THE IMPACT OF ECONOMIC POLICE UNCERTAINTY, ECONOMIC AND TRADE ON CREDIT SUPPLY IN CHINA

Abstract

In recent years, the global political and economic environment has become increasingly complex and ever-changing, with increasing uncertainties. Global politics and economy are on a path of continuous deepening and adjustment, and the uncertainty of the political and economic situation worldwide is constantly increasing. Since the reform and opening up, commercial banks have always played an important role in China's economic development. The changes in bank credit constantly affect the fluctuations of the Chinese economy, and credit management is also one of the important measures taken by the government to control the economy. The development of China's financial market has formed a financing structure represented by indirect financing, and bank credit accounts for a large proportion of China's credit. Most Chinese companies rely on banks for indirect financing. Therefore, exploring the influencing factors of bank credit has always been a focus of attention in both theoretical and practical fields. Looking back at the history of economic development both domestically and internationally, it can be found that external economic shocks have brought uncertainty to economic development, accompanied by changes in bank credit growth rates. The economic shocks represented by the subprime crisis and the current epidemic are particularly significant. This article uses theoretical and empirical methods to examine whether the uncertainty of China's economic policies will have an impact on the credit supply of commercial banks. This study draws inspiration from the research of Danisman et al. (2020) and uses the OLS model to study the impact of economic policy uncertainty, international trade, macroeconomic data, and bank characteristics on the supply of bank credit. The sample of this article includes data from 130 commercial banks in China from 1979 to 2020.