IDEAS home Printed from https://ideas.repec.org/a/spr/snbeco/v4y2024i8d10.1007_s43546-024-00687-6.html
   My bibliography  Save this article

Quantification of the short-term impact of economic shock events on the gross domestic product of 31 provinces in China from 2005 to 2022

Author

Listed:
  • Danjun Wang

    (Shanghai University of Finance and Economics)

  • Zhanyang Zhang

    (Hohhot Power Supply Branch Technology City Park Power Supply Company)

  • Fengwei Wang

    (Tongji University)

  • Xiaomeng Qiu

    (Gandong College)

Abstract

With the deepening of economic globalization, the economic connections among countries around the world are becoming increasingly close. However, there have been challenges, including some random economic events in certain years, particularly in 2020 due to the COVID-19 pandemic, and the short impacts of these events on economic growth in China have not been quantitatively evaluated. Therefore, the quarterly China total gross domestic product (GDP) and province-level data from 2005 to 2022 are used for exploratory analyzing the short-term impact of the random factors via the singular spectrum analysis (SSA) approach. The key point of this study is that the short-term effects of unforeseen events or national economic policies may be reflected in the residual series obtained by removing the long-term trend as well as the annual and semi-annual signals from the overall GDP data. Six unexpected economic shocks, namely, the “2008 American loan crisis”, the “four trillion yuan investment plan”, “supply-side structural reforms”, the “plan to promote foreign trade growth plan”, the “2020 COVID-19 pandemic” and the “Russia-Ukraine conflict/COVID-19 pandemic”, were strongly evaluated during the period from 2005 to 2022. The results show that the short-term China GDP loss from the 2008 American loan crisis event was 1.99 trillion￥GDP, where 1.22 trillion￥was from secondary industry. The “four trillion yuan investment plan” and “plan to promote foreign trade growth” led to an additional GDP increases of 1.65 and 1.74 trillion￥, respectively. In the past two years, the COVID-19 and Russia-Ukraine conflict caused a GDP reduction of -6.49 trillion￥. The province-level data analysis results show that eastern regions, such as Beijing, Shanghai and Guangdong, which have relatively high dependence ratios of foreign trade, are more easily affected by international external influencing factors. In addition, the predicted GDP indicates that China’s GDP is projected to reach 160 trillion￥ in 2025 without considering future potential unforeseen events.

