Trade Disruption And Trade Diversion Effects In The Sino-US Political Conflic

With the development of economic globalization and political multi-polarization,the influence factors of bilateral trade relations among countries are not only limited to the economic field,but are increasingly affected by more and more complex factors,among them,the influence of political factors on bilateral trade relations has been increasing.As an important component of political factors,the impact of political conflict on bilateral trade has attracted more and more attention of relevant scholars.Most studies on the impact of political conflicts on trade from the traditional perspective focus on the impact of political conflicts such as war and military conflicts on trade,and most of the existing literature focuses on the impact of regional political conflicts on trade,such as US-France,US-Japan,China-Japan,China-South Korea,China-Europe and ASEAN.Few literatures take China and the United States as the main body of analysis to study the impact of Sino-US political relations on bilateral trade.At the same time,the impact of political relations on bilateral trade can be positive or negative,and the existing literature,when studying the impact on trade,is either biased towards the impact study of the total trade,or biased towards the impact study of the sub-sectors,less literature has combined the two for analysis.Based on the existing research literature,this paper regards political conflict as a collection of a series of political events or political behaviors,and uses continuous political relationship indicators to represent Sino-US political conflicts based on the political relationship score table of the GDELT database.In view of the fact that China and the United States are the two largest economies in the world,although no large-scale military conflicts or wars have broken out,Sino-US relations have been in ups and downs since the establishment of diplomatic relations.Any changes in SinoUS relations will have major impact on third countries and even the world.Therefore,this paper takes the impact of Sino-US political conflicts on bilateral export trade as the research subject.When analyzing the trade destruction and trade diversion effect of Sino-US political conflict,this paper takes the extended trade gravity model as the theoretical basis,takes 2001 as the time node,selects the annual data of 195 countries(regions)from 2001 to 2020 as the panel data,and at the same time,combines the political relationship index of GDELT database to empirically analyze the trade destruction and trade diversion effect of Sino-US political conflict with STATA15.Due to the differentiation of the effects of political conflict on aggregate trade and sub-industry trade,this paper first analyzes the trade disruption and trade diversion effects of aggregate trade,and then analyzes the trade disruption effects on different industries to clarify the heterogeneity of the effects of Sino-US political conflict on different industries.After using the trade gravity model and combining STATA15 for regression analysis,this paper mainly draws the following conclusions:First,as far as the overall trade is concerned,the political conflict between China and the United States has a significant trade destructive effect.Political conflicts initiated by trade source countries and political conflicts initiated by trade destination countries have significant negative effects on export trade volume.Second,as far as the overall trade is concerned,the political conflict between China and the United States has not produced the expected trade diversion effect.The overall trade transfer effect of Sino-US political conflict is not obvious,which may be attributed to the strong economic interdependence between China and the United States,the low intensity of Sino-US political conflict,the high cost of Sino-US trade transfer and the fact that Sino-US trade is not a pure market behavior.Third,the trade disruption effects of Sino-US political conflicts on different industries are heterogeneous.Compared with the overall effect,the biggest difference of the destructive effect of political conflict on the trade of different industries is that the political conflict initiated by the importing countries has no significant negative effect on the export trade of the exporting countries,which may be attributed to the influence of trade inertia,sunk cost and consumption habits,and the importing countries are unwilling or unable to change the source countries of import trade in a short time.The political conflicts initiated by trade source countries mainly have a significant negative impact on eight kinds of export products.These eight categories of products are respectively the sixth category of chemical products;class 7 plastics and their products and rubber and their products;the 13 th category stone,ceramics,glass and its products;the 15 th category is base metal and its products;category 16 mechanical products;category 17 transportation equipment;the 18 th category instruments and equipment;category 20 miscellaneous products.Among them,the most affected is the 16 th category of mechanical products.The bilateral export trade volume between China and the United States is inconsistent with the trade destructive effect predicted by the trade gravity model.This contradiction may be due to the complementary industrial structure between China and the United States,the close economic ties between China and the United States,the sunk cost effect,the trade expectation theory,the focal point theory,the influence of government policies and the changes in the world economic environment.The inconsistency between the empirical analysis results of the trade gravity model and the reality of bilateral trade between China and the United States does not mean the failure of the trade gravity model,but reflects the complexity of economic ties between China and the United States and the multiplicity of influencing factors of bilateral trade.