The Influence of Economic Policy Uncertainty on Export Trade between China and ASEAN

Abstract

Facing with the complicated global situation, many countries change the economic policies at any time. The uncertainty of economic policies will increase, and the uncertainty risk will increase accordingly. The trade share between China and ASEAN was the largest in recent years, which showed the closeness and importance of the economic and trade cooperation between China and ASEAN. The macro-economy policies, trade policies and regional cooperation of China and ASEAN, will affect interests of both parties. Therefore, this paper aims to analyze the impact of the uncertainty of China's economic policy on the export trade between China and ASEAN. By using the uncertainty index of China's economic policy measured by Baker et al (2016)^[1] in 2003-2020, this paper makes an empirical analysis of the impact of the uncertainty of China's economic policy on the export volume of China to ASEAN. The results show that, the uncertainty of China's economic policy has a negative impact on China's export trade to ASEAN. Therefore, to better safeguard the export trade between China and ASEAN, methods such as joining the regional economic integration organization, optimizing the export industry structure, enhancing the innovation ability, and improving the institutional environment should be adopted to reduce the losses caused by the uncertainty risks of economic policies.