China's Economy and the Global Financial Crisis

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  • Sima Siami-Namini Texas Tech University


The aim of this article is to provide a brief overview of the increasing importance of China's economy around the world economy, and to discuss the impacts of the global financial crisis on China's economy. While China's economic growth remained well above international averages, its drop was of the same order of magnitude as for the US. The question is that how China responds to the global financial crisis. Using two individual vector auto-regression (VAR) models, I analyze the relationship between China's output and two foreign outputs including US and Germany over the period of 1979-2013. The results of VAR Granger-casualty show that China's output and US output does affect each other. Also, China's output affect Germany output, but not vice versa. Besides that, China's output illustrates variance decomposition (VDC) of US output with 3.21%,   and US output explains VDC of China's output with 0.14%. China's output illustrates VDC of Germany output with 7.84%, and Germany output explains VDC of China's output with 1.36%. Therefore, the impact of US output shock on China is greater than Germany output shock.Keywords: Global Financial Crisis, China's Economy, Vector Auto-regression model (VAR).JEL Classifications: G01, E37, C32, F43. 


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Author Biography

Sima Siami-Namini, Texas Tech University

Sima Siami-Namini is a third year Ph.D. Student and graduate research assistant in applied economics in department of Agriculture and Applied economics at Texas Tech University. Her research focuses on macroeconomic and monetary policy, income inequality, financial markets and commodity prices, time series analysis and econometrics and Austrian Economic Theory. She has authored several articles published in the journals and attended in several articles in SEA conference, AAEA and SAEA conference for presenting her papers. Before starting her Ph.D. degree in the US, she worked for almost 20 years in the Macroeconomics Department of Management and Planning Organization (Government) in Iran (Tehran) as a senior economic expert and she also worked for one year in central bank of Iran in the field of macroeconomic modeling. She had a certificate from Harvard University in the field of public policy in economics.




How to Cite

Siami-Namini, S. (2017). China’s Economy and the Global Financial Crisis. International Journal of Economics and Financial Issues, 7(5), 259–265. Retrieved from