Authors : Lebedeva Kristina

Volume/Issue : Volume 11 - 2026, Issue 2 - February

Google Scholar : https://tinyurl.com/bpu7b6aw

Scribd : https://tinyurl.com/3v2ufuv6

DOI : https://doi.org/10.38124/ijisrt/26feb1460

Note : A published paper may take 4-5 working days from the publication date to appear in PlumX Metrics, Semantic Scholar, and ResearchGate.

Abstract : This paper examines how economic policy uncertainty (EPU) affects China’s bilateral export performance, distinguishing between uncertainty originating in destination markets and China’s domestic policy environment. Using a quarterly panel covering 2005–2024 for China’s exports to 18 partner countries (excluding 2008–2009 and 2020–2021), we estimate two-way fixed-effects models with partner-country and time fixed effects and clustered standard errors. The baseline results indicate a trade-reducing effect of partner-country EPU: higher policy uncertainty in the importing economy is associated with lower Chinese exports, consistent with demand and risk channels. Domestic EPU is also negative, but less precisely estimated in the baseline, suggesting a weaker aggregate effect once destination-market conditions and macro controls are accounted for. Robustness checks and lag-based IV estimates support the stability of the core findings. Sectoral regressions reveal meaningful heterogeneity: partner-country EPU is most influential in textiles and machinery, while domestic EPU is detected primarily in metals/chemicals, highlighting that uncertainty effects depend on industry characteristics and exposure to demand postponement and investment delays.

Keywords : Economic Policy Uncertainty, Foreign Trade, China’s Export Trade.

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