Research On The Influence Of Political Relations On Bilateral Trade Flows

With the development of economic globalization and the continuous improvement of the openness of all countries,diplomatic activities and political relations between countries have been given new connotations and missions,and have exerted extensive and profound influence on world economic and trade activities.On the basis of previous studies,this paper attempts to further explore the influence of political relations on bilateral trade by focusing on Chinese leaders' visits.First of all,this paper summarizes and combs relevant domestic and foreign literatures,and divides them into four categories,namely:the impact of war(or military conflict)on trade,the impact of negative political events on trade,the study based on quantitative indicators of political relations,and the impact of economic diplomacy on trade.Secondly,this paper analyses the general situation of China's foreign trade,foreign political relations and leaders' visits from the macro level,and elaborates the theoretical mechanism of the impact of politics on trade from the two aspects of political differences and political cooperation,and puts forward the hypothesis of this paper based on the investigation of Chinese leaders' visits and bilateral trade relations.Finally,based on the extended gravity model,this paper makes an empirical test of the research hypothesis using the data of diplomatic visits and bilateral trade between China and 164 trading partners from 2003 to 2017.The research results of this paper are as follows:First of all,on the whole,Chinese leaders' visits have significant trade facilitation effect.The empirical results show that a visit by Chinese leader will bring about an increase of 4.39%in total bilateral trade flows.Secondly,compared with Chinese leaders' visits from 2003 to 2012,the new Chinese leaders from 2013 to 2017 are more proactive in their diplomatic practice,with higher frequency of visits and closer ties with major trading partners.At the same time,"the Belt and Road"initiative proposed a broad space for trade promotion for Chinese leaders' visits.Therefore,the promotion of bilateral trade flows by Chinese leaders' visits during the period from 2013 to 2017 is greater than the promotion of bilateral trade flows by Chinese leaders' visits during the period from 2003 to 2012.Thirdly,compared with the Prime Minister,the President has a higher political level,greater political authority,more political resources and stronger social influence during his visits,thus establishing a more perfect incentive,promotion and protection mechanism for bilateral trade.In addition,in diplomatic practice,the President's visits are more frequent and his interaction with trading partners is closer.Therefore,the President's visits will play a greater role in promoting the total bilateral trade flows between China and its trading partners.Finally,this paper finds that Chinese leaders' visits have a three-year trade creation effect and have the greatest impact on the bilateral trade in the second year.To some extent,this paper affirms the economic role of Chinese leaders' visits and the influence of political relations on bilateral trade.Looking ahead,as China's economic interests continue to expand globally,Chinese leaders' visits will have a positive impact on bilateral trade in three aspects.Firstly,Chinese leaders' visits will promote the balanced and stable development of the relationship between the major powers and convey confidence for the development of foreign trade.Secondly,Chinese leaders' visits will promote the building of a community of human destiny and optimize the international environment for foreign trade development.Thirdly,Chinese leaders' visits will help "the Belt and Road" strategy to add momentum to the development of foreign trade.