The Influence Of Global Systemic Financial Risks On China’s Business Cycle Fluctuations

With liberalization and globalization of finance,the world financial system is closely linked and interacts,forming a dynamic and complex interconnected network.Once a major financial risk occurs in one country or a local area,it can easily spread to other countries through the interconnected network,leading to global systemic financial risks or even a global financial crisis.In recent years,the current international situation is complex and fluctuating,in the context of the continuous expansion of financial opening to the outside world,the possibility of the business cycle fluctuations being negatively impacted by global systemic financial risks has increased significantly.Although the CPC Central Committee has achieved phased results in the battle to prevent and defuse financial risks,there is still a long way to go to achieve the strategic goal of long-term balance.The Fifth Plenary Session of the 19 th Central Committee of the Communist Party of China in October 2020 further emphasized “adhering to the system concept”,starting from the whole and the overall situation,“paying attention to preventing and resolving major risks and challenges”.Therefore,it is necessary to explore the impact of global systemic financial risks on economic cycle fluctuations from a more comprehensive and multi-dimensional perspective.This can not only enrich financial and economic related theories,but also provide empirical support for proposing effective policies to rationally resolve systemic financial risks and stabilize economic cycle fluctuations.So obviously,this paper has very important theoretical significance and practical value.In existing studies,the impact of global systemic financial risks on my country’s economic cycle fluctuations has been significantly underestimated.On the one hand,there is a lack of theoretical analysis models that conform to the international financial environment and China’s actual economic conditions,and no theoretical explanation for the externalities and related externalities of global systemic financial risks.On the other hand,there is a lack of formal statistical analysis of the non-linear and superimposed impacts of global systemic financial risks on my country’s economic cycle fluctuations,and no empirical test has been conducted on the effects of multidimensional economic cycle fluctuations such as meso-regional and micro-enterprises.The thinking on the above two aspects constitutes the logical starting point and innovation of this paper.First,theoretically deduce the effect of global systemic financial risk on economic cycle fluctuations.On the basis of the extended Schumpeter growth model,a theoretical model that affects macroeconomic cycle fluctuations is constructed,and it is found that global systemic financial risks have a nonlinear impact on macroeconomic cycle fluctuations,and the fluctuations under different risk levels are heterogeneous.The external debt market pressure and credit constraints significantly affect the magnitude and magnitude of actual fluctuations.Based on the risk link network model,a theoretical model that affects regional economic cycle fluctuations is constructed,and it is found that provinces can establish a risk sharing mechanism to transfer global systemic financial risk shocks,and achieve regional economic cycle coordination by maximizing risk sharing benefits.However,once the cost of achieving a risk sharing mechanism is too high,it is difficult to maintain the link network between provinces for a long time,which often results in the differentiation characteristics of interregional economic cycle fluctuations.Based on the stock intrinsic value fluctuation model,a theoretical model that affects the business cycle fluctuations of enterprises is constructed.It is found that global systemic financial risks will increase the uncertainty of stock intrinsic value fluctuations,and will also interfere with investors’ prediction accuracy and investment strategies for stock returns,which eventually leads to the significant increase in the economic cycle fluctuations of micro-enterprises with the increase of the global systemic financial risk shock degree.Secondly,this paper uses the unbalanced panel data of 146 countries/regions from1984 to 2018 to construct a comprehensive risk index that can effectively identify global systemic financial risk shocks.And using the actual domestic economic data,the macroscopic,regional and enterprise economic cycle fluctuation index that can reflect the trend of my country’s economic operation is constructed.After carrying out the SVAR estimation of MCS small sample bias correction,it is found that global systemic financial risk has a strong explanatory power for my country’s economic cycle fluctuations,which can explain 39% of my country’s macroeconomic cycle fluctuations,23% of regional economic cycle fluctuations,and 32% of enterprise economic fluctuations.Among them,countries/regions with higher levels of economic development,higher incomes,relatively backward technological development levels,and export-oriented countries are more likely to have a systemic financial risk impact on my country’s economic variables.In addition,the research proves that if only a single risk index is used,the shock effect of global systemic financial risk will be seriously underestimated,and the explanatory power of the actual economic cycle fluctuation is