Abstract:

The increasing development of financial liberalization has led to the increasing linkage between international financial markets, thus laying the foundation for the international contagion of financial risks. The paper selects countries with high market relevance with China as sample countries for risk contagion from three levels of international trade, investment market and financial market, constructs financial risk indexes of China and countries along "the Belt and Road", and analyzes the contagion characteristics of financial risks between China and countries along "the Belt and Road" using BARX model. The research finds that: (1) China has financial risk contagion effect on Central Asia, West Asia and Central and Eastern Europe, while West Asia, South Asia, CIS and Southeast Asia have financial risk contagion effect on China as a whole; (2) Central Asia and Central and Eastern Europe are the main regions of China's net export of foreign financial risks, while other regions show a net import of China's financial risks; (3) There is a certain difference between the direction of transmission of financial risks to China by some countries in different regions and that of the region as a whole. In the future, we should focus on building a financial governance coordination mechanism and a financial risk contagion coordination and disposal mechanism for countries along "the Belt and Road" and strengthen information sharing with countries along "the Belt and Road" at the level of financial risk supervision, so as to effectively prevent financial risk contagion.

Key words: countries along "the Belt and Road", financial market, risk contagion, market linkage