Research On The Impact Of Trade Policy Uncertainty On China’s Economy

In the process of rapid growth and high-quality development of Chinese economy,foreign trade has always been very important.However,Chinese foreign trade development also needs to face various trade policy uncertainties and risk shocks.The trade policy uncertainty is characterized by temporary changes or unexpected or unpredictable policy changes and usually manifested as negative impacts on the macroeconomic variables.It is very significant to further research the impact of trade policy uncertainty on Chinese economy.This thesis firstly describes the transmission channels of trade policy uncertainty from the perspectives of macroeconomic effect,trade term effect,and “double circulation” effect.The economic impact is derived through the theoretical model based on exchange rate fluctuations,business risk,entering and exiting foreign market,and export duality marginal.The description of the transmission channels of trade policy uncertainty and theoretical derivation provide channels and theoretical support for empirical analysis and simulation test in this thesis.Second,this thesis qualitatively describes the trend and fluctuation characteristics,then analyzes dynamic impact through SV-TVP-FAVAR model,with a focus on characterizing the pulse response characteristics of major economic variables at different stages.On the basis of characterizing the import and export transmission channels,this thesis tests the import and export effects of Chinese and American trade policy uncertainty from the triple perspectives of time distribution,stage deviation,and country impact differences,and uses the endogenous TVP-VAR model to test the dynamic impact on the different ownership enterprises’ import and export trade.Furthermore,this thesis uses the TVP-VAR-DY model to analyze the dynamic spillover effect on the “dual cycle”characterization variables.Finally,this thesis uses the DSGE model to simulate the impact on Chinese economy from the perspective of trade protectionism.Through characterization of transmission channels,theoretical derivation,empirical analysis,and simulation testing,this thesis draws some research conclusions with academic and policy reference value.Firstly,through the channel description and mechanism analysis of trade policy uncertainty,the trade policy uncertainty exists the clear transmission channels,such as macroeconomic channels,import and export trade channels,terms of trade channels and “double circulation”characteristic variables channels.At the same time,this thesis provide theoretical support for empirical analysis through the theoretical model based on the perspectives of the exchange rate fluctuations,business risk,entering and exiting foreign market,and the export dual margin.Since Chinese accession to the WTO,the trend of Chinese trade policy uncertainty is in line with the phased trade market environment.The trade policy uncertainty is characterized by negative macroeconomic shocks,and there are differences in the response states of different policy objectives.During the increasing period of trade policy uncertainty,the negative impact of trade policy uncertainty is significant,and trade policy uncertainty exhibits the expanding effect characteristic.The trade policy uncertainty has multiple channels for enterprise import and export transmission,with obvious cross-border crossing transmission characteristics.It has both the long-term “consistent” trend in the early stage of the sample and the short-term “deviation” trend in the later stage of the sample between Chinese and American trade policy uncertainty.Chinese and American trade policy uncertainty present the negative impact characteristic of heterogeneity in enterprise import and export,and the negative spillover effects of Chinese and American trade policy uncertainty are different in different periods.In addition,in the different deviation stages of Chinese and American trade policy uncertainty,the enterprise import and export effects of trade policy uncertainty are different,which are stronger in the expansion deviation period than in the stable period.The trade policy uncertainty has always been the main influencing factor for enterprises’ import and export.Secondly,the enterprises’ import and export trade of different ownership types show the significant upward trend,and there are phenomenon of reverse changes between trade policy uncertainty and import and export trade.Further econometric testing found that under the multiple evaluation indicator system,the import and export trade show negative response characteristics.The response characteristics of enterprises’ import and export trade of different ownership types are different,with foreign enterprises performing significantly,while state-owned enterprises responding relatively weakly.Under the evaluation indicators of pulse response such as long-term and short-term effects,there is no significant difference in the pulse response effect of enterprises’ import and export trade among different ownership types,which is in line with the fact that “trade policy uncertainties exhibit most negative impact attributes” and “there is the phenomenon of the reverse correlation between trade policy uncertainty and enterprise import and export trade”.Thirdly,trade policy uncertainty has the deteriorating effect on the trade terms.From the appearance of the trade policy uncertainty and the trade terms,there may be the negative correlation between them.Further econometric analysis reveals that trade policy uncertainty has the deteriorating effect on the trade terms.Under different levels of fluctuations,the deteriorating effect of trade policy uncertainty on the trade terms exhibits differentiated characteristics,while the effect of trade policy uncertainty on the trade terms decreases in the later stages of the sample.The deterioration effect of trade terms due to the trade policy uncertainty in the early stage of the sample is stronger than that in the later stage of the sample,which cannot indicate that there is no“deviation” trend in the early stage of the sample or the “synchronous” trend in the later stage of the sample between the trade policy uncertainty and trade terms.Fourthly,“double circulation” is an important practical exploration and development of the economic cycle theory,and the internal and external circulation markets have a variety of transmission variables.In the most sample interval,the trend and fluctuation characteristics of the internal and external circulation markets have both the “synergy” consistency attribute in long-term cycles,as well as stage heterogeneity and time point distribution differences.There is the practical foundation for positive linkage between the internal and external circulation markets.In recent years,the directional spillover effect of the internal circulation market has increased,while the directional spillover effect of the external circulation market is relatively stable.However,there are small fluctuations in the directional spillover effect of the external circulation market.In the sample interval,there is the certain difference in the directional spillover effect between the internal circulation market and the external circulation market.The “dual circulation”characteristic variables will have the positive “superposition” effect,and there is the superposition effect between the internal circulation market and the external circulation market.Fifthly,with the simulation analysis of the DSGE model,the trade protectionism policies cause the trade policy uncertainty.Trade policy uncertainty characterized by trade protectionism will have the negative impact on major macroeconomic variables,such as economic growth,consumption,investment,and imports and exports,and have the inflationary effect.Although trade protection policies,such as import and export subsidies,can achieve the goal of “rewarding exports and restricting imports”,and improve the competitiveness of domestic goods in terms of prices,the trade protectionism will inevitably increase the trade policy uncertainty,leading to economic growth pressure and inflation risks.Based on the multi-objective perspective,it analyzes the impact on Chinese macroeconomic variables,which is of great practical significance for all sectors to fully understand the negative impact of trade policy uncertainty.The government should have the correct understanding of the negative interference attribute of trade policy uncertainty on economic variables,and combine it with the phased goals of Chinese economic development.It should rationally view the differentiated response characteristics of policy objectives under the impact of trade policy uncertainty,and timely adopt reasonable “counter cyclical” and “cross cyclical” policies,in order to achieve moderate growth and high-quality development of the Chinese economy.