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Asian Nations and Multinationals pp 139–157Cite as

Impact of the Trump Administration on the Economies of the Greater China Region

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Abstract

The new economic policies initiated by the 45th US president Donald Trump, and their impact on the economies of the “the Greater China Region” (Hong Kong, Taiwan and Mainland China) are examined in this chapter. The impact is assessed at both the stock exchange and other non-financial markets levels. For the stock markets, the chosen research period runs from January 2014 to June 2017, and the Economic Policy Uncertainty Index in the United States is used as a proxy to measure political uncertainty in the main world economy. The results show that the stock markets in the “Greater China Region” did not react to the uncertainty generated by the US election in November 2016, but an examination of the move towards assertive trade US protectionist policies suggest a more detrimental impact on the GCR.

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Notes

  1. 1.

    This is all connected with the very issue of “market economy status” that has been denied to China by both the USA and the EU in the Spring of 2017.

  2. 2.

    The Trans-Atlantic Trade and Investment Partnership (TTIP) with the EU was suspended by the US Administration in the end of 2017 and the Trans-Pacific Partnership (TPP) was finally signed in March 2018 without the USA .

  3. 3.

    Macau is not included as part of this study, because it does not have a stock market.

  4. 4.

    The import content of exports is defined by the OECD (2018) as the share of imported inputs in the overall exports of a country. This statistical indicator measures therefore the foreign VA share of gross exports.

  5. 5.

    Note that when China joined the WTO in 2001, it accepted to be treated as a non-market economy in anti-dumping procedures until 2016; this implied that its prices and costs were assumed to be artificially set and were therefore not used by the investigating authority in alleged cases of dumping. The reference prices used were instead those of an analogue country (Japan or the USA ) where prices are much higher. When its status came up for debate at WTO level in 2016, both the EU and USA denied China its much after-sought market economy status (MES). The EU’s refusal is based on, inter alia, the degree of government influence over the allocation of resources .

  6. 6.

    See for example the position of German industrialists on this issue in BDI (2017).

  7. 7.

    For more on this, the interested reader can refer to our recent empirical work (see Morales and Andreosso-O’Callaghan 2018).

  8. 8.

    See the evidence contained in the annual reports by the EU Chamber of Commerce in China (for example 2011/2012).

  9. 9.

    Defined at the 8-digit level of the Harmonized Tariff Schedule of the United States (HTSUS), the list comprises products such as machines-tools (including those used in the textile industry); selected chemicals and pharmaceuticals products; iron, steel and alumina products; precision instruments and instrument engineering; telecommunications equipment; motor vehicles; and other products such as weapons (see USTR 2018).

  10. 10.

    North America Free Trade Agreement signed in August 1992 and in force since 1994.

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Author information

Authors and Affiliations

  1. University of Limerick, Limerick, Ireland

    Bernadette Andreosso-O’Callaghan

  2. Ruhr University Bochum, Bochum, Nordrhein-Westfalen, Germany

    Bernadette Andreosso-O’Callaghan

  3. Dublin Institute of Technology, Dublin, Ireland

    Lucía Morales

Authors
  1. Bernadette Andreosso-O’Callaghan
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  2. Lucía Morales
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Editor information

Editors and Affiliations

  1. University of Limerick, Limerick, Ireland

    Bernadette Andreosso-O’Callaghan

  2. University of Pau and Pays de l’Adour, Pau, France

    Jacques Jaussaud

  3. Ca Foscari University of Venice, Venice, Italy

    M. Bruna Zolin

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Andreosso-O’Callaghan, B., Morales, L. (2018). Impact of the Trump Administration on the Economies of the Greater China Region. In: Andreosso-O’Callaghan, B., Jaussaud, J., Zolin, M. (eds) Asian Nations and Multinationals. Palgrave Pivot, Cham. https://doi.org/10.1007/978-3-030-00913-7_9

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  • DOI: https://doi.org/10.1007/978-3-030-00913-7_9

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