Abstract

As strong mutual dependence exists between the Chinese and international waste paper markets, changes in one market will inevitably affect both markets. The purpose of this study is to investigate the impacts of China’s newly implemented waste paper import restrictive policies on the price cycles of the Chinese and international waste paper markets and on the relationship between them. The results of the wavelet analysis and cointegration test based on the ARDL model revealed that the price cycles of the Chinese and international waste paper markets are synchronized in both periodicity and amplitude, but the degree of the synchronization relationship varies across time and frequencies along with China’s newly implemented policies. These policies have broken the price cycle synchronization between the two markets and led to ineffective resource allocations and more fluctuations in both markets, threatening the stable development of the Chinese paper industry and the international recycling industry.