We are delighted to earn the Scottish Journal of Political Economy Prize for the Best Paper published in 2024 for our joint research with Yifei Cai and Yanrui Wu. During my journey in economics, I never expected that I would earn a prize one day in my life. I am so happy that the committee of the prestigious Scottish Society of Economists decided to give us the Best Prize Paper for our research on Political relations and trade: New evidence from Australia, China, and the United States. The paper is very topical and can lead us to expand this area of research, which we will be under scrutiny during the upcoming months due to trade policy uncertainty and heightened tensions between the US and China. We could have called the paper “A friend of a rival is a rival.” I need to make some progress in naming the research projects. I hope to continue to work with these wonderful guys. The article is in open access, so feel free to take a look.
Abstract: This article employs structural vector autoregression and local projection methods to examine the impacts of the deterioration in the US–China political relations on bilateral trade between Australia and China. Three scenarios are considered to reflect the evolution of US geopolitical strategies in recent years, such as “America First”, “China Threat Theory” and “The Protection of US Allies”. The simulation results illustrate that worsening the US–China political relations has a negative impact on Australian exports to and imports from China. It is also found that economic conditions in the US play a more important role in the transmission of this impact than those in China and Australia. In addition, various options are explored to check the robustness of the findings in this article.
JEL classification: C32, F14, F51.
