A research paper co-authored by Professor Xiong Wei, Academic Advisor, along with Assistant Professor Wang Yuheng from the School of Finance at the Central University of Finance and Economics (as co-first author), and Associate Professor Zhang Jinfan from The Chinese University of Hong Kong, Shenzhen, has been accepted for publication and published online in the Review of Financial Studies (RFS). Titled "Price and Volume Divergence in China’s Real Estate Markets: The Role of Local Governments," the paper is set to appear in this leading international journal.

The Review of Financial Studies (RFS) is a premier academic journal in the field of finance. Published by Oxford University Press on behalf of The Society for Financial Studies, RFS was established in 1988 and is widely regarded as one of the three top-tier journals in finance, alongside the Journal of Finance and the Journal of Financial Economics. The journal covers core areas such as market microstructure, asset pricing, corporate finance, financial intermediation, and behavioral finance, and is dedicated to publishing high-quality research that integrates both theoretical and empirical approaches.

# Article Introduction #

Title：

Price and Volume Divergence in China’s Real Estate Markets: The Role of Local Governments

Author：

Jeffery (Jinfan) Chang, Yuheng Wang, Wei Xiong

Abstract：

During the COVID-19 pandemic (2020-2022), Chinese cities witnessed a paradox: residential land and new house prices surged while transaction volumes plummeted. We attribute this to local governments’ active price management through supply controls, land acquisitions by local government financing vehicles (LGFVs), and limits on new home sales permits. Cities more dependent on land sales and land-backed debt before the pandemic experienced greater price increases and price–volume divergence, with LGFVs buying more land at higher prices than other buyers. These interventions helped sustain fiscal financing but deepened developers’ financial distress, revealing unintended consequences of local governments’ fiscal strategies during downturns.