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A Macro Assessment of China Effects on Malaysian Exports and Trade Balances


  • Chan, Tze-Haw
  • Lean, Hooi Hooi
  • Hooy, Chee Wooi


This paper focuses on the impact of China’s export expansion on Malaysian monthly trading with to her 12 major trading partners over the liberalization era. Structural break(s) found mostly coincides with the Asia financial crisis and China’s accession into WTO and, regime shifts are evident in the long run relationship among the variables being studied. While the income effects are more apparent, real exchanges are rather insignificant and incorrectly signed for Malaysian bilateral trading. An attempt to correct current account imbalances by currency devaluation would thereby inappropriate. In addition, estimation of the trade balance models is more superior that complementary China effects are better captured for Malaysia trading with the advanced markets such as Australia, German, Japan, UK and the US. Such finding may partly due to the increase in global product fragmentation

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  • Chan, Tze-Haw & Lean, Hooi Hooi & Hooy, Chee Wooi, 2013. "A Macro Assessment of China Effects on Malaysian Exports and Trade Balances," MPRA Paper 48801, University Library of Munich, Germany, revised 01 Aug 2013.
  • Handle: RePEc:pra:mprapa:48801

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    Cited by:

    1. repec:ipg:wpaper:2014-492 is not listed on IDEAS
    2. repec:ipg:wpaper:2014-574 is not listed on IDEAS
    3. repec:ipg:wpaper:2014-504 is not listed on IDEAS
    4. Chan, Tze-Haw, 2014. "Trade Balance, Foreign Exchange and Macroeconomic Impacts: An Empirical Assessment for China and Malaysia," MPRA Paper 59539, University Library of Munich, Germany, revised 10 Aug 2014.
    5. repec:ipg:wpaper:2014-550 is not listed on IDEAS

    More about this item


    Malaysian trading; China effect; cointegration; VAR; structural break;

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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