The roles of vehicle currency and real effective exchange rate in China’s trade with the whole EU

Figures & data

Figure 1. The CUSUM and CUSUMSQ tests of the REER model.Notes. The CUSUM and CUSUMSQ graphs are respectively indicated in blue and red.

Table 1. The impacts of real effective exchange rate on China’s trade balance with EU-28

REER model
Variables	Short run	Variables	Long run
ΔREER^+t	0.34***	REER^+t	1.58*
ΔREER^–t	−0.84***	REER^–t	0.56
ΔlnYt	0.25**	lnYt	−0.92
ΔlnYt-1	0.41***	lnYFt	2.86**
ΔlnYt-2	0.30***
ΔlnYFt	0.62*
Constant	−1.00
ECT	−0.21***	Breusch-Godfrey	1.43
Bound test	7.24***	Breusch-Pagan	0.58
Adj—R^2	0.66	Ramsey RESET	0.81

Note. The levels of significance 1%, 5%, and 10% are represented by ***, **, and *. The F statistics of bound test and diagnostic tests including Breusch-Godfrey, Breusch-Pagan, and Ramsey RESET are displayed.

Figure 2. The responses of trade balance to REER⁺ and REER.Notes. The blue and brown colors respectively denote the responses of trade balance to REER⁺ and REER^–.

Table 2. The impacts of vehicle currency exchange rate on China’s trade balance with EU-28

Vehicle currency model
Variables	Short run	Variables	Long run
ΔUSD^+t	−0.61	USD^+t	−0.92
ΔUSD^–t	1.65***	USD^–t	2.49***
ΔlnYt	0.39***	lnYt	0.59**
ΔlnYFt	−0.40	lnYFt	2.77***
Constant	−8.20***
ECT	−0.66***	Breusch-Godfrey	0.00
Bound test	10.02***	Breusch-Pagan	1.17
Adj—R^2	0.57	Ramsey RESET	0.41

Note. The levels of significance 1%, 5%, and 10% are represented by ***, **, and *. The F statistics of bound test and diagnostic tests including Breusch-Godfrey, Breusch-Pagan, and Ramsey RESET are displayed.

Figure 3. The CUSUM and CUSUMSQ tests of the vehicle currency model.Note. The CUSUM and CUSUMSQ graphs are respectively indicated in blue and red.

Figure 4. The responses of trade balance to USD⁺ and USD.Notes. The blue and brown colors respectively denote the responses of trade balance to USD⁺ and USD^–.

Table 3. The impacts of real effective exchange rate on China’s trade balance with EU-27

REER model
Variables	Short run	Variables	Long run
ΔREER^+t	0.18*	REER^+t	0.35*
ΔREER^–t	−0.43	REER^–t	0.47
ΔlnYt	0.09	lnYt	0.18
ΔlnYFt	2.05***	lnYFt	3.86***
Constant	−7.63***
ECT	−0.53***	Breusch-Pagan	1.66
Bound test	9.35***	Ramsey RESET	0.58
Adj—R^2	0.45	CUSUM	S
Breusch-Godfrey	0.02	CUSUMSQ	U

Note. The levels of significance 1%, 5%, and 10% are represented by ***, **, and *. The F statistics of bound test and diagnostic tests including Breusch-Godfrey, Breusch-Pagan, and Ramsey RESET are displayed. The outcomes of CUSUM and CUSUMSQ tests are denoted by S (stable) and U (unstable).

Table 4. The impacts of vehicle currency exchange rate on China’s trade balance with EU-27

Vehicle currency model
Variables	Short run	Variables	Long run
ΔUSD^+t	−0.18	USD^+t	−0.32
ΔUSD^–t	1.32***	USD^–t	2.29***
ΔlnYt	0.23**	lnYt	0.84***
ΔlnYFt	1.72***	lnYFt	2.98***
Constant	−8.25***
ECT	−0.57***	Breusch-Pagan	1.30
Bound test	9.96***	Ramsey RESET	0.87
Adj—R^2	0.54	CUSUM	S
Breusch-Godfrey	0.00	CUSUMSQ	S

Note. The levels of significance 1%, 5%, and 10% are represented by ***, **, and *. The F statistics of bound test and diagnostic tests including Breusch-Godfrey, Breusch-Pagan, and Ramsey RESET are displayed. The outcomes of CUSUM and CUSUMSQ tests are denoted by S (stable) and U (unstable).

Data availability statement

Data is available in public repository. The authors confirm that all data underlying the findings are fully available without restriction.