The 355th Wenlan Financial Forum

Abstract：

We study whether lower bank risk capacity—rather than explicit state directives—can reallocate credit toward state-owned enterprises (SOEs) in China. A simple model with ownership-specific screening shows that when volume targets bind and the risk capacity tightens, optimal screening thresholds shift: screening loosens for SOEs and tightens for non-SOEs, generating a flight to SOEs. We test this prediction using 2016–2021 loan-level data from a large joint-stock commercial bank. Exploiting the 2018 Asset Management Rules, which forced non-standard assets back on balance sheet, we find that more exposed branches subsequently increase the SOE share of new credit; the effect is stronger where volume pressure is tighter and safe opportunities are scarcer. We also provide complementary evidence from executive zodiac-year windows that reduce managerial tolerance and thus risk capacity within the same bank–executive pair; effects amplify in more superstitious regions, after branch-head rotations, and post-COVID. External validation with listed firms shows post-2018 declines in non-SOE borrowing and investment. Overall, lower risk capacity under binding volume targets yields an unintended, bank-driven resurgence of SOEs through ownership-based credit reallocation.

Speaker Introduction：

Feifei Zhu is an associate professor at the School of Finance, Central University of Finance and Economics, and a doctoral supervisor. She is also a researcher at the Capital Markets and Corporate Finance Research Center of Peking University's National School of Development and at Xiangshuai's Digital Economy Studio. She received her Ph.D. from Peking University's Guanghua School of Management and was a visiting scholar at the University of Chicago. She has published over 30 papers in high-level domestic and international journals, including Economic Research Journal, Management World, China Economic Quarterly, Journal of Management Sciences in China, The Journal of World Economy, Journal of Financial Research, China Industrial Economics, Journal of Financial Markets, and Energy Economics. She has led two projects funded by the National Natural Science Foundation of China and participated in several projects funded by the National Natural Science Foundation and the National Social Science Foundation. Her course "Bank Management" was recognized as a National First-Class Undergraduate Course (offline). The "Financial Security Engineering and Regulatory Technology Laboratory" she co-participated in was rated as an "Outstanding Undergraduate Teaching Laboratory of Beijing Higher Education Institutions". She has won the first prize (third place) in the 13th Beijing Young Teachers' Basic Skills Competition, the Best Teaching Plan Award, and the Best Presentation Award. She also won the first prize (first place) in the 14th Young Teachers' Basic Skills Competition of Central University of Finance and Economics. In 2024, she was awarded the title of "Jingying Scholar" of Central University of Finance and Economics.