IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/110040.html
   My bibliography  Save this paper

Differential Impacts of US-China Trade War and Outbreak of COVID-19 on Chinese Air Quality

Author

Listed:
  • Muhammad, Shahbaz
  • Avik, Sinha
  • Muhammad Ibrahim, Shah

Abstract

Purpose: Over the last couple of years, Chinese manufacturing sector was affected by the onset of US-China trade war and the outbreak of COVID-19. In such a scenario, air quality in China has encountered a shock, and the impacts of these two incidents are unknown. In this study, we analyze the convergence of air quality in China in presence of multiple structural breaks, and how the impacts of these two events are different from each other. Design/methodology/approach: In order to assess the nature of shocks in the presence of multiple structural breaks, Clemente-Montañés-Reyes (1998) with two structural breaks and Bai and Carrion-i-Silvestre (2009) with five structural breaks are employed. Findings: Our results reveal that air quality in China is showing the sign of convergence, and it is consistent across 18 provinces, which are worst hit by the outbreak of COVID-19. In presence of transitory shocks, the impact of COVID-19 outbreak is found to be higher, whereas the impact of US-China trade war is found to be more persistent. Lastly, outbreak of COVID-19 has been found to have more impact on pollutants with higher severity of health hazard. Originality: To the best of our knowledge, this is the first study that contributes to the empirical literatures in terms of investigating the convergence of overall air pollution and individual air pollutants taking COVID-19 and trade war into account.

