IDEAS home Printed from https://ideas.repec.org/a/gam/jmathe/v13y2025i5p838-d1604188.html
   My bibliography  Save this article

Shock Propagation and the Geometry of International Trade: The US–China Trade Bipolarity in the Light of Network Science

Author

Listed:
  • Evangelos Ioannidis

    (School of Economics, Aristotle University of Thessaloniki, 54124 Thessaloniki, Greece)

  • Dimitrios Dadakas

    (School of Economics, Aristotle University of Thessaloniki, 54124 Thessaloniki, Greece)

  • Georgios Angelidis

    (School of Economics, Aristotle University of Thessaloniki, 54124 Thessaloniki, Greece)

Abstract

What is the impact of geopolitics on the geometry of global trade? What is the key structural role that led to the emergence of the US–China trade bipolarity? Here, we study the geometry of international trade, taking into account not only the direct but also the indirect trade relations. We consider the self-weight of each country as an indicator of its intrinsic robustness to exogenous shocks. We assess the vulnerability of a country to potential demand or supply shocks based on the entropy (diversification) of its trade flows. By considering the indirect trade relations, we found that the key structural role that led to the emergence of the US–China trade bipolarity is that of the intermediary hub that acts as a “ bridge ” between different trade clusters. The US and China occupied key network positions of high betweenness centrality as early as 2010. As international trade was increasingly dependent on only these two intermediary trade hubs, this fact led to geopolitical tensions such as the US–China trade war. Therefore, betweenness centrality could serve as a structural indicator, forewarning of possible upcoming geopolitical tensions . The US–China trade bipolarity is also strongly present in self-weights, where a race in terms of their intrinsic robustness to exogenous shocks is more than evident. It is also interesting that the US and China are not only the top shock spreaders but also the most susceptible to shocks. However, China can act more as a shock spreader than a shock receiver, while for the USA, the opposite is true. Regarding the impact of geopolitics, we found that the Russia–Ukraine conflict forced Ukraine to diversify both its exports and imports , aiming to lower its vulnerability to possible shocks . Finally, we found that international trade is becoming increasingly oligopolistic , even when indirect trade relationships are taken into account, thus indicating that a “ Deep Oligopoly ” has formed.

