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Chinese Influence in Australia: What Do Financial Markets Tell Us?

Australia—China relations, and especially Chinese influence in Australia, have been the subject of heated debate in Australia since 2016. The central issue is, how to balance concerns over Chinese influence in Australia with the economic benefits of Chinese trade and investment? This study—arguably...

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Detalles Bibliográficos
Autor principal: Liu, Kerry
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Springer Netherlands 2020
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7476678/
https://www.ncbi.nlm.nih.gov/pubmed/32921970
http://dx.doi.org/10.1007/s12140-020-09346-7
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description Australia—China relations, and especially Chinese influence in Australia, have been the subject of heated debate in Australia since 2016. The central issue is, how to balance concerns over Chinese influence in Australia with the economic benefits of Chinese trade and investment? This study—arguably the first of its kind—answers this question using rigorous empirical modelling. First, it uses Google Trends search results to measure Chinese influence in Australia. Second, it connects Chinese influence, as reflected in Google Trends search results, to financial markets, including stock markets, government bond markets and foreign exchange markets. Weekly data for January 2016–December 2019 are entered into an exponential generalised autoregressive conditional heteroskedastic model. The study finds that the effects of concerns over Chinese influence relate mainly to increased volatility of stock market indices and government bond yields, and downward pressure on the share prices of individual firms that are heavily exposed to Chinese markets. However, the overall effects appear to be minor or insignificant. The implications of these results are that China’s economic coercion (if any) may not be effective, and Australia’s responses to Chinese influence and interference (if any) may generate insignificant costs. Finally, this study makes original and significant academic contributions to academia by providing a novel framework for exploring international relations.
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spelling pubmed-74766782020-09-08 Chinese Influence in Australia: What Do Financial Markets Tell Us? Liu, Kerry East Asia (Piscataway) Article Australia—China relations, and especially Chinese influence in Australia, have been the subject of heated debate in Australia since 2016. The central issue is, how to balance concerns over Chinese influence in Australia with the economic benefits of Chinese trade and investment? This study—arguably the first of its kind—answers this question using rigorous empirical modelling. First, it uses Google Trends search results to measure Chinese influence in Australia. Second, it connects Chinese influence, as reflected in Google Trends search results, to financial markets, including stock markets, government bond markets and foreign exchange markets. Weekly data for January 2016–December 2019 are entered into an exponential generalised autoregressive conditional heteroskedastic model. The study finds that the effects of concerns over Chinese influence relate mainly to increased volatility of stock market indices and government bond yields, and downward pressure on the share prices of individual firms that are heavily exposed to Chinese markets. However, the overall effects appear to be minor or insignificant. The implications of these results are that China’s economic coercion (if any) may not be effective, and Australia’s responses to Chinese influence and interference (if any) may generate insignificant costs. Finally, this study makes original and significant academic contributions to academia by providing a novel framework for exploring international relations. Springer Netherlands 2020-09-07 2021 /pmc/articles/PMC7476678/ /pubmed/32921970 http://dx.doi.org/10.1007/s12140-020-09346-7 Text en © Springer Nature B.V. 2020 This article is made available via the PMC Open Access Subset for unrestricted research re-use and secondary analysis in any form or by any means with acknowledgement of the original source. These permissions are granted for the duration of the World Health Organization (WHO) declaration of COVID-19 as a global pandemic.
spellingShingle Article
Liu, Kerry
Chinese Influence in Australia: What Do Financial Markets Tell Us?
title Chinese Influence in Australia: What Do Financial Markets Tell Us?
title_full Chinese Influence in Australia: What Do Financial Markets Tell Us?
title_fullStr Chinese Influence in Australia: What Do Financial Markets Tell Us?
title_full_unstemmed Chinese Influence in Australia: What Do Financial Markets Tell Us?
title_short Chinese Influence in Australia: What Do Financial Markets Tell Us?
title_sort chinese influence in australia: what do financial markets tell us?
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7476678/
https://www.ncbi.nlm.nih.gov/pubmed/32921970
http://dx.doi.org/10.1007/s12140-020-09346-7
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