Systemic Risk Transmission and Stratified Resilience in China’s Banking Sector under Trade Frictions: Evidence from Executive Interviews across Different Types of Banks
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Keywords
trade war, systemic risk, banking, qualitative interviews
Abstract
Since 2018, the China–U.S. trade war has become a major source of uncertainty in the global economy and has also had significant implications for China’s financial system. This paper examines how the spillover effects of the trade war translate into systemic risk within the banking sector, with particular attention to the heterogeneous responses of banks of different sizes and ownership structures. Based on in-depth interviews with senior executives from large state-owned banks, national joint-stock banks, and small local banks, this study applies thematic analysis to identify two main transmission channels through which external economic shocks affect banks, including disruptions in export-related demand and client repayment capacity. The findings suggest that large state-owned banks are relatively less exposed due to their diversified client base and stronger risk-buffering capacity, whereas local banks face more pronounced credit risk pressures, largely driven by their concentrated sector exposure and more limited access to stabilizing financial instruments during periods of stress.
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