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US economic policy uncertainty on Chinese economy: industry level analysis

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  • Naijing Huang
  • Naixin Huang
  • Yicheng Wang

Abstract

This paper uses both Chinese aggregate and dis-aggregate level data to investigate the transmission mechanisms of spillover effects of US economic policy uncertainty on the Chinese macroeconomy activities. We find that different industries of China respond quite differently by using quasi-exogenous variation across industries. More specifically, increasing uncertainty reduces the Chinese stock market return, especially those industries closely connected to the US investors. FDI in China is positively associated with increased US policy uncertainties, and industries intensively depending on foreign investment would be affected more. Lastly, the export from China to US would decrease, and industries whose exports heavily relying on the US market would drop more in response to increases in the US policy uncertainties.

Suggested Citation

  • Naijing Huang & Naixin Huang & Yicheng Wang, 2020. "US economic policy uncertainty on Chinese economy: industry level analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 27(10), pages 789-802, June.
    • Handle: RePEc:taf:apeclt:v:27:y:2020:i:10:p:789-802
    DOI: 10.1080/13504851.2019.1645942
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    Cited by:

    1. Balcilar, Mehmet & Ozdemir, Zeynel Abidin & Ozdemir, Huseyin & Wohar, Mark E., 2020. "Transmission of US and EU Economic Policy Uncertainty Shock to Asian Economies in Bad and Good Times," IZA Discussion Papers 13274, Institute of Labor Economics (IZA).
    2. Albert Agbeko Ahiadu & Rotimi Boluwatife Abidoye & Tak Wing Yiu, 2024. "Economic Policy Uncertainty and Commercial Property Performance: An In-Depth Analysis of Rents and Capital Values," IJFS, MDPI, vol. 12(3), pages 1-19, July.
    3. Hui Zhang & Yuyao Qian & Liying Yu & Zheng Wang, 2020. "Integrated Development of Information Technology and the Real Economy in China Based on Provincial Panel Data," Sustainability, MDPI, vol. 12(17), pages 1-17, August.

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