Oil Price Uncertainty and the Asymmetric Effects of Geopolitical Acts and Threats on China’s Electrical Machinery and Equipment Exports

This article investigates the effects of global geopolitical risk acts and threats on exports of key inputs, such as machinery and equipment, in China, the world leading exporter of these goods, considering the role of oil price uncertainty in this relationship. Using monthly data from January 2005 to December 2025, we employed an ordinary least squares (OLS) model and a threshold regression model to provide evidence of the nonlinear effects of the independent variables on the dependent variable. The OLS results indicate that oil price uncertainty and geopolitical risk acts have negative effects, while geopolitical risk threats have a positive effect on exports of machinery and equipment. Moreover, the results obtained from threshold regression model highlight a critical oil price uncertainty threshold, beyond which geopolitical risk acts significantly affect exports. The findings contribute to the existing literature on uncertainty and international trade by determining the heterogeneous effects of global geopolitical risk acts and threats on exports of electrical machinery and equipment and examining the resilience of these exports to uncertainty. The results suggest that realized disruptions reflected by geopolitical risk acts become damaging during periods of high oil price uncertainty.