US-China Trade War Research Articles

Carbon Market Efficiency and Economic Policy Uncertainty: Evidence from a TVP-VAR Model

This paper examines the dynamic linkages among economic policy uncertainty (EPU), the green bond market, the carbon market, and the macroeconomy using the time-varying parameter vector autoregressive (TVP-VAR) model with monthly data spanning from January 2016 to December 2021. Additionally, it assesses the robustness and accuracy of the empirical results through the Bayesian vector autoregressive (BVAR) model. The findings indicate that EPU negatively affects the green bond market in the short term but has a positive impact in the medium and long term. Conversely, EPU has a positive impact on the carbon market in the short term but a negative impact in the medium and long term. Furthermore, the green bond market negatively influences the carbon market in both the short and medium to long term. These results suggest that emerging markets, such as the green bond and carbon markets, are influenced by EPU. The adverse impact of the green bond market on the carbon market, however, contributes to expediting China’s attainment of its low-carbon objectives. Appropriate economic policies can play a vital role in accelerating the transition to a low-carbon economy. The study also reveals that the US-China trade war has expedited the development of green capital markets in China, despite its impact on the green economic transition in the country. These findings provide insights for the government and investors to formulate suitable strategies for risk mitigation.

Impacts of the US-China Trade Tension and RCEP on Vietnam-China Trade Balance

The paper aims to analyze the trade balance between Vietnam and China and assess the impact of its key determinants, with a focus on the US-China trade war, using the autoregressive distributed lag model for quarterly data from Q1 2009 to Q4 2022. The statistical analysis shows that although Vietnam's trade balance with China shows increasing deficits, the US-China trade war has a positive impact on Vietnam as its export-import ratio with China increases in both the long and short run. We also find that the impact of participation in the Regional Comprehensive Economic Partnership (RCEP) is positive but not statistically significant. We also find evidence that several factors have a positive and significant impact on the trade balance, including Vietnam's growth rate, Vietnam's industrial production index, and China's population. On the other hand, some factors, such as the exchange rate between Chinese yuan and Vietnamese dong and the population of Vietnam, are found to have a significant negative impact. These findings can provide evidence to help Vietnamese businesses and policymakers formulate trade policies with China, especially in the current complex geopolitical context.

Dynamic volatility among fossil energy, clean energy and major assets: evidence from the novel DCC-GARCH

The objective of this paper is to assess the dynamic volatility connectedness between fossil energy, clean energy, and major assets i.e., Bonds, Bitcoin, Dollar index, Gold, and Standard and Poor's 500 from September 17, 2014 to October 11, 2022. The main motivation of the study relates to examining the dynamic volatility connectedness mentioned during periods of important events such as the recent coronavirus pandemic and the Russia–Ukraine conflict which has shown the vulnerability of economic and financial assets, energy commodities, and clean energy. The novel Dynamic Conditional Correlation-Generalized Autoregressive Conditional Heteroskedasticity (DCC-GARCH) approach is employed for the investigation of the sample period mentioned. Empirical analysis reveals that both the total and net volatility connectedness between assets is time-varying. The highest connectedness among the assets is observed with the onset of the coronavirus (COVID-19) pandemic, and it increases with some important international events, such as the Russia–Ukraine conflict, the referendum of Brexit, China–US trade war, and Brexit day. On average, the result shows that 32.8% of the volatility in one asset spills over to all other assets. The DCC-GARCH results also indicate that crude oil, bonds, and Bitcoin act as almost pure volatility transmitters, whereas the Dollar index, gold, and S&P500 act as volatility receivers. On the other hand, clean energy is found neutral to external shocks until the first quarter of 2020 and after that time, it starts to behave as a volatility transmitter. Based on the obtained results, we offer some specific policy implications that are beneficial to the US economy and other countries.Graphical Dynamic volatility connectedness between fossil energy, clean energy, and major assets (Bonds, Bitcoin, Dollar index, Gold, and Standard and Poor's 500)

Navigating international competition with ESG: Insights from the US-China trade war

This study shows that the escalation of US import tariffs prompts Chinese exporters to strengthen their ESG engagement, strategically positioning themselves in the renewed competitive landscape. This finding is robust across various model specifications, sample selection methods, and ESG performance proxies. In addition, we document the ESG ranking improvement is stronger for firms with green innovation needs and those operating in industries with high domestic growth potential, which suggests that Chinese exporters aim for product differentiation to combat the tariff escalation. Moreover, the greater ESG engagement is more pronounced among state-owned enterprises, larger firms, and firms operating in pilot free trade zones, indicating firms with higher cost advantage pre-US-China trade war take greater steps forward in product differentiation.

