The Impact Of Economic Policy Uncertainty On China's Import

Economic policy is a means of national economic regulation.For some purpose,the government will make or adjust economic policies to affect firm's behavior and thus affect the whole macro-economy.When the relations among countries are becoming increasingly close,the government may pay more attention to the foreign trade,and the policy of import and export trade will change more frequently,and the economic fluctuations caused by policy changes will be transmitted to trading partners through various channels.Then a rise in uncertainty in one region can create a "butterfly effect" which will affect other countries' economy and trade,such as the financial crisis in 2008 and the European debt crisis in2012,when importers and exporters face such a series of turbulent situations,they will form a anticipation that the economic policy uncertainty will rise,so they will take a wait-and-see attitude,this will seriously affect the domestic enterprises to expand production,update technology industrial structure,import and export trade will be restrained then.As micro-subject of international trade and investment,enterprises pay more attention to the trend of international economic situation.Enterprises who entering into new markets or exporting new products or making new investments will take full account of the uncertainty of economic policies in the market of destination countries,the external market uncertainty rises,import from external market will face higher costs and prices than usual,the enterprises will buy substitute from domestic firms production or exit import,The decline in the number of enterprises directly leads to a decrease in imports and extensive margin.As the exit of the marginal enterprises making a lower competitive intensity in foreign markets,it indirectly leads to export growth of the existing enterprises,namely intensive margin growth.How do Chinese enterprises cope with these risks,optimize domestic structure of imported products and keep healthy development of foreign trade under the background of uncertain future economic situation is a question worthy of discussion.In view of this,this paper uses the hs6-digit product data of CEPII BACI from 2000 to 2014,and the economic policy uncertainty index to measure the impact of the economic policy uncertainty of the original country on the binary marginal of China's imports.The empirical results show that the economic policy uncertainty of original country can significantly inhibit the growth of China's import extensive margin,but significantly promote the growth of intensive margin,the inhibiting effect on extensive margin is greater than the promoting effect on theintensive margin.The economic policy uncertainty of the original country has an impact on the intensive margin through import variable cost,and has an impact on the extensive margin through fixed cost and variable cost.From the perspective of product categories,the increase of economic policy uncertainty in original countries will restrain the extensive margin and intensive margin of capital goods and intermediate goods,promote the intensive margin of capital goods and intermediate goods,and increase the extensive margin and intensive margin of consumer goods.The effect of economic policy uncertainty on the intensive margin of differentiated products and non-differentiated products is positive,on the extensive margin is negative.Compared with non-differentiated products,differentiated products are less affected by economic policy uncertainty.From the perspective of the country market attribute,when the economic policy uncertainty of developed countries rises,the binary import margin will increase.On the contrary,when the economic policy uncertainty of developing countries rises,the extensive of the binary import margin will be significantly restrained.