Impact of Regional Reactions to War on Contemporary Chinese Trade

TL;DR

This paper examines how regional reactions to historical wars in China influence contemporary trade patterns, highlighting the role of cultural barriers, elite reforms, and regional differences in shaping import dynamics.

Contribution

It introduces a novel analysis linking historic regional political conflicts and elite reforms to current Chinese trade behaviors, emphasizing cultural and trust factors.

Findings

Regional exam passing increases by 1% post-war

Imports decrease by 2.05% in 2001 due to cultural barriers

Manufactured goods and foreign trade are affected by regional trust and risk aversion

Abstract

Different regional reactions to war in 1894 and 1900 can significantly impact Chinese imports in 2001. As international relationship gets tense and China rises, international conflicts could decrease trade.We analyze impact of historic political conflict. We measure regional change of number of people passing imperial exam because of war. War leads to an unsuccessful reform and shocks elites. Elites in different regions have different ideas about modernization, and the change of number of people passing exam is quite different in different regions after war. Regional number of people passing exam increases 1% after war, imports from then empires decrease 2.050% in 2001, and this shows impact of cultural barrier. Manufactured goods can be impacted because brands can be identified easily. Risk aversion of expensive products in conservative regions can increase imports of equipment. Value chains need deep trust, and this decreases imports of foreign company and assembly trade.