The "2021 International Conference on US-China Trade Disputes and Rearchitecture in Globalization", sponsored by the Center for International Finance and Economics Research (CIFER) of National Institute of Financial Research (NIFR), Tsinghua University, was held on December 4, 2021. The conference was hosted by Ju Jiandong, Director of the CIFER. 

Wei Shangjin, professor at Columbia Business School gave a keynote speech on recent study titled "Is US Soft Power a Casualty of the Trade War?".

In addition to its economic and military might, cultural communication is also one of the important means for the US to influence the world. In his keynote speech, based on his joint research with Fan Haichao, Tang Lixin and Hu Yichuan, Wei explored the relationship between the monthly revenue of US movies in Chinese cities and tariff exposure in the trade dispute, and analyzed how the trade dispute affected Chinese audiences' preferences for US movies, if there are any, and what they are. Wei and his co-authors found that despite the income effect, government effect and supply-side factors, the tariffs imposed by the US affected the Chinese audiences' interest in US movies negatively and significantly.

Wei first review the status quo of US movies in China. US movies have always played a leading role in publicizing US values and lifestyles to global audiences, and Hollywood is known as "the little State Department". The U.S. Department of Defense also provides military equipment, facilities, bases or even troops to support some of the movie shootings. There is also a large number of audiences for US movies in China. Since 2012, the revenue of US movies in China has accounted for more than 80% of the all imported movies, much higher than the trade and investment volume. Therefore, the revenue of US movies can be regarded as a proxy variable of US cultural influence on China, or US soft power (Nye Jr. 1990 and 2004).

Wei's research calculated the monthly data of Chinese theaters from 2016 to 2019, and quantified the changes in citizens' preferences for US movies in different regions according to different exposures to US tariffs. The regressions show that the US movie revenue in regions with strong tariff exposure has been significantly and negatively affected.

For another index of the change of audiences' preference, it is found that local residents had less initiative to search keywords such as "US movies" and "US tourism" on the Internet, while other foreign movies were not significantly affected in the same period, and some residents also chose to watch more Chinese movies.

The research further studies the phenomenon despite the influence of supply-side factors including import approval and distribution arrangement, and find that the results are still robust. Generally speaking, the US tariffs are considered unjust by the affected Chinese residents, which damages the soft power of the US. 

At the end of his speech, Wei also pointed out that further explorations need to be carried on subjects like how persistent is the effect, and whether it will affect the choice of colleges or schools.

Wei Shangjin, Dr. Shang-Jin Wei is N.T. Wang Professor of Chinese Business and Economy and Professor of Finance and Economics at Columbia University’s Graduate School of Business and School of International and Public Affairs. He used to serve as the Chief Economist and Director of the Economic Research and Regional Cooperation Department of the Asian Development Bank (2014-2016).