Analysis of Stock Price Fluctuation Factors in Luxury Goods Industry Based on LVMH’s Stock Price

This article collects LVMH Moët Hennessy Louis Vuitton’s stock data in the past 11 years to analyze the factors affecting stock price fluctuations in the luxury goods industry. This article analyzes factors affecting stock price fluctuations by dividing time periods. Then it was concluded that the internal factors affecting LVMH’s stock price include the acquisition of Belmond and Tiffany and the provision of job opportunities for the younger generation. External factors affecting LVMH’s stock price include the US-China trade war, the COVID-19 pandemic, and the Russia-Ukraine conflict. Among them, the one that caused the most obvious fluctuations in stock prices was the acquisition of Tiffany. Based on the analysis of LVMH’s stock price fluctuations, corresponding suggestions can be made for the subsequent development of LVMH to increase profits and avoid risks. It can also provide stock investors with advice on whether to buy or sell stocks.

Trade Protectionism and International Trade Policy Study

In the context of globalization and the close interconnection of economies, international trade has become a key driver of economic growth and global cooperation. However, the resurgence of trade protectionism has posed a series of challenges to international trade. The trade war between the United States and China stands as one of the most prominent cases of international trade friction, providing a valuable empirical scenario for the study of trade protectionism and international trade policies. This paper begins with an overview of the US-China trade war, including the development of trade relations, the scale and structure of trade between the two nations, and the causes and key issues of the trade war. Subsequently, the article reviews the theoretical underpinnings of trade protectionism, focusing on the concepts and forms of protectionism, as well as the motivations behind it. Through the analysis of the US-China trade war case, the paper examines the direct and indirect impacts of this trade conflict on the economies of both countries and the international trade order at large. The research finds that while trade protection measures may benefit certain countries or industries in the short term, such practices are likely to harm the overall interests of the global economy in the long run, increasing uncertainty and instability within the international community. Finally, based on the current state of international trade, this paper proposes a series of strategies to address trade protectionism and offers insights into the future development trends of a new international trading system and international trade policies. The article emphasizes that in the face of the challenges posed by trade protectionism, the international community must work together through dialogue and cooperation to find long-term solutions to global trade imbalances, thereby promoting the shared prosperity and development of the world economy.

미중 무역전쟁의 예측 가능성

Purpose: This research is on the predictability of the prolonged US-China trade war that started in 2018, studying negotiation and settlement in this protracted trade war. Research design, data, and methodology: The paper uses the prisoner’s dilemma and the game called chicken, which are representative non-cooperative games in game theory, along with two-level game theory. Results: Both the U.S. and China are expected to have a negative economic impact on the world, but China is expected to suffer greater damage. The essence of the trade war is China’s all-out challenge to the United States, which prides itself on being a worldwide hegemony. Conclusions: When looking at the US-China trade war from a long-term perspective, China’s damage is expected to increase, and it is highly likely that the US will ultimately win.

