Analysis On The Trade Patterns And Trade Costs Of Chinese Commodity Trade With Countries Along "The Belt And Road"

In 2013,President Xi put forward“the Silk Road Economic Belt and the 21st-Century Maritime Silk Road Initiative",with a focus on strengthening free flow of trade between China and other countries in this region.There are many countries along the Belt and Road" "whose huge market have the vital significance to China’s trade growth in the future.Many domestic scholars have researched the problems on the international trade between China and those countries along“the Belt and Road""through qualitative analysis,focusing on trade relations,trade patterns and trade prospects.Few scholars analyzed the significance of promoting trade growth and optimizing the trade structure of China through reducing the trade costs.Nowadays,China is entering a crucial stage of promoting the initiative of“the Belt and Road".Based on the conventional research paradigm of trade costs vs.trade growth rate,this thesis extended to adopting a new perspective of trade costs vs.trade structure.Afterwards,several policy implications for promoting the initiative of"the Belt and Road”and optimizing the trade structure of China will be derived after a thorough understanding of the related effects of trade costs on trade structure.The main content of this thesis includes two sections,namely factual analysis and empirical analysis.Furthermore,the factual analysis focused on the statistical evaluations of trade scale,comparative advantage,characteristics of trade structure between China and other countries along "the Belt and Road”.The empirical analysis mainly dealt with the quantitative assessment of the bilateral trade costs.Furthermore,this thesis made a econometric test on the related effects of trade costs on trade structure on this basis.By comparison,the capital-intensive goods in China’s exports to the countries along the "Belt and Road" share a lower proportion than in China’s exports to the world.There exists the same problem in China’s import trade.We usually adopt the proportion of the capital-intensive goods in exports trade or in imports trade as the measure of whether a country’s trade structure is optimized because most high-added-value products belong to the capital-intensive goods.Using this method the capital-intensive goods share a lower proportion both in China’s exports and imports to the countries along the "Belt and Road" which mean that the trade structure between China and the "Belt and Road" should be optimized.Secondly,we found that China has different factor endowments and comparative advantage with those countries along "the Belt and Road" by analyzing the Revealed Comparative Advantage Index and Trade Complementarity Index.Compared with the countries’ exports trade to China,we also find that China’ export trade is more dependent on "the Belt and Road" through measuring Trade Intensity Index.This thesis also estimated the bilateral trade costs between China and those countries along "the Belt and Road" according to the relevant trade data.The result showed that the bilateral trade costs between China and its principal trade partners were all less than one while the bilateral trade costs between China and "the Belt and Road " were more than one.It should be noted that the bilateral trade costs between China and its principal trade partners have been a general rising trend since 2008 because of the rise of international trade protectionism after the outbreak of global financial crisis.By contrast,the bilateral trade costs between China and "the Belt and Road”are on the decline these years due to strengthening trade.On the other hand,the bilateral trade costs between China and "the Belt and Road" still have more room for further reduction.Through the analysis above,this thesis discussed that whether the reduction of the bilateral trade costs had an important influence on optimizing the trade structure between China and those countries along "the Belt and Road".The result showed that the reduction of the bilateral costs would effectively influence the export trade structure’s optimization while it could not optimize the import trade structure.In addition,the upgrading bilateral trade ties between China and those countries along"the Belt and Road" also had a important effect on optimizing China’s export trade structure.Furthermore,the countries along the "the Belt and Road" were divided into two groups according to the level of economic development.In a similar manner,we found that improving the level of economic development of China and the sample countries would have a significant impact on optimizing China’s export trade structure for well-developed economies.As far as other countries were concerned,improving the level of domestic economic development would have more significant impact on China’s export trade structure.In conclusion,this study shows that the reduction of bilateral trade costs is the significant factor in optimizing the export trade structure between China and those countries along "the Belt and Road".It is important for China to achieve interconnectivity with the countries along "the Belt and Road" which may help China expand export trade and optimize export trade structure.The initiative of "the Belt and Road" has great significance for China’s economic development in the critical transitional period.