• ISSN: 2301-3567
    • Frequency: Quarterly (2013-2014); Monthly (Since 2015)
    • DOI: 10.18178/JOEBM
    • Editor-in-Chief: Prof. Eunjin Hwang
    • Executive Editor: Ms. Chloe Wu
    • Abstracting/ Indexing: Engineering & Technology Library,  Electronic Journals Library, Ulrich's Periodicals Directory, MESLibrary, Google Scholar, Crossref, and ProQuest.
    • E-mail: joebm@ejournal.net
JOEBM 2016 Vol.4(10): 546-552 ISSN: 2301-3567
DOI: 10.18178/joebm.2016.4.10.450

The China Puzzle: Theory and Evidence on the Behavior of Chinese Exports during the 2008-2009 Global Financial Crisis

Hang-Wei Hao
Abstract— Many studies link the recent collapse in trade during the 2008-09 financial crisis to a decrease in the demand for durable and investment goods in crisis-hit countries. Thus, a remarkable feature of the recent collapse in international trade is that China’s export sectors – for which the crisis-hit U.S. and Europe are the primary destinations – appear much less affected than their counterparts in other exporting countries. This paper explains the puzzle by documenting a new stylized fact: China’s processing exports fell much less than ordinary trade during the 2008-09 financial crisis, even conditioning on industry and demand in the destination country. It then investigates a range of explanations for the special behavior of processing trade.

Index Terms— Trade collapse, processing trade, durables.

Hang-Wei Hao is with the Department of Economic at Valparaiso University, 1400 Chapel Drive, Valparaiso, IN 46383, USA (e-mail: henry.hao@valpo.edu).

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Cite: Hang-Wei Hao, " The China Puzzle: Theory and Evidence on the Behavior of Chinese Exports during the 2008-2009 Global Financial Crisis," Journal of Economics, Business and Management vol. 4, no. 10, pp. 546-552, 2016.

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