CHINA-US STRATEGIC COMPETITION AND ITS IMPACTS ON AGRICULTURAL COOPERATION: AN ANALYSIS OF PAKISTAN AND UKRAINE

This article aims to examine the China-US strategic competition and its impacts on agricultural cooperation between the two powers. Over the past two decades, China`s comprehensive influence across the world has challenged the US hegemony that it has held for three decades. The US perceives China`s persistent economic growth and diplomatic influence as the main challenge to its supremacy in the world. The strategic competition between the two powers has also resulted in a trade war in recent years. China has been one of the top trading partners for the past two decades. Since, the early 2000s, China has been one of the main countries for the US for its agriculture exports. In the same way, the US remains to be an important destination for Chinese agricultural exports. The China-US strategic game not only caused a consequential distraction to the agricultural trade, but it also had direct negative impacts on the economies of the two countries. This article finds that agriculture is a key area of China-US trade relations and that the strategic competition between the two powers has direct implications for the agricultural sector. The findings of this research also revealed that the US-China trade war has hindered agriculture cooperation, and has implications for Ukraine and Pakistan as well.

Exposing Challenges in the Age of „Slowbalization” – A Review of the Book the Unequal Effects of Globalization by Pinelopi Goldberg & Greg Larson

Two major economic milestones of the last 20 years could be studied in the future, as the moments in which globalisation's unblemished path towards absolute global interconnection was cut short. The first one was the 2007-2008 global crisis, which marked the end of the generalised economic optimism that prevailed, mainly in the West, after the fall of the Berlin Wall. The second is the China-US trade war, which began in 2018 and was the most iconic demonstration of the emergence of political forces eager for a return to greater protectionism and greater strategic decision-making power of the states over deregulation, which seemed like an unquestioned economic dogma.

Identification of the Dynamic Trade Relationship between China and the United States Using the Quantile Grey Lotka–Volterra Model

The quantile regression technique is introduced into the Lotka–Volterra ecosystem analysis framework. The quantile grey Lotka–Volterra model is established to reveal the dynamic trade relationship between China and the United States. An optimisation model is constructed to solve optimum quantile parameters. The empirical results show that the quantile grey Lotka–Volterra model shows higher fitting accuracy and reveals the trade relationships at different quantiles based on quarterly data on China–US trade from 1999 to 2019. The long-term China–US trade relationship presents a prominent predator–prey relationship because exports from China to the US inhibited China’s imports from the United States. Moreover, we divide samples into five stages according to four key events, China’s accession to the WTO, the 2008 global financial crisis, the weak global economic recovery in 2015, and the 2018 China–US trade war, recognising various characteristics at different stages.

US-China trade war on ASEAN region: oligopoly or systemic market structure?

US-China trade war on ASEAN region: oligopoly or systemic market structure?

A Study of Global Trade War and Its Impact on Indian Economy

A Study of Global Trade War and Its Impact on Indian Economy

Bidirectional Risk Spillovers between Chinese and Asian Stock Markets: A Dynamic Copula-EVT-CoVaR Approach

This study aims to investigate bidirectional risk spillovers between the Chinese and other Asian stock markets. To achieve this, we construct a dynamic Copula-EVT-CoVaR model based on 11 Asian stock indexes from 1 January 2007 to 31 December 2021. The findings show that, firstly, synchronicity exists between the Chinese stock market and other Asian stock markets, creating conditions for risk contagion. Secondly, the Chinese stock market exhibits a strong risk spillover to other Asian stock markets with time-varying and heterogeneous characteristics. Additionally, the risk spillover displays an asymmetry, indicating that the intensity of risk spillover from other Asian stock markets to the Chinese is weaker than that from the Chinese to other Asian stock markets. Finally, the Chinese stock market generated significant extreme risk spillovers to other Asian stock markets during the 2007–2009 global financial crisis, the European debt crisis, the 2015–2016 Chinese stock market crash, and the China–US trade war. However, during the COVID-19 pandemic, the risk spillover intensity of the Chinese stock market was weaker, and it acted as the recipient of risk from other Asian stock markets. The originality of this study is reflected in proposing a novel dynamic copula-EVT-CoVaR model and incorporating multiple crises into an analytical framework to examine bidirectional risk spillover effects. These findings can help Asian countries (regions) adopt effective supervision to deal with cross-border risk spillovers and assist Asian stock market investors in optimizing portfolio strategies.

