China’s macroeconomic performance affects trading partners: How can their policies respond?

Aftab Alam, Jingmei Ma and Ibrar Hussain

Journal of Policy Modeling, 2024, vol. 46, issue 2, 448-474

Abstract: Utilizing expanded data analysis, this study aims to determine how China's macroeconomic performance affects the global economy. Employing the Global Vector Auto Regression (GVAR) model, we investigate the impact of China's macroeconomic variables on the economies of its selected trading partners throughout the world. For 2000Q1–2019Q4, developed countries (the US, Hong Kong), developing Europe countries (Russian Federation and Poland), and two developing Asia countries (Vietnam and India) show that Chinese macroeconomic performance has a greater impact than middle east and central Asia, Sub-Saharan Africa, and Western hemisphere. The Chinese GDP shock hits emerging Europe harder because of its extensive Russian production network. Results reveal that Chinese depreciation impacts developing Europe and Asia, while the Chinese stock market shock hits advanced economies more. Advanced and developing Asian economies are greatly affected by TV shock. Chinese FDI affects the Middle East and Central Asia, because of the China-Pakistan Economic Corridor. China trading partners use macroeconomic statistics to assess their economic priorities, industrial strengths, and weaknesses to create national interest plans. Currency adjustment, trade policies, domestic stimulus, and market diversification can minimize negative effects or capitalize on possibilities from China's macroeconomic conditions.

Keywords: China macroeconomic performance; Global economy; Global vector autoregression model; Transmission of shocks; Extended data (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0161893824000073
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:46:y:2024:i:2:p:448-474

DOI: 10.1016/j.jpolmod.2024.01.005

Access Statistics for this article

Journal of Policy Modeling is currently edited by A. M. Costa

More articles in Journal of Policy Modeling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().