The Study On The Bilateral Goods Trade Potential Between China And Cambodia Under The Framework Of CAFTA

From the signing of “The Framework agreement on comprehensive economic co-operation between the People’s Republic of China and the Association of Southeast Asian Nation" in November 4th 2002,the China and ASEAN Free Trade area was officially launched in January 1st 2010.After established,there are 11 countries,with a population of 1.9 billion and a GDP of US $6 trillion in the China and ASEAN Free Trade area.It is the most populous free trade area in the world and the largest free trade area among developing countries.China and ASEAN countries have a good foundation for the establishment of free trade zone.First,the mountains and rivers are connected and are closely related;second,resource endowments have its own advantages and great potential for cooperation;third,there is a broad common language and common interests in international social affairs and a common desire for stability and growth in economic development.Cambodia is located in the hinterland of the Indo-china Peninsula and is an important transportation hub in Southeast Asia.As one of the ASEAN countries,the trade volume between China and Cambodia grew steadily,but the volume of trade between China and Cambodia is still relatively small.And China’s trade with Cambodia has kept a high surplus for a long time.Therefore,the in-depth analysis of the development of Sino-Cambodian trade has certain significance for promoting the development of Sino-Cambodian trade.Firstly,this paper will take the bilateral trade flow between China and Cambodia as the analysis object.It analyzes the current trade situation between China and Cambodia from 2002 to 2016.Making a comprehensively and systematically analysis from below four areas: the trade development course between China and Cambodia;the comparative analysis of the total volume and growth rate of trade between China and Cambodia;the trade dependence and trade structure between China and Cambodia.It is believed that the goods total volume of bilateral trade between China and Cambodia is rising and the products exported from Cambodia to China aregradually shifting from raw materials to industrial manufactured goods.China’s main exports to Cambodia are also gradually shifting from raw materials to finished goods.Secondly,we will take empirical analysis on the goods trade potential between China and Cambodia.At present,there are two main research methods for measuring trade potential,exponential analysis and gravity model regression.By comparison,the gravity model not only has the characteristics of simple operation and convenient data processing,but also can analyze the influence of relevant factors on the trade potential,so it is widely used.Therefore,this paper uses the trade gravity model to estimate and analyze the potential of bilateral goods trade between China and Cambodia.In the selection of data samples,if only select the data of China and Cambodia,the data samples are too small,so this paper studies the sample data of ASEAN countries and China to analyze.Using the panel data from 2002 to 2016 to analyze the main factors affecting bilateral trade flows between China and Cambodia based on the trade gravity model to build a gravity model by selecting operational analysis variant for GDP per capita and actual GDP of China and China’s trade dependence on ASEAN,ASEAN’s trade dependence on China,and the distance between China and the capitals of ASEAN countries,and a virtual variable for ASEAN partners as a developed country.The results of multivariate linear regression are compared by using Eviews7 software under the random influence model and the fixed influence model,and the Hausman test is used and the model is adjusted continuously.The optimal gravitation model equation is obtained by deleting the variables which are inconsistent and not significant with the expected sign one by one until all the variables are significant.Because the trade gravity model has the function of measuring the trade flow,we can judge whether the bilateral trade in goods between China and Cambodia has the trade potential.That is,the actual trade flows between China and Cambodia are compared with the theoretical trade flows between China and Cambodia based on the trade gravity model to judge the trade potential between China and Cambodia.By studying the trade gravity model equation and substituting the corresponding data intothe equation,the potential of bilateral trade in goods between China and Cambodia is measured.Analysis shows that China and Cambodia belong to the largest potential,indicating that its trade potential has not been fully exploited,resulting in a waste of resources.China and Cambodia trade development still has improvement room.In order to explore the potential of trade in goods between China and Cambodia,this paper proposed the corresponding countermeasures and suggestions to further promote the development of bilateral trade potential of goods between China and Cambodia based on the conclusions of previous studies from the national level and the enterprise level respectively.The countermeasures are put forward at the national level include strengthening political and cultural exchanges,consolidating friendship,strengthening complementary products and import and export optimizing products structure,accelerating interconnection construction,strengthening infrastructure development and cooperation,enhancing productive capacity,rapid economic growth and promotion of RMB internationalization to develop cross-border RMB trade settlement business;The enterprises are the implementers of optimizing the export structure,and the optimization of the industrial structure depends on the enterprises in the end.Therefore,the countermeasures are put forward on the enterprise level include cultivating and developing high quality products,creating the brand image of the enterprises and actively developing the emerging products to promote the re-development of trade between China and Cambodia.