U.S. Economic Policy Towards China under the Biden Administration

Since the inception of the open-door policy in 1978, China has progressively become more integrated into the global economy through trade, foreign direct investment, and, more recently, outward direct investment. This economic integration has gained momentum with initiatives like the ‘Go Global’ strategy, China’s entry into the World Trade Organization (WTO) in 2001, and the launch of the Belt and Road Initiative in 2013. China’s economic ascent, coupled with its increasing political influence and military power, prompted the United States (US) to initiate a strategy of rebalancing in the Asia Pacific region, starting with the Bush administration and continuing through the Obama, Trump, and Biden administrations. During the Trump administration, this rebalancing strategy was supported by decoupling strategy, ultimately leading to a trade war with China. Despite its intention to avoid the initiation of a new Cold War and to adopt a more moderate stance towards China, the US-China trade war has evolved further into a tech war under the Biden administration. Given this context, this article aims to outline the primary characteristics of the US economic policy towards China during the Biden administration, comparing it to the Trump administration and assessing its impact on both nations. The central argument of this article is that the primary characteristics of the US economic policy towards China under Biden administration are rebalancing and decoupling, carried over from the policies of the preceding Trump administration, and there are clear signs that these characteristics are deepening. Furthermore, the article demonstrates that the extensive decoupling measures enacted by the US have proven effective in diminishing China’s role in global industrial and supply chains, particularly in industries related to semiconductors and chipmaking equipment.

Role of Economy in Foreign Policy: An Appraisal of US-China Trade War in the Prism of Political Economy

The intertwining of economics and foreign policy has become increasingly evident in the modern geopolitical landscape, with the US-China trade war as a prominent case study. This critical abstract examines the significance of economic considerations in shaping foreign policy decisions, particularly in the context of the US-China trade war, through the lens of political economy. The US-China trade war, initiated in 2018, symbolizes the complex interplay between economic interests and political objectives. At its core, the conflict represents a strategic maneuver by the United States to address longstanding grievances regarding trade imbalances, intellectual property theft, and market access restrictions. Conversely, China's response reflects its aspiration to assert itself as a global economic powerhouse and safeguard its developmental model against external pressures. Through a political economy perspective, this abstract delves into the multifaceted dynamics driving the US-China trade war. Economic theories, such as mercantilism and comparative advantage, offer insights into the motivations behind both nations' protectionist measures and tariff escalations. Moreover, the abstract evaluates the efficacy of economic coercion as a foreign policy tool and its implications for international relations. While tariffs and trade barriers can pressure adversaries, they also entail risks, such as retaliatory measures, economic volatility, and unintended consequences. Additionally, the abstract examines the role of domestic politics and interest groups in shaping the trajectory of the trade war, highlighting the interplay between economic nationalism, electoral dynamics, and policy formulation.

External coercion and public support: The case of the US–China trade war

Domestic support is crucial for state leaders facing international challenges. Previous studies suggest that in both democracies and autocracies, citizens tend to support their government in resisting external coercion, and state leaders would pay high political costs for backing down, especially after they have publicly committed to standing firm. But it is also frequently assumed that the public would grow weary of international conflict and turn to peaceful settlement. Empirical research on how and why this presumed shift in public opinion would take place remains relatively scarce. This article tackles this issue by examining the dynamics of Chinese public opinion during the US–China trade war in 2018. With a two-wave survey of Chinese citizens, I explore how the government’s strategy affected public approval through two causal mechanisms: the state’s reputation for resolve and economic impact. I find that respondents’ support for standing firm was strengthened by gains in reputation for resolve but attenuated by anticipated economic losses. I also find that respondents were more sensitive to the anticipated economic losses of a prolonged trade war over time and that respondents’ preferences were constantly conditional on their pre-existing anti-American sentiment. These findings illuminate the nuanced considerations of an authoritarian audience whose calculations extend beyond sheer nationalist beliefs and dynamically respond to changing circumstances.

