Ruan Rui | Internal Improvement and External Relocation — The Divergent Responses of Enterprises in
12moon5On that day, the event was hosted by the Tsinghua University PBC School of Finance and co-organized by the Tsinghua University PBC School of Finance International Finance and Economics Research Center.CIFERThe "organized by"2025International Trade Disputes and the Restructuring of Globalization: A Symposium on New International Economics"Successfully held in Beijing."
Central FinanceUniversityAssociate Professor Ruan RuiAttended the second sub-forum chaired by Du Yingxin, Associate Research Fellow at the China Institute for World Trade Organization Studies, University of International Business and Economics."International trade disputes"Share its title:Internal reform and external relocation—Divergent Responses from Enterprises in the US-China Trade FrictionThe article.
Ruan RuiHe is a tenured associate professor and doctoral supervisor at the Collaborative Innovation Center for China's Fiscal Development, Central University of Finance and Economics.2020He received his Ph.D. in Economics from Renmin University of China in 2008. His research interests include fiscal systems, local government behavior, and corporate investment. In recent years, he has published more than ten papers in authoritative domestic and international journals such as *Economic Research Journal*, *Management World*, and *World Economy*. His research findings have been reprinted multiple times in publications such as *Renmin University Press Reprints*, *Xinhua Digest*, and *Reform Reference*. He has presided over projects funded by the National Natural Science Foundation of China (Youth Project) and the Beijing Municipal Social Science Foundation (Youth Project). He is a member of the Ministry of Education's Philosophy and Social Sciences Innovation Team, "Research Team on Innovation of Basic Fiscal Theory and Fiscal and Tax Reform".
Ruan Rui
In her presentation, Ruan Rui pointed out that despite the negative impact of the tariff war, Chinese companies have demonstrated [resilience/ability].The article explores the strategic divergence between "internal improvement" and "external relocation." It constructs a monopolistic competition model incorporating internal R&D and exit decisions, depicting the trade-offs firms face between the "escape from competition effect" and the "survival pressure effect." Theoretical derivation shows that the firm's markup rate is the key mechanism influencing this game: firms with high markup rates tend to achieve "internal improvement" by increasing innovation; while firms with low markup rates are more likely to choose external investment in factories, achieving "external relocation" through capacity transfer. In the empirical research section, the article will...2018-2019The US tariffs imposed on China in 2016 served as a quasi-natural experiment, validating the role of differences in corporate market power in trade friction response decisions. The article reveals that while trade frictions impose universal costs, they also objectively accelerate the process of "survival of the fittest" within industries.
Du Yingxin
Du Yingxin, University of International Business and EconomicsShe commented on the article, stating that it offers a unique perspective and possesses both theoretical and practical significance, making important contributions to both academic and policy perspectives. Compared to existing literature, this article examines the impact of trade frictions on businesses.Integrating the "internal development" and "external relocation" strategies within a unified analytical framework, the paper creatively proposes a "screening mechanism" based on market power cost-plus rates. This not only enriches the theory in the relevant field but also reveals the structural impact and driving factors of trade frictions. She points out that the article could further explain the selection of identification methods and consider incorporating empirical tests on the exit or relocation of SMEs. Theoretically, it could also distinguish between "market exit" and "voluntary relocation" with high fixed costs, especially considering the difficulties faced by SMEs in relocating. Furthermore, the empirical results could be fully utilized to exclude competitive explanations arising from policy support or initial technological differences among firms, enriching this section.