Study On Influence Channels Of Financial Crisis On China’s Export

The crisis originated in the United States subprime mortgage market has spread to other countries quickly. It not only swept the European Union, Japan and other developed countries, but also spread to developing countries, including China, and finally evolved into a global financial crisis. The current financial crisis was considered the worst financial shock since the great depression of the1930s by many commentators and policymakers. One of the most striking features of the financial crisis of2008was the collapse in international trade, and the decline in world exports was much greater than the decline in world GDP. Being closely integrated into the global economy, China’s export was badly hit during this recession.So far, theoretical study on the impact of financial crisis on international trade has not formed a system. Most study is descriptive analysis based on the statistical data related to the impact of financial crisis on China’s export, or the simplified analysis of measurement, which is still lack of detailed empirical test. In this background, this dissertation studies the influence of2008financial crisis on China’s export. It focuses on examining the influence channels of this downturn on China’s export. The topic not only has theoretical value but also has practical significance. In particular, it is important for formulating the optimal policy response and how to avoid trade decline again what might happen in the future.This dissertation uses methods combining theoretical analysis and empirical analysis, qualitative analysis and quantitative analysis. Based on presenting some broad facts of China’s exports during the2008-2009collapse, it analyses the influence channels of2008financial crisis on export and examing those channels using export data of China. The main content of research and conlusion include the following four parts.First, this dissertation analyses three key influence channels according to demand-side and supply-side mechanisms for export:decline in external demand; difficulties in obtaining trade finance; rising trade protectionism. Analysis shows that the decline in external demand can explain part of the decline in exports, and protection is spreading since the financial crisis, hindered the international trade. In addition, trade finance has been impacted by the financial crisis, and thus has negative influences on trade. On this basis, we test in detail the influence of different channels respectively.Second, test for external demand channel by using new import intensity-adjusted measure of aggregate demand computed from OECD Input-Output tables and panel data model implies that:decline in external demand had significantly negative effects on China’s export during the financial crisis; the demand of developed sample countries distorted China’s export to a greater extent than developing sample countries; external demand collapse had seriously negative effects on China’s export during its valley floor period.Third, test for trade protectionism channel by using constructed dynamic first-differenced gravity equation implies that:China has been hit by protectionist measures since the financial crisis; the trade protectionism of developed countries distorted China’s export to a greater extent than developing countries; tariff, public procurement and other non-tariff barriers are the main forms of restricting China’s export, and Bail out/state aid measure and export subsidy have outstandingly indirect impact on China’s export; protectionist measures in machinery, metals, minerals and processed food have the largest negative impact on China’s export.Fourth, test for trade finance channel by using panel data model implies that:credit constraints restrict China’s export; although estimates provide no evidence on financial crisis amplified the effect of credit constraints on China’s export, exports in industries characterized by more trade credit and higher degree of assets tangibility appear to be more sensitive to a financial crisis than other industries.Finally, based on above analysis and empirical research, this dissertation proposes several suggestions and directions for future research.