IMF Working Papers

Global Financial Spillovers of Chinese Macroeconomic Surprises

By Camila Gutierrez, Javier Turen, Alejandro Vicondoa

July 4, 2025

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Format: Chicago

Camila Gutierrez, Javier Turen, and Alejandro Vicondoa. "Global Financial Spillovers of Chinese Macroeconomic Surprises", IMF Working Papers 2025, 133 (2025), accessed July 30, 2025, https://doi.org/10.5089/9798229015240.001

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

We study how Chinese macroeconomic surprises affect global financial markets. Exploiting forecast errors around key data releases and a 60-minute window around the release, we show that positive industrial production (IP) surprises lead to immediate increases in Chinese and Asia-Pacific stock returns, global long-term yields, and commodity prices highly demanded by China. A complementary identification strategy, which builds on different time zones, confirms positive spillovers to international equity markets, with stronger effects in countries more exposed to Chinese trade. Our results highlight the role of both Hedging Premia and Growth Expectations in driving asset price comovement. The findings highlight China’s growing influence in global markets and position it as a driver of the Global Financial Cycle.

Subject: Asset prices, Commodities, Commodity prices, Exports, Financial institutions, Financial markets, Industrial production, International trade, Prices, Production, Stock markets, Stocks

Keywords: Asia and Pacific, Asset prices, China, Commodity prices, Exports, Global, Global Financial Cycle, High-frequency, Imports, Industrial production, Spillovers, Stock markets, Stocks

Publication Details

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