The role of Chinese panda ambassadors in international trade

This paper examines the impact of China's panda diplomacy-the practice of loaning giant pandas to foreign countries-on international trade, which prior literature has shown to be responsive to soft power influences. We investigate whether hosting giant pandas strengthens a country's trade relations with China, particularly in years when a panda cub is born, as these animals serve as symbolic ambassadors that foster diplomatic and economic ties among the countries, while supporting China's commitment to giant pandas conservation. To explore this, we construct a novel dataset tracking the movement of pandas as part of Chinas diplomatic initiatives and apply an augmented gravity model of trade using both annual and monthly data from UN-Comtrade. Our analysis reveals that countries hosting giant pandas experience a significant increase in exports to China between 5.9% and 7.2% in the year when a panda cub is born. This effect is short-lived, persisting up to four months after the cubs highly publicized 100-day naming ceremony. The impact is concentrated in specific sectors, including food and live animals, crude materials, and machinery.