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What do Chinese Macro Announcements Tell Us About the World Economy?

  • Christopher F Baum

    ()

    (Boston College
    DIW Berlin)

  • Alexander Kurov

    ()

    (Department of Finance, West Virginia University)

  • Marketa W. Halova

    ()

    (Department of Economics, Washington State University)

We examine the effect of scheduled macroeconomic announcements made by China on world financial and commodity futures markets. All announcements related to Chinese manufacturing and industrial output move stock markets, energy and industrial commodities as well as commodity currencies. News about Chinese domestic consumption leaves most markets unaffected, suggesting that market participants view the announcements primarily as a signal of the state of the global economy rather than merely of China's domestic demand. The market response to unexpectedly strong output announcements is not consistent with investors being concerned about tightening of Chinese macroeconomic policy; instead, the world markets view strong Chinese output as a rising tide that lifts all boats.

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Paper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 834.

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Date of creation: 01 Oct 2013
Date of revision: 01 Jun 2015
Publication status: forthcoming, Journal of International Money and Finance
Handle: RePEc:boc:bocoec:834
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