This paper investigates China's import demand elasticities using HS 8-digit customs data from January 2019 to March 2021. The study finds that both direct bilateral exchange rate elasticity and third-country exchange rate elasticity are influenced by Asian economies' pandemic-alleviating policies and exporter market concentration. Economic support policies lower bilateral exchange rate elasticity, potentially changing its sign, and increase exporter resilience to foreign competition. Conversely, high market concentration lowers bilateral exchange rate elasticity but amplifies the impact of competitor currency depreciation. These findings are robust across various trade modes, regions, products, policy measures, and datasets.

Weikang Zhang, Isabel K. M. Yan, Yin-Wong Cheung