Business cycle co-movements and transmission channels: evidence from China
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AbstractThis article examines the impacts of international trade, foreign direct investment (FDI) and industrial structure on international business cycle co-movements between China and its major trading partners. We investigate the principal transmission factors of business cycle co-movements and their contributions to China’s economic growth in the context of economic globalization. Through studying the 27 major trading partners during 1990–2015, we find that, from China’s perspective, the synchronization tendency was continuously growing before the 2008 financial crisis but slowed down or even reversed after the crisis. Bilateral trade intensity and FDI intensity contributed more to cyclical co-movement behaviors between China and its emerging market partners, but less to economic synchronization between China and its advanced economic partners. Industrial structure similarity, on the contrary, could explain the co-movement behaviors between China and its advanced economic partners, but not emerging market partners. China’s past economic growth was also significantly correlated with the economic performance of its non-Asian trading partners, but not Asian neighbors.
Acceptance Date13/08/2019
All Author(s) ListHuifang Cheng, Lijun Cen, Yu Wang, Hongyi Li
Journal nameJournal of the Asia Pacific Economy
Year2019
ISSN1354-7860
LanguagesEnglish-United States
KeywordsBusiness cycle
comovements; Chinese
economy; foreign direct
investment (FDI); industrial
structure; international
trade

Last updated on 2021-26-09 at 01:03