Rui Zhang
Rui Zhang (Ray) is an Associate Professor of Economics at the Business School of Sun Yat-sen University in Shenzhen, China. He obtained his bachelor degree from Renmin University of China in 2013 and his PhD degree from Peking University in 2019. He was a visiting PhD student at Yale University during 2016-2018. From 2019 to 2022, he served as an Assistant Professor of Economics at Aarhus University in Denmark. He studies topics related to trade and spatial economics, especially the role of product quality in international trade. His work about how contracting environment shapes the quality and patterns of bilateral trade, appears on The Economic Journal.
He is from Shantou (Swatow), a coastal city in the south of China renowned for its local gastronomy.
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Rui Zhang (Ray) is an Associate Professor of Economics at the Business School of Sun Yat-sen University in Shenzhen, China. He obtained his bachelor degree from Renmin University of China in 2013 and his PhD degree from Peking University in 2019. He was a visiting PhD student at Yale University during 2016-2018. From 2019 to 2022, he served as an Assistant Professor of Economics at Aarhus University in Denmark. He studies topics related to trade and spatial economics, especially the role of product quality in international trade. His work about how contracting environment shapes the quality and patterns of bilateral trade, appears on The Economic Journal.
He is from Shantou (Swatow), a coastal city in the south of China renowned for its local gastronomy.
In their own words…
IEA: Can you tell us a little bit about your life story, what got you interested in economics, and how you decided to pursue an academic career?
Rui: I was born and raised in Shantou (Swatow), a coastal city in the south of China. From 2009 to 2013, I studied at Renmin University of China in Beijing for my bachelor’s degree in finance. During this time, I became increasingly fascinated by the growing role of Chinese companies in shaping international economic activities, so I decided to pursue a PhD degree, with a particular focus on firm-level research in international economics.
Luckily, I was admitted to the PhD program at National School of Development, Peking University in 2013, and I was fortunate to carry out my PhD research under the supervision of Prof. Miaojie Yu. Since then, my main research has focused on the product quality decisions of manufacturers in the context of trade. I became a visiting PhD to Yale University at a later stage, where I had the pleasure to be advised by and interact with Prof. Samuel Kortum, Prof. Peter Schott, and many other outstanding scholars there. My experience at Yale influenced me to pursue a more quantitative approach in studying international trade.
During 2019-2022, I was an assistant professor at Aarhus University in Denmark. In Fall 2022, I joined the Business School at Sun Yat-sen University in its Shenzhen Campus. Being adjacent to one of the most vibrant trade and innovation hubs, I am looking forward to turning the rich industry insights in Shenzhen and the Greater Bay Area into impactful academic research.
Why do I choose an academic career? My PhD advisor, Prof. Miaojie Yu, once mentioned that being an academic helps one achieve “mind-body peace and freedom,” and that idea struck me immediately. The same idea has grown stronger as I’ve come to realize that the profession offers numerous opportunities to travel and engage with people of diverse backgrounds, enriching my life experience. It is indeed a luxury to make a living out of what you love to do, and such a privilege is shared by many of us in academia.
IEA: In your recent work, you study the function of road infrastructure in carrying out China’s “dual circulation” strategy, which prioritizes boosting domestic consumption, is pivotal. Can you briefly summarize your findings? What made you interested in this topic?
Rui: I have the pleasure of collaborating with Prof. Guanghua Wan at Fudan University, Dr. Xu Wang at China International Capital Corporation, and Prof. Xun Zhang at Beijing Normal University on a paper entitled “The impact of road infrastructure on economic circulation: Market expansion and input cost saving.” In this paper, we aim to emphasize the idea that for a geographically vast and diverse economy like China, boosting domestic demand entails building solid transportation infrastructure to reduce domestic trade costs. When discussing reductions in tariffs, trade economists typically formalize the effects in both the output market and the input market. We show that these ideas also apply to the case of domestic trade cost reductions. Better road infrastructure benefits a manufacturer by lowering not only its costs to sell to customers but also its costs to source inputs. Both effects tend to lower the costs of domestically produced goods, thus boosting domestic demand and consumption.
What made me interested in this topic? It holds both academic interest and policy importance. Most of us probably agree that the international market is usually more volatile than the domestic market, albeit larger in its size. Therefore, my understanding of the idea of “dual circulation” is to balance between the international and domestic markets and to cultivate more robust and predictable domestic demand forces for long-run economy development. In my view, cultivating domestic demands entails solid domestic infrastructure to enhance the business environment, one aspect of which is high-quality transportation infrastructure that reduces domestic trade barriers. Hence, it appears straightforward for us to investigate the role of road infrastructure in boosting domestic demand at the first place.
IEA: Another paper you worked on studies how automation is associated with firm productivity, quality, and employment in Indonesia. Can you briefly summarize your findings?
Rui: I am very fortunate to have been working with Dr. Lili Yan Ing at Economic Research Institute for ASEAN and East Asia (ERIA) since I was a PhD student. The article entitled “Automation in Indonesia: Productivity, Quality, and Employment” published as a chapter in Robots and AI: A New Economic Era is one of our collaboration outputs.
Thanks to the comprehensive firm-level information about the production and trade of Indonesian manufacturers, we were able to link firm-level automation decision to firm-level characteristics and outcomes. In this article, we use firm-level direct imports of automation equipment to measure the automation adoption decision by firms. In the cross-sectional analysis, we find that Indonesian firms that directly import automation equipment are larger and more productive, have lower labor shares, but pay higher wages. We also find that imports of automation equipment are associated with improved firm performances over time, including increased output, a greater number of production workers, a higher export share, and an improvement in inferred product quality.
IEA: Why is this research relevant today?
Rui: I think that automation is a typical example of how new technologies are usually perceived as “double-edge swords”. Back in the 18th century, the Industrial Revolution was perhaps the first time that human labor was massively replaced by machines. The same story has been happening again when nowadays industrial robots and artificial intelligence (AI) outperform humans in many tasks and jobs in ways that shock many of us.
Therefore, I think it is critical to understand the impacts of new technologies based on what we have already experienced, especially the efficiency gains in production and the distributional consequences among workforces, so that one can adjust to and embrace these changes more positively. I hope that the knowledge and insights generated today about the effects of automation and AI help us both to forecast the impacts of other new technologies more accurately and to adapt to them more smoothly.
IEA: Why is it important for economic research to be diverse and inclusive?
Rui: From a positive perspective, I think the main purposes of economic research are to describe economic phenomena and to explain them using a theory that encompasses cost-benefit trade-offs. To me, a diverse and inclusive mind of economic research involves an openness to any views, facts, and findings that may or may not challenge existing beliefs, and a willingness to refine a theory based on them. I believe such a mindset helps to maintain the explanatory power and the generality of economics as a social science.
From a normative perspective, many of us, especially scholars from developing economies, study economics to understand what leads to a prosperous economy and the happiness of its people. To me, a diverse and inclusive mind of economic research also means the empathy towards individuals in diverse economic, social, and cultural contexts, and the wisdom to comprehend their incentives and constraints and to propose viable improvements. I am convinced that such a mindset helps to strengthen the effectiveness and value of economics as a tool for formulating policies to enhance welfare and promote equality.