TY - JOUR
T1 - For better or worse, in sickness and in health
T2 - Australia-China political relations and trade
AU - Golley, Jane
AU - Agarwal, Vishesh
AU - Laurenceson, James
AU - Qiu, Tunye
N1 - Publisher Copyright:
© 2022 Informa UK Limited, trading as Taylor & Francis Group.
PY - 2022
Y1 - 2022
N2 - This paper quantifies the effects of shocks in bilateral political relations on Australia’s merchandise goods exports to China between 2001 and 2020. Using a vector autoregression framework, our estimates suggest that short-term fluctuations in political relations have no long-run effects on Australia’s aggregate export growth to China over this period, nor in any of three sub-periods analysed. A disaggregated analysis of 19 HS2 sectors reveals heterogenous short-run effects across sectors and time periods, with numerous sectors indicating the seemingly perverse finding that an increase in political cooperation/conflict is associated with a decrease/increase in export growth, with a lag of one to four months. We propose two hypotheses that are consistent with these findings, ‘doubling down’ and ‘dropping the ball’, contributing new understanding to the political relations-trade nexus in the context of a bilateral relationship that will likely be characterised by both cooperation and conflict in the decades ahead.
AB - This paper quantifies the effects of shocks in bilateral political relations on Australia’s merchandise goods exports to China between 2001 and 2020. Using a vector autoregression framework, our estimates suggest that short-term fluctuations in political relations have no long-run effects on Australia’s aggregate export growth to China over this period, nor in any of three sub-periods analysed. A disaggregated analysis of 19 HS2 sectors reveals heterogenous short-run effects across sectors and time periods, with numerous sectors indicating the seemingly perverse finding that an increase in political cooperation/conflict is associated with a decrease/increase in export growth, with a lag of one to four months. We propose two hypotheses that are consistent with these findings, ‘doubling down’ and ‘dropping the ball’, contributing new understanding to the political relations-trade nexus in the context of a bilateral relationship that will likely be characterised by both cooperation and conflict in the decades ahead.
KW - Political relations
KW - conflict
KW - cooperation
KW - trade
UR - http://www.scopus.com/inward/record.url?scp=85136852069&partnerID=8YFLogxK
U2 - 10.1080/17538963.2022.2117180
DO - 10.1080/17538963.2022.2117180
M3 - Article
SN - 1753-8963
VL - 15
SP - 290
EP - 309
JO - China Economic Journal
JF - China Economic Journal
IS - 3
ER -