Bilateral Trade Cost Between China And The Countries Along "One Belt And One Road"

With the further development of the international division of labor, the importance of trade cost has become increasingly prominent. Just as Novy said, "Today, trade cost remains the major obstacle to economic globalization". At present, China is building a new system of trade transportation and international division of labor through "one belt and one road", therefore study on the bilateral trade cost between China and the major countries along "one belt and one road" has a significant impact on the bilateral trade division of labor and economic development.Based on the analysis of economy and trade relationship between China and the major countries along "one belt and one road", this paper uses Novy (2013) improved gravity model to measure and analyze the bilateral trade cost and its changes between China and the major countries along "one belt and one road" from 2001 to 2014. The results show that the bilateral trade cost showed a downward trend over time, which dropped by 21.86% from 2001 to 2014, and the bilateral trade cost between China and Vietnam, Iran, India fell by a big margin, respectively, compared with 2001, decreased by 46.14%,40.62%,30.02%. Subsequently, on the basis of the trade cost model, this paper carries on the decomposition to bilateral trade growth, and find that revenue growth and bilateral trade costs decline are the main reasons for the growth of bilateral trade between China and the major countries along "one belt and one road", and the contribution rates are 87.78% and 44.73% respectively. However, due to the impact of multilateral resistance decreased, the contributions of revenue growth and trade cost reduction have been weakened to some extent. Then, referring to the traditional gravity model, this paper builds the regression equation, and uses Statal2.1 software and stepwise regression method to research on the influence factors of trade cost. The results show that distance has a positive effect on the trade cost, while per capita GDP gap, trade dependency, common border, common language and free trade agreement will help decrease the trade cost, among which, trade dependency’s impact to trade cost reduction is the largest. Finally, get policy enlightenments on the basis of statistical analysis and empirical research.