Anti-Epidemic Policies, FTA Digital Trade Rules, and China's Digital Product Exports

Abstract

This paper investigates the interactiveness of digital trade rules and anti-epidemic policies on China's digital product export. Using monthly data across 241 products from 187 countries from January 2018 to December 2021, the authors find that adopting stringent anti-epidemic policies improves the value and quantity of digital trade in the presence of digital trade rules. And that the lack of face-to-face communication due to these policy restrictions is the primary cause of the stimulated digital product exports, with consumer privacy protection and non-discrimination terms playing essential roles, especially for digital consumer products. Independently, digital trade rules have an insignificant impact on China's digital product exports. However, when China's trade partner adopts more stringent anti-epidemic policies, digital trade rules improve the value and quantity of trade while reducing investigative time and sunk costs associated with digital trade.