Comparative Analysis Of The Impacts Of Asian Financial Crisis And The U.S. Subprime Crisis On China's Export Trade

Since 1990 there have been three major financial crises:crisis broke out in Japan1990, the financial crisis started in Southeast Asia in 1997 and crisis started by subprime mortgage in the United States in 2007. Among these crises, the Southeast Asian financial crisis and the U. S. Subprime Mortgagee crisis have heavy impacts on China's economy, especially on China's export trade. Although there are obvious differences in their backgrounds, there are also many similar features in the aspect of conduction path and national policies between the first and last two crises. Based on the comprehensive comparison of the impact on China's export trade between the Southeast Asia Financial Crisis 1997 and U.S. Subprime Mortgage Crisis 2007, this article seeks to clarify the these two crises'influences on China's export trade in the aspects of degree, scope, structure and conduction path and so on in order to find out the differences and similarities between the two crises, illustrate deep problems of China's export trade, and seek what measures should be taken to promote the favorable and avoid the unfavorable in export under the background of the economic globalization and financial liberalization. Using comparison methods, studying the impact of financial crisis has important research value and realistic significance.On the basis of reviewing the financial crisis related theory and the impact of financial crisis on export trade mechanism, by the method of empirical study this article analyzes and compares the impacts of the two crises on China's total export value and export structure. By establish the influential index of financial crisis, the paper makes comparison between the two financial crises on China's economy, and mechanism of China's export trade by the way of VAR model. Furthermore, the paper makes a comparative analysis of export trade regions in China and puts forward strategies to cope with financial crisis by comparing the influence of two financial crises on China's export tradeThe basic thinking of the paper is as follow:(1) Make outline of the theory related to financial crisis and the impact financial crisis has on the export mechanism to provide the theoretical basis of the full text. (2) Makedescriptive analysis of the influence that U.S. Subprime Mortgage Crisis and the Southeast Asian Financial Crisis has on China's total export volume and export trade structure, and finding out similarities and differences of these two crises in the above aspects. (3) On one hand, from the level of empirical analysis, compare degree that the two financial crises'influence on the Chinese economy, on the other hand, comparethe two financial crises'influence on China's export trade mechanism. (4) Compare the impact of the two financial crises on exports from a regional perspective. Taking Hebei Province as example, make comparative analysis of the two financial crises'influence on places of export lower-dependent region, so that making comparative analysis of financial crisis's influence on the export trade in less developed regions.(5)Propose strategy based on the previous theoretical, empirical, quantitative and qualitative analysis. The main contents and views of the paper are as follows:1. Make outline of the theory related to financial crisis and the mechanism of export trade under the influence of financial crisis, and introduce the background and forms of Southeast Asian Financial Crisis and U.S. Subprime Mortgage Crisis respectively and the changes of the world economical trade pattern after two international financial crises.2. Make evaluative analysis of the influences on China's total exports value and the export trade structure caused by Southeast Asian Financial Crisis and U.S. Subprime Mortgage Crisis. Based on the monthly statistics between the two crises separately and by way of quantitative comparison methods, the two crises'influences on China's exports are researched from the standpoint of total export, trade partners, trade body, type of trading and export mix etc.Both of the two financial crises have affects on our exports, but at the degree of influence, the latter is bigger than the former. By a further analysis the paper finds that the influence caused by Southeast Asian Financial Crisis on the Chinese export is reflected on the Asian markets, mainly on the exports of state-owned enterprises, common trade form and the traditional labor-intensive products; while the U.S. Subprime Mortgage Crisis affected China in various fields, particularly in foreign-funded enterprises, material processing trade, and electromechanical and high-tech products.3. Compare the degree of the two financial crises influence in the point of empirical analysis. Southeast Asian Financial Crisis and U.S. Subprime Mortgage Crisis affect not only our export trade, but also our economic entities. By establishing financial crisis influence index which reflects the impact on the comprehensive changes of China's economy and comparing the index of these two crises, the paper finds U.S. Subprime Mortgage Crisis has deeper shocking degree than that of Southeast Asian Financial Crisis, but with stronger corresponding policy, more healthy financial system and relatively sounder social security system, the impact caused by U.S. Subprime Mortgage Crisis on China's real economy is less than that of Southeast Asian Financial Crisis.4. Make further comparison of the impact mechanism about the two financial crises on China's export trade by the way of empirical analysis. Starting from the four major conduction paths such as the export trade income, prices, exchange rates, and foreign investment, which influence export trade, selecting related indicators based on the theoretical analysis, the paper identifies the main factors by examining the impact of China's export trade and VAR model. Then in the quantitative point of view, the paper does more comparative analysis on the impacts of the two financial crises. During Southeast Asian Financial Crisis there is a long-run equilibrium relationship between China's export trade and major trading partners, export price index and the real effective exchange rate. Real income, export commodity prices, and real effective exchange rate in major trading partners produce great impacts on export trade, but the actual utilization of foreign capital's impact on export trade is not significant. During U.S. Subprime Mortgage Crisis, major trading partner countries'real income and real effective exchange rate affect export trade largely, export commodity prices and the actual utilization of foreign capital affect the export trade at a lower level. In the short term, during Southeast Asian Financial Crisis, China's export growth depends mainly on foreign direct investment, and export commodity prices and RMB real effective exchange rate also have a role on export growth. While export growth depends mainly on income and major trading partners export prices During U.S. Subprime Mortgage Crisis.5. Quantitative comparisons are done between the influences of two financial crises on China's exports from a regional perspective. Due to different levels of economic development and dependence on export, the ability to withstand financial crisis in eastern, central and western China is different. No matter before or after financial crisis, the dependence on export of the above three areas is in the following descending order:eastern areas, western areas and central areas. Export trade of eastern areas is greatly influenced by the two crises. Finally, the paper chooses Hebei Province which is in the coastal region but with Mainland economic characteristics as a research object, establishes corresponding econometrics models of financial crisis influence on the export in Hebei Province, in order to make comparative analysis of the two financial crises'influence on less developed regions.6. On the basis of the above empirical analysis, further analysis on the basic pattern that China's exports faced during the period of post-financial crisis is made. The impacts of two exceptional financial crises on China's export trade are enormous, and give us an important lesson and profound inspiration. Challenges posed by the future global financial crisis to Chinese economy, especially to the export trade will be greater. This paper makes strategic recommendations to address the financial crisis on the basis of the previous analysis.The paper adopts the method of combim g normative analysis with empirical analysis, integrating qualitative analysis with quantitative analysis. The main innovation of the thesis are:building a financial crisis index, comparing and analyzing the influence of the Southeast Asian Financial Crisis and the U.S. Subprime Mortgage Crisis on China's exports, setting up the VAR model, investigating deeply and thoroughly the similarities and differences of the influence of the two crises on China's exports in many aspects including background of the crisis, forms of expression, influence on export trade volume and trade structure, conduction path of impacts on export trade and China's export trade regions, and making up the current inadequate research in academe. Above all, by tracking and concluding major financial crises' impact on China, and making comparison between them, the paper puts forward strategies to fight against financial crisis.