| China and the Gulf Cooperation Council(GCC)countries are located at far ends of the Asian continent.However,the rapid growth of bilateral trade over the past decade has played a positive role in promoting their respective development and strategic cooperation.With the further docking “One belt One road”,the bilateral cooperation in energy,transportation,communication infrastructures,industrial manufacturing and high technology has deepened,providing new opportunities for further promoting bilateral economic and trade exchanges.At the same time,it should also be noted that the internal and external environment of the Middle East region,where the member states of the GCC are located,is complex.Great differences among China and the member states are also present in the level of historical,cultural and economic development.How to promote the sustainable and healthy development of bilateral economic and trade cooperation is the issue of the current times faced by both sides.Therefore,based on the systematic sorting of the economic and trade cooperation between China and the countries of the GCC from 2010 to 2020,this paper adopts the extended gravity model to deeply analyze the key political and economic factors affecting the bilateral economic and trade exchanges.The independent variables of the model are the population of GCC member states,economic distance from China,internal political stability,actual exchange rate and the proportion of trade in GDP,whereas the dependent variables are bilateral trade,imports and exports.Based on the existing literature on gravity model and bilateral relations we hypothesize unstable political stability of trading parties will reduce bilateral trade of China-GCC cooperation.Furthermore,considering trade agreements in most cases intensify the exchange,trade restrictions on international economic transactions and political instability reduce bilateral trade.As historical presentation and examination of ties under the Belt and Road Initiative(BRI)is an integral part of this research,the assumption is made that the BRI is a catalyst for Chinese investment,with sponsored production technologies increasing the provision and exchange of goods and services between China and GULF countries.Therefore,bilateral trade increases economic exchange and generates commercial and developmental opportunities through joint effort under the BRI.Finally,the economic relationship focusing on trade,infrastructural development,investment and technology will intensify the bilateral trade between China and GCC countries.The research explains the potential and emphasizes the importance of prospective advancements made possible by BRI.Main features conducive to bilateral trade expansion in the specific context of China-GCC relations entail political and economic stability,energy,access to energy resources,technology and investment.Therefore,the study focused specifically on how these factors are being standardized and regulated through the ongoing resolution and accommodation under the mutually beneficial diplomacy of Belt and Road Initiative.Furthermore,to assess commercial interests and examine the intensity of trade exchange we used proxies suggested by the augmented gravity model to track changes over time in the import and export volume among parties.The regression analysis of panel least square method and generalized moment method shows that there is a significant positive correlation between bilateral trade,population and actual effective exchange rate,and a negative correlation with economic distance.The sustainable trading volume continues to grow with the advancement in technological infrastructure.The domestic political stability of GCC member states and implementation of trade agreement also has a significant impact on bilateral trade as it allows for further diplomacy with regard to openness to trade,tariffs standardization,cooperation in technology,and investment in oil and chemical industry-related projects.The percentage of trade in GDP also has impact significantly.Conversely,there is a significant negative correlation between economic distance and bilateral trade and import volume.Based on the above research conclusions,this paper puts forward suggestions on further deepening the trade cooperation between GCC countries and China to achieve common prosperity.For GCC countries,increase investment in industrial development,which will introduce side resources supply for industrial development,support infrastructure investment and promote the improvement of transportation system,vigorously promote technical education to strengthen production industry and improve the quality of export and technical education,expanding economic and trade cooperation agreements and economic diversification will help promote trade flows and other economic negotiations,create new trade models and enhance commercial relations.For the Chinese government,it supports the stability in the Gulf countries and regions,provides more opportunities for GCC investment in China,assists GCC member states increase energy production,upgrade to more advanced scientific and technological levels,build more convenient facilities,and promote the construction of China-GCC free trade zone as soon as possible.Through the above cooperation,both sides are able to achieve common prosperity.The research results of this dissertation have exploratory significance for strengthening the relationship between China and the Gulf countries and solving some of the existing obstacles hindering better cooperation between the two regions to some extent.The main contribution is to provide recommendations for improvement and optimization bilateral trade based upon a qualitative study and supported them by existing empirical evidence. |
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