A multi-dimensional assessment of China's macroeconomic resilience under external uncertainty shocks

Based on quarterly data for China from the first quarter of 2007 to the fourth quarter of 2024, this paper employs a Stochastic Volatility-Time-Varying Parameter-Factor Augmented Vector Autoregression (SV-TVP-FAVAR) model constructed from 60 macroeconomic indicators. It empirically analyzes the transmission mechanisms and dynamic adjustment paths of China's macroeconomic resilience in response to three types of shocks, namely geopolitical risk, trade policy uncertainty, and economic policy uncertainty, across the three dimensions of resistance capacity, recovery capacity, and transformation capacity. The results show significant heterogeneity in the effects of different uncertainty shocks across these three dimensions. Specifically, while geopolitical risk (GPR) shocks lead to a decline in short-term resistance capacity, while enhancing long-term transformation capacity; trade policy uncertainty (TPU) triggers the strongest recovery response, but its contribution to transformation capacity is relatively limited; and economic policy uncertainty (EPU) shocks, although associated with relatively stable resistance capacity, provide weak support for long-term transformation. These findings suggest that different types of uncertainty shocks affect China's macroeconomic resilience through distinct transmission channels and time paths. The main contribution of this study lies in combining a three-dimensional resilience framework with a dynamic high-dimensional econometric model, thereby providing more systematic empirical evidence for understanding the differentiated adjustment mechanisms of China's macroeconomic resilience under internal and external uncertainty shocks.