China Trade: The ‘Dalai Lama Effect’

Researchers have quantified the economic impact of world leaders meeting with the Dalai Lama despite China’s disapproval. From CNN:

Called the “Dalai Lama Effect,” the study by the University of Gottingen in Germany found the negative impact on exports began when President Hu Jintao took office in 2002.

The study is the first empirical analysis demonstrating the economic consequence of such meetings. Machinery and transportation equipment exports suffered the most consistent negative impact, following meetings with the 14th Dalai Lama, according to study authors Andreas Fuchs and Nils-Hendrik.

“We wanted to find out the impact of the rising role of China in the world … to find out what we should expect of China’s role in the world in the coming years,” researcher Fuchs told CNN. “It is clear that politics has played a huge role in China’s commercial relationships.”

China says it opposes politicizing trade and economic ties. However, prior to each of the Dalai Lama’s meetings with leaders, the Chinese government often openly threatens that such meetings will lead to damaged trade relations with China.

The research report, “Paying a Visit: The Dalai Lama Effect on International Trade,” can be downloaded here. See also “How much does hosting the Dalai Lama hurt your country’s trade with China?” from the Foreign Policy blog.

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