Research on the Risk Spillover Effect of China\'s Financial Market under the COVID-19 Shock

• 1、College of Finance and Statistics,Hunan University, Changsha 410006

Abstract：Since 2020, the COVID-19 has been wreaking havoc over the world, causingviolent fluctuations in the financial markets of countries around the world. China\'s financial market is the first to bear the brunt, and it has become a toppriority to prevent and resolve China\'s financial risks under the the COVID-19 shock.Therefore, it is of great significance to research the risk spillover effect of China\'s financial market in the influence of epidemic. The paperconstructed the risk spillover index with advanced network topologic analysis method to explore the path, direction and strength of risk spillover in China\'s financial market under the impact of the COVID-19 from the perspective of combining theory and empirical analysis. The results show that: First, China\'s financial market is generally stable under normal conditions, in which the stock and real estate markets are the key markets in in the risk transmission of China\'s financial market.Second, after the outbreak of the COVID-19, the overall risk spillover in China\'s financial markets increased significantly. At the same time, the risk spillover and risk influx in various markets have sharply increased.Third, after the gradual alleviation of the domestic epidemic, the overall risk spillover of the marketgradually decreased, in which the recovery of currency market and gold market was relatively rapid.However, the recovery of the stock market, agricultural products market and energy market was relatively slow.In addtion, the basic metal market showed a certain degree of vulnerability.Finally, according to the conclusions, the paper puts forward risk prevention measures and policy recommendations that will be conducive to maintaining the safety and stability of China\'s financial market.

Keywords： COVID-19 Financial Market Risk Spillover Effect Network Topology Analysis