Suggested Citation

  • Muhammad, Shahbaz & Avik, Sinha & Muhammad Ibrahim, Shah, 2021. "Differential Impacts of US-China Trade War and Outbreak of COVID-19 on Chinese Air Quality," MPRA Paper 110040, University Library of Munich, Germany, revised 2021.
    • Handle: RePEc:pra:mprapa:110040
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/110040/1/MPRA_paper_110040.pdf
    File Function: original version
    Download Restriction: no
    File URL: https://mpra.ub.uni-muenchen.de/119230/1/MPRA_paper_110040.pdf
    File Function: revised version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Matthew A. Cole & Robert J R Elliott & Bowen Liu, 2020. "The Impact of the Wuhan Covid-19 Lockdown on Air Pollution and Health: A Machine Learning and Augmented Synthetic Control Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(4), pages 553-580, August.
    2. Clemente, Jesus & Montanes, Antonio & Reyes, Marcelo, 1998. "Testing for a unit root in variables with a double change in the mean," Economics Letters, Elsevier, vol. 59(2), pages 175-182, May.
    3. Editorial, 2020. "Covid-19 and Climate Change," Journal, Review of Agrarian Studies, vol. 10(1), pages 5-6, January-J.
    4. Amani Elobeid & Miguel Carriquiry & Jerome Dumortier & David Swenson & Dermot J. Hayes, 2021. "China‐U.S. trade dispute and its impact on global agricultural markets, the U.S. economy, and greenhouse gas emissions," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(3), pages 647-672, September.
    5. Bekkers, Eddy & Schroeter, Sofia, 2020. "An economic analysis of the US-China trade conflict," WTO Staff Working Papers ERSD-2020-04, World Trade Organization (WTO), Economic Research and Statistics Division.
    6. Dieter Helm, 2020. "The Environmental Impacts of the Coronavirus," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(1), pages 21-38, May.
    7. Guojun He & Yuhang Pan & Takanao Tanaka, 2020. "The short-term impacts of COVID-19 lockdown on urban air pollution in China," Nature Sustainability, Nature, vol. 3(12), pages 1005-1011, December.
    8. Premier Grant Devine, 1987. "Fostering Trade in a Hostile International Environment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(5), pages 900-905.
    9. Jushan Bai & Josep Lluís Carrion-I-Silvestre, 2009. "Structural Changes, Common Stochastic Trends, and Unit Roots in Panel Data," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(2), pages 471-501.
    10. Copeland, Brian R., 2000. "Trade and environment: policy linkages," Environment and Development Economics, Cambridge University Press, vol. 5(4), pages 405-432, October.
    11. Sargan, John Denis & Bhargava, Alok, 1983. "Testing Residuals from Least Squares Regression for Being Generated by the Gaussian Random Walk," Econometrica, Econometric Society, vol. 51(1), pages 153-174, January.
    12. Corinne Le Quéré & Robert B. Jackson & Matthew W. Jones & Adam J. P. Smith & Sam Abernethy & Robbie M. Andrew & Anthony J. De-Gol & David R. Willis & Yuli Shan & Josep G. Canadell & Pierre Friedlingst, 2020. "Temporary reduction in daily global CO2 emissions during the COVID-19 forced confinement," Nature Climate Change, Nature, vol. 10(7), pages 647-653, July.
    13. Fuqiang Zhang & Xiaole Wu & Christopher S. Tang & Tianjun Feng & Yue Dai, 2020. "Evolution of Operations Management Research: from Managing Flows to Building Capabilities," Production and Operations Management, Production and Operations Management Society, vol. 29(10), pages 2219-2229, October.
    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. Samson Mukanjari & Thomas Sterner, 2020. "Charting a “Green Path” for Recovery from COVID-19," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(4), pages 825-853, August.
    2. Edward B. Barbier, 2020. "Greening the Post-pandemic Recovery in the G20," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(4), pages 685-703, August.
    3. Paul Lehmann & Silke Beck & Mariana Madruga de Brito & Erik Gawel & Matthias Groß & Annegret Haase & Robert Lepenies & Danny Otto & Johannes Schiller & Sebastian Strunz & Daniela Thrän, 2021. "Environmental Sustainability Post-COVID-19: Scrutinizing Popular Hypotheses from a Social Science Perspective," Sustainability, MDPI, vol. 13(16), pages 1-21, August.
    4. Andrea Baranzini & Stefano Carattini & Linda Tesauro, 2021. "Designing Effective and Acceptable Road Pricing Schemes: Evidence from the Geneva Congestion Charge," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 79(3), pages 417-482, July.
    5. David Klenert & Franziska Funke & Linus Mattauch & Brian O’Callaghan, 2020. "Five Lessons from COVID-19 for Advancing Climate Change Mitigation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(4), pages 751-778, August.
    6. Jennifer L. Castle & Jurgen A. Doornik & David F. Hendry, 2021. "Forecasting Facing Economic Shifts, Climate Change and Evolving Pandemics," Econometrics, MDPI, vol. 10(1), pages 1-21, December.
    7. Paul Malliet & Frédéric Reynès & Gissela Landa & Meriem Hamdi-Cherif & Aurélien Saussay, 2020. "Assessing Short-Term and Long-Term Economic and Environmental Effects of the COVID-19 Crisis in France," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(4), pages 867-883, August.
    8. Daniel T. L. Shek, 2021. "COVID-19 and Quality of Life: Twelve Reflections," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 16(1), pages 1-11, February.
    9. Julien Chevallier, 2020. "COVID-19 Outbreak and CO 2 Emissions: Macro-Financial Linkages," JRFM, MDPI, vol. 14(1), pages 1-18, December.
    10. Giorgio Canarella & Rangan Gupta & Stephen M. Miller & Stephen K. Pollard, 2019. "Unemployment rate hysteresis and the great recession: exploring the metropolitan evidence," Empirical Economics, Springer, vol. 56(1), pages 61-79, January.
    11. L. Vanessa Smith & Nori Tarui & Takashi Yamagata, 2020. "Global fossil fuel consumption and carbon pricing: Forecasting and counterfactual analysis under alternative GDP scenarios," RIEEM Discussion Paper Series 2004, Research Institute for Environmental Economics and Management, Waseda University.
    12. Max Luke & Priyanshi Somani & Turner Cotterman & Dhruv Suri & Stephen J. Lee, 2020. "No COVID-19 Climate Silver Lining in the US Power Sector," Papers 2008.06660, arXiv.org, revised May 2021.
    13. Ahmad, Manzoor & Zheng, Jianghuai, 2021. "Do innovation in environmental-related technologies cyclically and asymmetrically affect environmental sustainability in BRICS nations?," Technology in Society, Elsevier, vol. 67(C).
    14. Mariam Camarero & Alejandro Muñoz & Cecilio Tamarit, 2022. "The rise and fall of global financial flows in EU 15: new evidence using dynamic panels with common correlated effects," Working Papers 2212, Department of Applied Economics II, Universidad de Valencia.
    15. Mariana Madruga de Brito & Danny Otto & Christian Kuhlicke, 2021. "Tracking Topics and Frames Regarding Sustainability Transformations during the Onset of the COVID-19 Crisis," Sustainability, MDPI, vol. 13(19), pages 1-19, October.
    16. Paniagua, Jordi & Sapena, Juan & Tamarit, Cecilio, 2017. "Sovereign debt spreads in EMU: The time-varying role of fundamentals and market distrust," Journal of Financial Stability, Elsevier, vol. 33(C), pages 187-206.
    17. Xin Xu & Shupei Huang & Feng An & Ze Wang, 2022. "Changes in Air Quality during the Period of COVID-19 in China," IJERPH, MDPI, vol. 19(23), pages 1-17, December.
    18. Fatin Samara & Bassam A. Abu-Nabah & Waleed El-Damaty & Mayyada Al Bardan, 2022. "Assessment of the Impact of the Human Coronavirus (COVID-19) Lockdown on the Energy Sector: A Case Study of Sharjah, UAE," Energies, MDPI, vol. 15(4), pages 1-19, February.
    19. O'Garra, Tanya & Fouquet, Roger, 2022. "Willingness to reduce travel consumption to support a low-carbon transition beyond COVID-19," Ecological Economics, Elsevier, vol. 193(C).
    20. Alejandro Lopez Feldman & Carlos Chavez, Maria Velez, Hernan Bejarano, Ariaster Chimeli, Jose Feres, Juan Robalino, 2020. "Environmental impacts and policy responses to Covid-19: A view from Latin America," Working Papers, Department of Economics 2020_11, University of São Paulo (FEA-USP), revised 14 Jul 2020.

    More about this item

    Keywords

    China; Trade War; COVID-19; AQI; Convergence;
    All these keywords.

    JEL classification:

    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:pra:mprapa:110040. 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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    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.