Regional Pull vs Global Push Factors: China and US Influence on Asia-Pacific Financial Markets

30 Pages Posted: 13 Sep 2016

See all articles by Chang Shu

Chang Shu

Independent

Dong He

International Monetary Fund (IMF) - Monetary and Exchange Affairs Department

Jinyue Dong

City University of Hong Kong (CityUHK)

Honglin Wang

Hong Kong Monetary Authority - Hong Kong Institute for Monetary Research (HKIMR)

Date Written: September 2016

Abstract

This paper compares spillovers from the US and Chinese financial markets to the rest of Asia-Pacific. Structural VAR analysis points to the growing influence of Chinese equities and currency movements. In normal times China's influence in the equity market has risen to a level close to that of the United States, although the relative impact of the United States became stronger in crisis periods. Nonetheless, China's bond market remains a negligible player. The influence of China may be interpreted as a "regional pull" factor, while that of the United States remains a key "global push" factor.

Keywords: China's impact, spillovers to Asian financial markets, US, structural VAR, sign restrictions

JEL Classification: F30, G15

Suggested Citation

Shu, Chang and He, Dong and Dong, Jinyue and Wang, Honglin, Regional Pull vs Global Push Factors: China and US Influence on Asia-Pacific Financial Markets (September 2016). BIS Working Paper No. 579. Available at SSRN: https://ssrn.com/abstract=2837931

Chang Shu (Contact Author)

Independent ( email )

No Address Available
United States

Dong He

International Monetary Fund (IMF) - Monetary and Exchange Affairs Department ( email )

700 19th Street NW
Washington, DC 20431
United States
(202) 623-4062 (Phone)
(202) 589-4062 (Fax)

Jinyue Dong

City University of Hong Kong (CityUHK) ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong

Honglin Wang

Hong Kong Monetary Authority - Hong Kong Institute for Monetary Research (HKIMR) ( email )

3 Garden Road, 8th Floor
Hong Kong
China

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