This study explores whether the China exchange rate matter for its trading partners by using a global vector Autoregression (GVAR) model. In the GVAR model, China is treated as domestic economy while it’s trading partners like the U.S, Germany, Japan, and Pakistan are treated as foreign economies. This methodology also developed a separate bootstrapping procedure for simulation of the GVAR model, which is applied for structural stability of the parameters and for establishing bootstrap confidence bound for the impulse responses. Further generalized impulse responses are used in the GVAR for structural impulse response analysis focused on the Chinese economy, particularly responses from the trading partners of China. Moreover, our results indicate that increase in China exchange rate lower the real GDP, equity prices and real exchange rate of Germany while its impact on money supply, interest rate, and inflation are not long term. Effect on Japan macroeconomic variables such as lower the real GDP, equity prices, money supply and real exchange rate of Japan and increase the real interest rate. While its impact on the inflation rate is not affected for a long time. For Pakistan lower’s the real GDP and increase inflation rate, trade volume, and exchange rate. While its impact on real equity prices, money supply, and interest rate are not affected for a long time. US macroeconomic variables such as lowers the real equity prices, real exchange rate and interest rate and increase real GDP, inflation rate, money supply and trade volume. Impulse response indicates that the China exchange rate affects macroeconomic variables of its trading partners Supervisor:- Dr. Hafsa Hina