What Do Chinese Macro Announcements Tell Us About the World Economy?

47 Pages Posted: 15 Oct 2013 Last revised: 17 Jul 2015

See all articles by Christopher F. Baum

Christopher F. Baum

Boston College - Department of Economics

Alexander Kurov

West Virginia University - College of Business & Economics

Marketa Wolfe

Skidmore College - Department of Economics

Date Written: June 1, 2015

Abstract

We examine the effect of scheduled macroeconomic announcements made by China on world financial and commodity futures markets. All announcements related to Chinese manufacturing and industrial output move stock markets, energy and industrial commodities as well as commodity currencies. News about Chinese domestic consumption leaves most markets unaffected, suggesting that market participants view the announcements primarily as a signal of the state of the global economy rather than merely of China’s domestic economy. The market response to unexpectedly strong output announcements is not consistent with investors being concerned about tightening of Chinese macroeconomic policy; instead, the world markets view strong Chinese output as a rising tide that lifts all boats.

Keywords: Macroeconomic news, China, Economic integration, Financial markets, Commodity prices

JEL Classification: E44; G14; G15

Suggested Citation

Baum, Christopher (Kit) F. and Kurov, Alexander and Wolfe, Marketa, What Do Chinese Macro Announcements Tell Us About the World Economy? (June 1, 2015). Journal of International Money and Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2339825 or http://dx.doi.org/10.2139/ssrn.2339825

Christopher (Kit) F. Baum

Boston College - Department of Economics ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States
617-552-3673 (Phone)
617-552-2308 (Fax)

Alexander Kurov (Contact Author)

West Virginia University - College of Business & Economics ( email )

P.O. Box 6025
Morgantown, WV 26506
United States

Marketa Wolfe

Skidmore College - Department of Economics ( email )

815 N Broadway
Saratoga Springs, NY 12866
United States
+1-518-580-8374 (Phone)

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