Zhang Zhiqiang | Impact of Overseas COVID-19 Pandemic Shock on China's Economy
Recently, the Center for International Finance and Economics Research (CIFER) of the National Institute of Financial Research at Tsinghua University hosted...Academic Symposium on "2022 International Trade Disputes and the Restructuring of Globalization"The event was successfully held.Postdoctoral Fellow, School of Economics, Fudan UniversityZhang ZhiqiangAttendDepend onCIFER Part-time Researcher、Assistant Professor, School of Economics, Central University of Finance and EconomicsZhang JialiangHostPandemic, Economic Uncertainty and Geographic EconomicsSub-forum 8Sharing with collaborators on the topic《The impact of the overseas pandemic on China's economy》(Impact of Overseas Covid Pandemic Shock on the Chinese Economy）The article.
Zhang ZhiqiangPostdoctoral fellow at the School of Economics, Fudan University, PhD in Economics from Fudan University, with research interests in geography, environment and trade.
Zhang Zhiqiang
In sharing his article with collaborators, Dr. Zhang Zhiqiang mentioned...The global COVID-19 pandemic has severely impacted the world economy. This paper examines the impact of the overseas pandemic on China's economy. Using nighttime light and pollution data at the county/district/monthly level, and incorporating overseas pandemic and vaccine data, this paper constructs an indicator of the impact of the overseas pandemic on counties/districts. The study finds that the overseas pandemic impact has a significant negative effect on the growth rate of county/district light intensity. Further analysis reveals that counties/districts specializing in the production of medical supplies before the outbreak maintained faster economic growth rates than other counties/districts after the outbreak. Simultaneously, the overseas pandemic impact led to a contraction in China's foreign trade with other countries. Furthermore, the overseas pandemic impact on counties/districts exhibits spatial spillover effects; if a county/district is located near areas heavily impacted by the overseas pandemic, its light intensity growth rate will significantly decrease. Finally, this paper also finds that the overseas pandemic impact at the county/district level did not affect local air pollution changes, but significantly increased regional pollution intensity. This research reveals the impact of the overseas pandemic on the country, providing empirical evidence and important insights for the formulation of relevant public policies in China and globally.
This paper uses nighttime light and pollution data at the county/district/monthly level, and constructs indicators of the impact of the international pandemic on county/district levels using data on overseas epidemics and vaccines, to examine the impact of the international pandemic on China's economic activities. To overcome data limitations, this paper uses pollution data derived from nighttime light and remote sensing images, and constructs Bartik instrumental variables at the monthly/county/monthly level using 2016 China Customs data and 2020-2021 epidemic and vaccine data to reveal the impact of the international pandemic on local areas. Methodologically, economic activity indicators and endogeneity handling methods are constructed. These include economic activity indicators: using satellite nighttime light data to measure regional economic activity, and using pollution datasets derived from satellite remote sensing images to characterize pollution and county/district indicators of the impact of the international pandemic. Through empirical analysis, benchmark regression, heterogeneity analysis, mechanism analysis, and considering the impact of spatial general equilibrium effects, as well as robustness tests, the regression results in this paper remain consistent with the benchmark regression at the county/district level. The empirical results of this paper find that the international pandemic impact at the county/district level did not affect local air pollution changes, but significantly increased regional pollution intensity. It is worth noting that the findings of this paper only reveal the short-term impact of the overseas pandemic. Further analysis is needed to assess the long-term impact of the overseas pandemic on the restructuring of global industrial chains, regional import and export structures, and corporate investment.
This study concludes that: the impact of the overseas pandemic on the growth rate of nighttime light intensity in districts and counties has had a significant negative impact; districts and counties specializing in the production of medical supplies maintain faster economic growth, while China's foreign trade with these countries has shrunk; local areas located near regions heavily impacted by the overseas pandemic will see a significant decrease in the growth rate of nighttime light intensity; and the overseas pandemic significantly increases regional pollution levels. This research reveals the impact of the overseas pandemic on domestic situations, providing empirical evidence and important insights for China and the world in formulating relevant public policies. First, when facing external shocks similar to those caused by overseas public health crises, governments should implement timely and precise measures to minimize the impact of these external shocks on China's economy and trade. Second, China should further accelerate the construction of a new development pattern of dual circulation, both domestically and internationally. Third, China should actively participate in global governance and promote vaccine programs globally to facilitate global economic recovery.
Zhang Guofeng
Associate Professor, School of International Economics and Trade, University of International Business and EconomicsZhang GuofengThe paper argues the following: First, regarding the indicators for measuring the Chinese economy, are indicators such as light intensity, import and export levels, and environmental pollution sufficient to fully measure the Chinese economy? Could the suitability of the selected indicators be discussed in more detail? Second, the exogeneity of the initial import and export shares in the Bartik instrumental variables is difficult to satisfy. This paper focuses on examining the exogeneity of the impact of the overseas pandemic/vaccine, and the difference between exogeneity and externality. Furthermore, could the calculation method of the weighted indicators be reconsidered? Third, regarding the economic implications of import and export weights, should the paper add an explanation of the economic meaning of export weights (domestic production - foreign demand) and import weights (foreign production - domestic demand)? Finally, given that this paper uses county-level clustering, should provincial-level clustering be considered to replace the currently used county-level data for better data aggregation?