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<p>This study examines the impact of the US-China trade war on China’s stock markets. Using an event study with daily data from October 2017 to April 2018, Average abnormal return (AAR) and Cumulative abnormal return (CAR) were computed before and after March 23, 2018, when the US-China trade war was initiated. Our results show: First, AAR was negative ten days before and after the outbreak of the trade war while CAR was decreasing. Second, the negative effects of the trade started on the eighth day before the event and were strongest on the event day. Third, the trade war has a greater impact on companies in the Shanghai stock market. Fourth, emerging industries, such as software, information technology, scientific research, and technical services, have faster recovery on their abnormal returns. Lastly, the CSI 300 performs better than the CSI 500, followed by GEM. Our findings show that the trade war had a significant negative impact on the Shanghai and Shenzhen stock markets. As policy implications, immediate measures are needed to support firms that have been affected by the trade war. </p>

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Impact of the US-China Trade War on the China Stock Markets and Industrial Sectors: Are There any Stylized Facts?

  • 期刊论文

  • 发表日期：

    2025年10月9日

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  • Ting Yang,
  • Wee-Yeap Lau,
  • Elya Nabila Abdul Bahri

摘要

This study examines the impact of the US-China trade war on China’s stock markets. Using an event study with daily data from October 2017 to April 2018, Average abnormal return (AAR) and Cumulative abnormal return (CAR) were computed before and after March 23, 2018, when the US-China trade war was initiated. Our results show: First, AAR was negative ten days before and after the outbreak of the trade war while CAR was decreasing. Second, the negative effects of the trade started on the eighth day before the event and were strongest on the event day. Third, the trade war has a greater impact on companies in the Shanghai stock market. Fourth, emerging industries, such as software, information technology, scientific research, and technical services, have faster recovery on their abnormal returns. Lastly, the CSI 300 performs better than the CSI 500, followed by GEM. Our findings show that the trade war had a significant negative impact on the Shanghai and Shenzhen stock markets. As policy implications, immediate measures are needed to support firms that have been affected by the trade war.