Nonlinear Effects of Trade Uncertainty Shocks on Economic Resilience in China: Evidence From Province‐Level Data

Chao Wu, Ke Zhao, Yongfu Liu and Jinquan Liu

Review of Development Economics, 2026, vol. 30, issue 1, 679-690

Abstract: In recent years, China has been experiencing the combined shock of rising trade uncertainty and a slowdown in economic growth, yet the performance of different provinces under such downward pressure varies significantly. To address this, the paper innovatively applies the DF‐SV model to systematically identify overall trade uncertainty across Chinese provinces and, based on this, employs the GPSTR model to investigate the nonlinear effects of trade uncertainty on economic resilience. The findings reveal that China's trade uncertainty is highly sensitive to major domestic and international economic and trade crises and exerts a negative nonlinear impact by reducing economic resilience. Specifically, the negative impact of trade uncertainty on economic resilience is closely related to provincial economic, financial, and policy endowment factors, such as industrial structure, financial frictions, and the scale of fiscal expenditure. Provinces with more severe corporate financial frictions tend to be more adversely affected, whereas provinces with more advanced industrial structures and larger fiscal expenditures are relatively less affected. This study provides valuable insights and practical guidance for understanding the dynamics of provincial trade uncertainty in China and enhancing the resilience of economic development.

Date: 2026
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