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The Response of the Chinese Economy to the U.S.-China Trade War: 2018–2019

Pao-Li Chang (), Kefang Yao () and Fan Zheng ()
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Pao-Li Chang: School of Economics, Singapore Management University
Kefang Yao: School of Economics, Singapore Management University
Fan Zheng: School of Economics, Singapore Management University

No 25-2020, Economics and Statistics Working Papers from Singapore Management University, School of Economics

Abstract: In this paper, we follow the micro-to-macro approach of Fajgelbaum et al. (2020) and analyze the impacts of the 2018–2019 U.S.-China trade war on the Chinese economy. We use highly disaggregated trade and tariff data with monthly frequency to identify the demand/supply elasticities of Chinese imports/exports, combined with a general equilibrium model for the Chinese economy (that takes into account input-output linkages, and regional heterogeneity in employment and sector specialization) to quantify the partial and general equilibrium effects of the tariff war at the product/sector/region/aggregate levels. This complements the studies that focus on the ex post response of the U.S. economy by Amiti, Redding and Weinstein (2019), Fajgel baum et al. (2020), and Cavallo et al. (2020).

Keywords: Chinese Economy; Tariff War; Elasticity Estimation; Regional Labor Market Adjustment; Welfare Analysis (search for similar items in EconPapers)
JEL-codes: F13 F14 F16 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2020-11-18
New Economics Papers: this item is included in nep-cna, nep-int, nep-sea and nep-tra
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