Suggested Citation

  • Evangelos Ioannidis & Dimitrios Dadakas & Georgios Angelidis, 2025. "Shock Propagation and the Geometry of International Trade: The US–China Trade Bipolarity in the Light of Network Science," Mathematics, MDPI, vol. 13(5), pages 1-31, March.
    • Handle: RePEc:gam:jmathe:v:13:y:2025:i:5:p:838-:d:1604188
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7390/13/5/838/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7390/13/5/838/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lee, Yusin, 2017. "Interdependence, issue importance, and the 2009 Russia-Ukraine gas conflict," Energy Policy, Elsevier, vol. 102(C), pages 199-209.
    2. Alekhina, Victoriia & Yoshino, Naoyuki, 2018. "Impact of World Oil Prices on an Energy Exporting Economy Including Monetary Policy," ADBI Working Papers 828, Asian Development Bank Institute.
    3. Ahmed, Abdullahi D. & Huo, Rui, 2021. "Volatility transmissions across international oil market, commodity futures and stock markets: Empirical evidence from China," Energy Economics, Elsevier, vol. 93(C).
    4. Zhu, Min & Dong, Peiwu & Ju, Yanbing & Fu, Zhengtang, 2024. "Assessing economies' resilience of international liquefied natural gas trade network in the presence of the ripple effect," Energy, Elsevier, vol. 313(C).
    5. Ben Salem, Leila & Nouira, Ridha & Saafi, Sami & Rault, Christophe, 2024. "How do oil prices affect the GDP and its components? New evidence from a time-varying threshold model," Energy Policy, Elsevier, vol. 190(C).
    6. Thomas Sampson, 2017. "Brexit: The Economics of International Disintegration," Journal of Economic Perspectives, American Economic Association, vol. 31(4), pages 163-184, Fall.
    7. Yucheng Hao & Limin Jia & Yanhui Wang & Zhichao He, 2021. "Modelling cascading failures in networks with the harmonic closeness," PLOS ONE, Public Library of Science, vol. 16(1), pages 1-14, January.
    8. Xing, Lizhi & Dong, Xianlei & Guan, Jun & Qiao, Xiaoyong, 2019. "Betweenness centrality for similarity-weight network and its application to measuring industrial sectors’ pivotability on the global value chain," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 516(C), pages 19-36.
    9. Hao, Yucheng & Jia, Limin & Wang, Yanhui, 2020. "Robustness of weighted networks with the harmonic closeness against cascading failures," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 541(C).
    10. Alexandros Z. Spyropoulos & Charalampos Bratsas & Georgios C. Makris & Evangelos Ioannidis & Vassilis Tsiantos & Ioannis Antoniou, 2022. "Investigation of Terrorist Organizations Using Intelligent Tools: A Dynamic Network Analysis with Weighted Links," Mathematics, MDPI, vol. 10(7), pages 1-22, March.
    11. Yousaf, Imran & Hassan, Arshad, 2019. "Linkages between crude oil and emerging Asian stock markets: New evidence from the Chinese stock market crash," Finance Research Letters, Elsevier, vol. 31(C).
    12. Natalia Boyko & Kjersti Nes & K. Aleks Schaefer, 2024. "International trade and Ukraine's pursuit of self‐determination," The World Economy, Wiley Blackwell, vol. 47(4), pages 1460-1477, April.
    13. Chang, Jeffery (Jinfan) & Du, Huancheng & Lou, Dong & Polk, Christopher, 2022. "Ripples into waves: Trade networks, economic activity, and asset prices," Journal of Financial Economics, Elsevier, vol. 145(1), pages 217-238.
    14. Karabulut, Gokhan & Bilgin, Mehmet Huseyin & Doker, Asli Cansin, 2020. "The relationship between commodity prices and world trade uncertainty," Economic Analysis and Policy, Elsevier, vol. 66(C), pages 276-281.
    15. Hao, Yucheng & Wang, Yanhui & Jia, Limin & He, Zhichao, 2020. "Cascading failures in networks with the harmonic closeness under edge attack strategies," Chaos, Solitons & Fractals, Elsevier, vol. 135(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Franken, Jonas & Reinhold, Thomas & Reichert, Lilian & Reuter, Christian, 2022. "The digital divide in state vulnerability to submarine communications cable failure," International Journal of Critical Infrastructure Protection, Elsevier, vol. 38(C).
    2. Hao, Yucheng & Jia, Limin & Zio, Enrico & Wang, Yanhui & Small, Michael & Li, Man, 2023. "Improving resilience of high-speed train by optimizing repair strategies," Reliability Engineering and System Safety, Elsevier, vol. 237(C).
    3. Xia, Weifu & Wang, Yanhui & Hao, Yucheng & He, Zhichao & Yan, Kai & Zhao, Fan, 2024. "Reliability analysis for complex electromechanical multi-state systems utilizing universal generating function techniques," Reliability Engineering and System Safety, Elsevier, vol. 244(C).
