China’s Aggregate Impacts on the Exports and GDP of Asian Countries

This study investigates China’s new economy to estimate the impacts of China on Asian countries. For the period between 1995 and 2015, the Korea GDP increases by an average of approximately 3.34 percent and the Japanese GDP increases by approximately 0.11 percent for every one percent increase in China’s private final consumption. Also, for every one percent increase in China’s private final consumption change, Hong Kong’s GDP change increases by approximately 0.96 percent, Philippines GDP change increases by approximately 1.57 percent, Thailand’s GDP change increases by approximately 1.64 percent, Singapore’s GDP change increases by approximately 1.69 percent, and the world GDP change increases by approximately 0.65 percent. We are able to confirm a structural change of China since the financial crisis. We find that the individual impact of China’s final consumption on the foreign exports and GDP growth decreases in the cases of Korea, Hong Kong, Philippines, Thailand, and Singapore. Also, the Asia regional impact of China’s consumptions decreases. These results are a recent result of China’s demand creation by slowing growth, domestic demand-led-industrialization to replace exports, expansion in the service industry, and China inside policy. Future research should provide the microeconomic estimation of value added outputs required to set industrial policies from a global value chain perspective.