Empirical Analysis On Co-movement Between Chinese And American Stock Markets Under Trade Friction

After 40 years of reform and opening up,China has developed into the world’s second largest economy after the United States.At present,economic development has entered a new normal,and it is in a critical period of industrial transformation,structural upgrading,and the conversion of old and new moving energy.The United States regards China as the biggest "imaginary enemy"and curbs China’s industrial upgrading and economic growth by creating trade conflicts.These changes in China’s policy are directly projected into the stock markets of China and the United States.Therefore,studying the linkage changes in the stock market between the two countries in the context of trade friction,on the one hand,can truly reflect the economic and trade relations between China and the United States,and help China to establish Awareness of consciousness and prevention of financial risks;on the other hand,it helps to timely understand the changes in supply and demand and structural status of different economic sectors and sectors in China,so as to make corresponding reforms and adjustments.Therefore,using empirical methods to analyze the linkage changes of China-US stock market under the background of trade friction has certain theoretical and practical significance.Based on the perspective of China-US trade friction,this paper selects the daily return rate of the Shanghai Stock Exchange from January 2014 to March 2019 and the daily yield of the Dow Jones Industrial Index as the research object.Firstly,the DCC-GARCH parameter model is used to analyze the fluctuation trend and linkage effect of the daily return rate of the stock market in the two countries.At the same time,the time series dynamic correlation coefficient map of the daily certificate and the Dow Jones Industrial Index daily yield are interpreted.It can be concluded that during the period of intensification of trade friction between China and the United States,the daily rate of return of the Shanghai Composite Index and the daily yield of the Dow Jones Industrial Average has risen to a new high,and the stock market in the two countries continues to maintain this inertia trend.Secondly,by using data visualization techniques,this paper analyzed the time-varying situation between the macroeconomic indicators such as the difference in economic growth rate,inflation difference,exchange rate fluctuation and trade links between China and the United States and the overall trend of the two stock markets.It is found that the degree of trade links between China and the United States is strongly positively correlated with the stock market linkage.When the economic growth rate of the two countries changes greatly,the stock market tends to be independent and the linkage effect will be reduced.The difference in inflation rate has a negative impact on the stock market linkage.Finally,it puts forward a strategy of pursuing mutual benefit and win-win results,properly handling China-US relations;continuing to promote reform and innovation,maintaining the stable operation of domestic economic and financial development;accelerating the proposal of "One Belt,One Road" construction,and contributing to China’s strategic vision of achieving the community of human destiny Program and Chinese wisdom.