching for more than 20 years, is really valuable in seeing how he helps the students understand the concepts. Dr. Pravin Krishna, who taught the class on international trade, was also very impressive.
What research have you been working on here in DC?
I have been working on regional trade agreements (RTA). The first aspect I’m researching is the utilization rate. We want to see how trade increases after RTAs are established. If we look at the issue from a micro perspective, we see that firms will not necessarily use preferential trade policies because they involve costs, like the cost of certifying that their products were produced within a certain region.
This is especially complicated nowadays with the prevalence of global value chains. We run into the issue of an “information cemetery,” where the firm itself knows the amount of value added and what components are coming from abroad. However, the process of certifying it for government approval is arduous in terms of time and money. So, ultimately, the problem is such that the firm may qualify for the preferential tariff that lowers costs, but the process of qualifying for it also incurs costs. Then firms have to make a choice according to their cost benefit analysis. This research shows that, while countries tend to think about trade policy without understanding the micro decisions of individual firms, the question has to be whether these firms are going to actually use the preferential tariffs. The other aspect I research is what kinds of effects these RTAs bring about in terms of trade diversion versus trade creation.
Is this your first time living in the USA? How has it differed from your expectations?
It’s interesting, because growing up in China, we start learning English from a young age, compared with Western students who don’t start learning Chinese perhaps until college. To help with that, we watch American movies, listen to American music, and we feel like we know America, but in fact I think we actually have very little understanding of America. Moving here was very different from my expectations. Communicating and exchanging views in English was challenging for me at the beginning.
Interview by Anna Woods, HNC Certificate/Johns Hopkins SAIS MA ‘18