    4. Mensi, Walid & Hanif, Waqas & Vo, Xuan Vinh & Choi, Ki-Hong & Yoon, Seong-Min, 2023. "Upside/Downside spillovers between oil and Chinese stock sectors: From the global financial crisis to global pandemic," The North American Journal of Economics and Finance, Elsevier, vol. 67(C).
    5. Szczygielski, Jan Jakub & Charteris, Ailie & Obojska, Lidia, 2023. "Do commodity markets catch a cold from stock markets? Modelling uncertainty spillovers using Google search trends and wavelet coherence," International Review of Financial Analysis, Elsevier, vol. 87(C).
    6. He, Zhifang & Sun, Hao & Chen, Jiaqi & Yang, Xin & Yin, Zhujia, 2023. "Dynamic interaction of risk–return trade-offs between oil market and China’s stock market: An analysis from the risk preferences perspective," The North American Journal of Economics and Finance, Elsevier, vol. 67(C).
    7. Hao, Yucheng & Jia, Limin & Zio, Enrico & Wang, Yanhui & He, Zhichao, 2024. "A network-based approach to improving robustness of a high-speed train by structure adjustment," Reliability Engineering and System Safety, Elsevier, vol. 243(C).
    8. Mensi, Walid & Rehman, Mobeen Ur & Al-Yahyaee, Khamis Hamed & Vo, Xuan Vinh, 2023. "Frequency dependence between oil futures and international stock markets and the role of gold, bonds, and uncertainty indices: Evidence from partial and multivariate wavelet approaches," Resources Policy, Elsevier, vol. 80(C).
    9. He, Zhichao & Wang, Yanhui & Xia, Weifu & Shen, Yue & Hao, Yucheng & Ren, Qiuyang, 2023. "A method for reliability assessment of complex electromechanical system based on improved network connectivity entropy," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 632(P1).
    10. Ghaemi Asl, Mahdi & Adekoya, Oluwasegun Babatunde & Rashidi, Muhammad Mahdi & Ghasemi Doudkanlou, Mohammad & Dolatabadi, Ali, 2022. "Forecast of Bayesian-based dynamic connectedness between oil market and Islamic stock indices of Islamic oil-exporting countries: Application of the cascade-forward backpropagation network," Resources Policy, Elsevier, vol. 77(C).
    11. Hao, Yucheng & Jia, Limin & Zio, Enrico & Wang, Yanhui & He, Zhichao, 2023. "A multi-objective optimization model for identifying groups of critical elements in a high-speed train," Reliability Engineering and System Safety, Elsevier, vol. 235(C).
    12. Bin Mo & Juan Meng & Guannan Wang, 2023. "Risk Dependence and Risk Spillovers Effect from Crude Oil on the Chinese Stock Market and Gold Market: Implications on Portfolio Management," Energies, MDPI, vol. 16(5), pages 1-17, February.
    13. Jen-Yu Lee & Tien-Thinh Nguyen & Hong-Giang Nguyen & Jen-Yao Lee, 2022. "Towards Predictive Crude Oil Purchase: A Case Study in the USA and Europe," Energies, MDPI, vol. 15(11), pages 1-15, May.
    14. Bloom, Nicholas & Bunn, Philip & Chen, Scarlet & Mizen, Paul & Smietanka, Pawel & Thwaites, Gregory, 2019. "The impact of Brexit on UK firms," Bank of England working papers 818, Bank of England.
    15. Mensi, Walid & Rehman, Mobeen Ur & Vo, Xuan Vinh, 2022. "Spillovers and diversification benefits between oil futures and ASEAN stock markets," Resources Policy, Elsevier, vol. 79(C).
    16. Imran Yousaf & Shoaib Ali & Wing-Keung Wong, 2020. "An Empirical Analysis of the Volatility Spillover Effect between World-Leading and the Asian Stock Markets: Implications for Portfolio Management," JRFM, MDPI, vol. 13(10), pages 1-28, September.
    17. Patrick Bisciari, 2019. "A survey of the long-term impact of Brexit on the UK and the EU27 economies," Working Paper Research 366, National Bank of Belgium.
    18. Liew, Venus Khim-Sen & Puah, Chin-Hong, 2020. "Chinese stock market sectoral indices performance in the time of novel coronavirus pandemic," MPRA Paper 100414, University Library of Munich, Germany, revised 28 Apr 2020.
    19. Ibrahim Alshomaly & Walid Shawaqfeh, 2020. "The Effect of Export Diversification on the Economic Growth of West-Asian Arab Countries," Journal of Social Sciences (COES&RJ-JSS), , vol. 9(2), pages 429-450, April.
    20. Walter Bossert & Andrew E Clark & Conchita D’Ambrosio & Anthony Lepinteur, 2023. "Economic insecurity and political preferences," Oxford Economic Papers, Oxford University Press, vol. 75(3), pages 802-825.

    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:gam:jmathe:v:13:y:2025:i:5:p:838-:d:1604188. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.