significantly lower than the joint estimation of multiple risk indicators.Thirdly,because the estimation results of the impact effect show that the global systemic financial risk shock has a nonlinear impact on the fluctuation of the macroeconomic cycle,the threshold model of the large dynamic heterogeneity nonequilibrium panel of CMPR is constructed by using the transnational non-equilibrium panel data to further test the nonlinear relationship.The empirical results show that the global systemic financial risk has a non-linear impact on my country’s macroeconomic cycle fluctuations,and has the lowest risk threshold that is universally applicable in the world.When the risk level does not reach this threshold,the negative impact of global systemic financial risk will not break out,policymakers have excellent response time and buffer opportunities to deal with risk shocks;and when the risk level exceeds this threshold,global systemic financial risk shocks are enough to exacerbate my country’s economic cycle fluctuations,and this negative shock effect and threshold effect will exist for a long time.It is worth noting that there are heterogeneity thresholds for different types of global systemic financial risks,among which the threshold value of liability risk is the lowest,which has the greatest impact on my country’s macroeconomic cyclical fluctuations.Then,this paper builds a global systemic financial risk spillover network based on the FEVD method,and identifies internal spillovers,external spillovers,cross spillovers and total spillovers among different countries and different types of risks.The total spillover effect index is as high as 54.25%,which proves the network spillover effect is very significant.On this basis,a dynamic hierarchical factor model is constructed to describe the co-movement of economic variables in each province in the global systemic financial risk spillover network.The study found that the intraregional economic cycle fluctuations have the characteristics of consistency,showing a typical regional clustering,which is mainly reflected in the strong alliance and coordinated development of the more developed provinces and developed regions in the east;while the inter-regional economic cycle fluctuations are more obvious.The differentiation characteristics of the region have not yet fully formed a good pattern of regional coordinated development.In contrast,the central region has shown stronger economic growth vitality in the global systemic financial risk spillover network,and has a good late-mover advantage and a positive feedback mechanism of cyclical synergy.Finally,this paper uses the micro-enterprise level research samples from 2000 to2018 to empirically analyze the relevant externalities of global systemic financial risk spillover to the fluctuation of the micro-economic cycle,and discusses the superimposed impact effect of global systemic financial risks from the perspective of government tax policy tools.Through the construction of the enterprise risk investment decision-making and economic cycle stability model,it is found that the global systemic financial risk impact will affect the effectiveness of the government tax compensation mechanism and the tax rate mechanism,which is not conducive to the government’s stable adjustment of the micro-economic cycle fluctuations.The estimation of the CMPR model validates the short-term applicability of this inference,that is,in the medium-risk period,raising the tax rate will reduce the ability of enterprises to bear the risk spillover effect,and the positive effect of the tax compensation mechanism will weaken with the expansion of the risk spillover network.However,in the long run,the superimposed impact effect of global systemic financial risk and tax policy tools has always existed,and even if the effectiveness of the tax compensation mechanism weakens with the increase of risk spillover effects,the effective implementation of the effective tax rate and tax compensation mechanism will still help to stabilize the enterprises economic cycle fluctuations.Based on the above analysis and conclusions,this paper proposes to help build a long-term development mechanism for financial stability and economic prosperity from the following aspects: First,improve the risk mitigation and crisis emergency response mechanism to effectively stabilize macroeconomic cycle fluctuations.Adhering to the dual bottom line thinking,we pursue the comprehensiveness and accuracy of risk assessment,cherish the opportunity of financial risk shock buffer,attach importance to the coordination and cooperation of short-term and long-term goals,resolve debt risks,and prevent the heterogeneous impact of classified risks on macroeconomic fluctuations.The second is to maximize the welfare utility of risk sharing and promote the coordinated and stable development of the regional economy.Correctly handle risk spillover effects,use international resources to stabilize regional economic cycle fluctuations,take into account regional heterogeneity and homogeneity,and improve the connectivity and cooperation mechanism for regional risk defense.The third is to steadily resolve the relevant externalities of risks and actively guide the benign development of the microeconomy.Rationally use tax policy tools to resist the superimposed impact of risks on microeconomic fluctuations,clarify the core of risk prevention policies,and effectively lay a micro foundation for stable economic growth.