Research On Complementarity And Potential Of Sino-British Trade

There has a long history of Sino-British trade and the relations between them developed in tortuous. Since the 1990s, the relations between China and EU become more closer, Britain as an important member of EU has been more and more closely with China. The levels of economic development between the two countries is different and there is a huge different in resource endowments, so there is a huge potential between China and Britain. Therefore, analysis the development and study the complementarities and potential of Sino-British trade has important practical significance to promote the development of Sino-British.This paper is based on qualitative and quantitative to analysis the current situation, the history and the future of Sino-British trade. Firstly, the author explains why the trade happens based on the literature and theories; Secondly, analysis the development situation, including the development process, status, positive and negative factors.Then, use the revealed comparative advantage index, trade integration index, trade complementarities index to analysis the complementarities. And further, predict the potential by ARIMA model. Finally, giving suggestions to optimize the structure of bilateral trade, promote the further development of Sino-British trade.The results of the trade complementarities suggest that there are complementarities between the two countries, it mainly based on the different of resource endowment. China’complementarities are mainly concentrated in labor-intensive products that China has comparative advantage to Britain, for example the manufactured goods and Miscellaneous manufactured articles. Britain’complementarities are mainly concentrated in capital-intensive products that Britain has comparative advantage to China, for example the chemicals and machinery and transport equipment. From this, we found that Sino-British trade has a solid foundation and a broad prospects. But the fact is that there has imbalance between the trade structure, which shows the structure remains to be optimized.By the ARIMA model shows that the future of Sino-British trade continue to stay an upward trend in 2015 and 2016, the total trade volume of 2015 will be$905 billion, and 2016 will be $1031 billion. We believe that through the effo rts of the two countries, the Sino-British trade prospects remain optimistic.