Suggested Citation

  • Danjun Wang & Zhanyang Zhang & Fengwei Wang & Xiaomeng Qiu, 2024. "Quantification of the short-term impact of economic shock events on the gross domestic product of 31 provinces in China from 2005 to 2022," SN Business & Economics, Springer, vol. 4(8), pages 1-22, August.
    • Handle: RePEc:spr:snbeco:v:4:y:2024:i:8:d:10.1007_s43546-024-00687-6
    DOI: 10.1007/s43546-024-00687-6
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s43546-024-00687-6
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s43546-024-00687-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Holz, Carsten A., 2008. "China's Economic Growth 1978-2025: What We Know Today About China's Economic Growth Tomorrow," World Development, Elsevier, vol. 36(10), pages 1665-1691, October.
    2. Ramey, V.A., 2016. "Macroeconomic Shocks and Their Propagation," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 71-162, Elsevier.
    3. Balke, Nathan S & Fomby, Thomas B, 1994. "Large Shocks, Small Shocks, and Economic Fluctuations: Outliers in Macroeconomic Time Series," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 9(2), pages 181-200, April-Jun.
    4. Wang, Hao & Xu, Ning & Yin, Haiyan & Ji, Hao, 2022. "The dynamic impact of monetary policy on financial stability in China after crises," Pacific-Basin Finance Journal, Elsevier, vol. 75(C).
    5. Zhiwei Liu & Yonglei Fang & Lei Ma, 2022. "A Study on the Impact of Population Age Structure Change on Economic Growth in China," Sustainability, MDPI, vol. 14(7), pages 1-15, March.
    6. Yongqing Wang, 2023. "Long-run Effects of Monetary Policy of China on Its Economic Growth," Chinese Economy, Taylor & Francis Journals, vol. 56(6), pages 431-440, November.
    7. Hu, Yingyao & Yao, Jiaxiong, 2022. "Illuminating economic growth," Journal of Econometrics, Elsevier, vol. 228(2), pages 359-378.
    8. Jena, Pradyot Ranjan & Majhi, Ritanjali & Kalli, Rajesh & Managi, Shunsuke & Majhi, Babita, 2021. "Impact of COVID-19 on GDP of major economies: Application of the artificial neural network forecaster," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 324-339.
    9. Bing Wang & Tianchi Chen, 2022. "Social Progress beyond GDP: A Principal Component Analysis (PCA) of GDP and Twelve Alternative Indicators," Sustainability, MDPI, vol. 14(11), pages 1-18, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Metiu, Norbert, 2021. "Anticipation effects of protectionist U.S. trade policies," Journal of International Economics, Elsevier, vol. 133(C).
    2. Aikman, David & Bush, Oliver & Davis, Alan, 2016. "Monetary versus macroprudential policies causal impacts of interest rates and credit controls in the era of the UK Radcliffe Report," Bank of England working papers 610, Bank of England.
    3. Cristiano Cantore & Filippo Ferroni & Miguel León-Ledesma, 2021. "The Missing Link: Monetary Policy and The Labor Share," Journal of the European Economic Association, European Economic Association, vol. 19(3), pages 1592-1620.
    4. Orietta Nicolis & Jean Paul Maidana & Fabian Contreras & Danilo Leal, 2024. "Analyzing the Impact of COVID-19 on Economic Sustainability: A Clustering Approach," Sustainability, MDPI, vol. 16(4), pages 1-30, February.
    5. Christoph Kaufmann, 2023. "Investment Funds, Monetary Policy, and the Global Financial Cycle," Journal of the European Economic Association, European Economic Association, vol. 21(2), pages 593-636.
    6. James Cloyne & Òscar Jordà & Alan M. Taylor, 2020. "Decomposing the Fiscal Multiplier," Working Paper Series 2020-12, Federal Reserve Bank of San Francisco.
    7. Valerie A. Ramey, 2019. "Ten Years after the Financial Crisis: What Have We Learned from the Renaissance in Fiscal Research?," Journal of Economic Perspectives, American Economic Association, vol. 33(2), pages 89-114, Spring.
    8. Kaivo-oja, J. & Luukkanen, J. & Panula-Ontto, J. & Vehmas, J. & Chen, Y. & Mikkonen, S. & Auffermann, B., 2014. "Are structural change and modernisation leading to convergence in the CO2 economy? Decomposition analysis of China, EU and USA," Energy, Elsevier, vol. 72(C), pages 115-125.
    9. Man Li & Tao Ye & Peijun Shi & Jian Fang, 2015. "Impacts of the global economic crisis and Tohoku earthquake on Sino–Japan trade: a comparative perspective," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 75(1), pages 541-556, January.
    10. Dedola, Luca & Rivolta, Giulia & Stracca, Livio, 2017. "If the Fed sneezes, who catches a cold?," Journal of International Economics, Elsevier, vol. 108(S1), pages 23-41.
    11. Magud, Nicolas E. & Pienknagura, Samuel, 2024. "The return of expansionary austerity: Firms' investment response to fiscal adjustments in emerging markets," Journal of International Money and Finance, Elsevier, vol. 143(C).
    12. Tobias Adrian & Federico Grinberg & Nellie Liang & Sheheryar Malik & Jie Yu, 2022. "The Term Structure of Growth-at-Risk," American Economic Journal: Macroeconomics, American Economic Association, vol. 14(3), pages 283-323, July.
    13. Fu, Qi & So, Jacky Yuk-Chow & Li, Xiaotong, 2024. "Stable paretian distribution, return generating processes and habit formation—The implication for equity premium puzzle," The North American Journal of Economics and Finance, Elsevier, vol. 70(C).
    14. Kuhn, Moritz & Bartscher, Alina & Schularick, Moritz & Wachtel, Paul, 2021. "Monetary policy and racial inequality," CEPR Discussion Papers 15734, C.E.P.R. Discussion Papers.
    15. John Cochrane, 2022. "The fiscal root of inflation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 45, pages 22-40, July.
    16. Tino Berger & Tore Dubbert, 2022. "Government spending effects on the business cycle in times of crisis," CQE Working Papers 10022, Center for Quantitative Economics (CQE), University of Muenster.
    17. Zarnigor Dzhuraeva & James Okrah & Gulbahor N. Naziri, 2023. "The effect of COVID-19 restrictions (lockdown) on GDP growth in CIS countries," R-Economy, Ural Federal University, Graduate School of Economics and Management, vol. 9(4), pages 422-436.
    18. Chen Lian & Yueran Ma & Carmen Wang, 2019. "Low Interest Rates and Risk-Taking: Evidence from Individual Investment Decisions," The Review of Financial Studies, Society for Financial Studies, vol. 32(6), pages 2107-2148.
    19. Rangaraju, Sandeep Kumar & Herrera, Ana María, 2021. "Tax news in good and bad times," Economics Letters, Elsevier, vol. 207(C).
    20. Franziska Piontek & Matthias Kalkuhl & Elmar Kriegler & Anselm Schultes & Marian Leimbach & Ottmar Edenhofer & Nico Bauer, 2019. "Economic Growth Effects of Alternative Climate Change Impact Channels in Economic Modeling," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(4), pages 1357-1385, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:snbeco:v:4:y:2024:i:8:d:10.1007_s43546-024-00687-6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.