IDEAS home Printed from https://ideas.repec.org/a/eee/jimfin/v162y2026ics0261560625002499.html

Assessing financial risk in China: a text-based indicator approach

Author

Listed:
  • Al-Haschimi, Alexander
  • Apostolou, Apostolos
  • Azqueta-Gavaldon, Andres
  • Ricci, Martino

Abstract

This paper examines the complexities and global repercussions of financial risk in China by developing a novel text-based financial risk indicator tailored to the Chinese context. We identify key themes such as banking, financial markets, exchange rates, real estate, corporate profitability, and corporate investment, which significantly influenced financial risk during critical periods like the 2015–16 financial stress episode and the 2021 Evergrande default. Utilizing a Structural Vector Autoregression (SVAR) framework, we analyze the impact of the aggregated financial risk indicator on both the Chinese and the global economy. Our findings reveal that heightened financial risk in China correlates with a drop in equity prices and has substantial global repercussions, including contractions in world industrial production, declines in global oil prices, and widened emerging market government bond spreads.

Suggested Citation

  • Al-Haschimi, Alexander & Apostolou, Apostolos & Azqueta-Gavaldon, Andres & Ricci, Martino, 2026. "Assessing financial risk in China: a text-based indicator approach," Journal of International Money and Finance, Elsevier, vol. 162(C).
    • Handle: RePEc:eee:jimfin:v:162:y:2026:i:c:s0261560625002499
    DOI: 10.1016/j.jimonfin.2025.103514
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0261560625002499
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jimonfin.2025.103514?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C65 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Miscellaneous Mathematical Tools
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jimfin:v:162:y:2026:i:c:s0261560625002499. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30443 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.