Research on the Impact of the US China Trade War on the Economy of Other Regions of the World

In recent years, China's economy has developed rapidly, and the technology industry has made significant progress. The US launched a tariff-fueled trade war with China in 2018. The ongoing economic dispute, characterized by a series of tariffs, trade restrictions, and negotiations, not only affect themselves but also deeply on the rest of the world. This article is going to discuss how the trade dispute affects the global economy and the influences on each separate country. While some countries experienced benefits from the trade war, these advantages were often offset by broader economic uncertainties and disruptions caused by the trade tensions. The overall global economic impact of the trade war is negative and the benefits to certain countries are limited and temporary. Overall, the whole world's economy has benefited very little but has mostly been negatively affected by the trade tensions and trade war dynamics between the US and China.

Exploration of Profitability in Rotational Trading Strategy Based on Monte Carlo Simulation

Rotational trading strategy is an active trading strategy that adjusts positions to manage risk based on Value at Risk (VaR) in quantitative investment. Unpredictable and unusual Black Swan events make it difficult to predict and effectively mitigate the risks associated with such events. The importance of rational and efficient risk management has been highlighted by events such as the US-China trade war starting in 2018, the global spread of the COVID-19 pandemic from 2019 to 2022, stock market circuit breakers, and the oil crash in the Oil Fund. In this paper, we start from the perspective of VaR backtesting, count the occurrences of abnormal losses within a statistical interval, and establish a risk avoidance model for rotational trading to identify potential market risks and reallocate assets at suitable times. The aim of this paper is to explore whether this rotational trading strategy based on Monte Carlo simulation can effectively manage risks and achieve robust profitability in the US market under a volatile financial environment.

Downside risk connectedness between Islamic sectors and green bond markets: implications for hedging and investment strategies

ABSTRACT This study explores the relationship between the green bond and Islamic sectoral markets in terms of downside risk. A new framework was developed using CAViaR and QVAR techniques to construct hedging and portfolio strategies. Results show higher levels of downside risk connectedness and spillover across different risk environments, with short-run connectedness outperforming long-run. The downside risk connectedness and spillover are time-varying, influenced by major events like the Shale Oil Revolution, US–China trade war, COVID-19 pandemic, and Russo-Ukrainian conflict. Green bond market indices of China, the European Union, the US, and the global market receive net shocks in moderate and higher downside risk environments across various frequencies. US and global green bonds exhibit net transmitter roles in a downside-risk environment. Islamic Sectors BM, OG, FIN, CG, and HC are shock transmitters, while TELE and UTL are shock receivers across different downside risk environments and frequencies. Net roles are CS, INDUS, and TECH, subject to the downside risk environment and frequencies.

Spatial structure and network characteristics of the coupling coordination innovation ecosystems in the Guangdong–Hong Kong–Macao Greater Bay area

In recent times, a new wave of scientific and technological advancements has significantly reshaped the global economic structure. This shift has redefined the role of regional innovation, particularly in its contribution to developing the Guangdong–Hong Kong–Macao Greater Bay area (GBA) into a renowned center for science, technology, and innovation. This study constructs a comprehensive evaluation system for the Regional Innovation Ecosystem (RIE). By applying the coupling coordination degree model and social network analysis, we have extensively analyzed the spatial structure and network attributes of the coupled and coordinated innovation ecosystem in the GBA from 2010 to 2019. Our findings reveal several key developments: (1) There has been a noticeable rightward shift in the kernel density curve, indicating an ongoing optimization of the overall coupling coordination level. Notably, the center of gravity for coupling coordination has progressively moved southeast. This shift has led to a reduction in the elliptical area each year, while the trend surface consistently shows a convex orientation toward the center. The most significant development is observed along the ‘Guangdong–Shenzhen–Hong Kong–Macao Science and Technology Innovation Corridor’, where the level of coupling coordination has become increasingly pronounced. (2) The spatial linkages within the GBA have been strengthening. There are significant spatial transaction costs in the regional innovation ecological network. In the context of the 2019 US-China trade war, the cities of Jiangmen and Zhaoqing experienced a notable decrease in connectivity with other cities, raising concerns about their potential marginalization. (3) Guangzhou, Shenzhen, and Hong Kong have emerged as core nodes within the network. The network exhibits a distinctive “core–edge” spatial structure, characterized by both robustness and vulnerability in various aspects.