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Does the uncertainty of U.S. economic policy change Chinese communications landscape under the 5G wave?

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  • Shen, Haotian
  • Peng, Lijuan

Abstract

Against the backdrop of China's booming communications industry, this study delves into the transmission of policy risk from U.S. economic policy uncertainty (USEPU) to China's three major telecom operators. An analysis of specific quantiles representing diverse market states from extreme bear markets to bull markets reveals the asymmetric impacts of USEPU and its subcomponents. The results show that USEPU factors, including trade (TU), government spending (GSU), and entitlement programs (ENPU), exert differential effects on stock returns depending on market conditions. For China Mobile, no USEPU measures significantly impact stock returns during bear markets, but various factors emerge as the market improves. Compared with China Mobile, China Unicom and China Telecom display mixed similarities and differences. China Unicom is less responsive to monetary policy uncertainty (MPU) but more sensitive to regulatory uncertainty (RU). China Telecom's response aligns with China Unicom under Models 1 and 2 and with China Mobile under Model 3. These findings underscore the intricate relationship between USEPU and telecom stocks, emphasising the need to consider market states and model specifications in analysis.

Suggested Citation

  • Shen, Haotian & Peng, Lijuan, 2025. "Does the uncertainty of U.S. economic policy change Chinese communications landscape under the 5G wave?," International Review of Economics & Finance, Elsevier, vol. 102(C).
    • Handle: RePEc:eee:reveco:v:102:y:2025:i:c:s1059056025005362
    DOI: 10.1016/j.iref.2025.104373
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