Study On Trade Potential Between China And The Five Central Asian Countries

To cope with the worldwide economic transformation and build up Asia-Europe regional economic integration,president Jinping Xi put forward the strategic plan of the co-construction of the Belt and Road Initiation in October,2013.Benefited by the geographic advantage and the complementarities of natural resources,the five Central Asian countries hold an important role as a fortress on the way from China to the east Europe.And the trade level between China and the five Central Asian countries plays a fundamental role in the Asia-Europe regional economic development.So,the following questions have aroused wide interests,such as how is the trade potential of China and the five Central Asian countries,what are the obstacles affecting the potential,and how to lower the barriers to reach the full potential.Recently,the governments and agencies along the Belt and Road have hold a series of heated discussion on how to improve the business environment and lower the trade barriers through policyBased on the trade flows of China and the five Central Asian countries in2007-2017,this paper attempts to do exploration in three aspects: First,from the internal logic,this paper probes into the comparative advantages and the industrial division differences between China and the five Central Asian countries,to provide theoretical analysis basis for expanding the trade potential of both parties;secondly,this paper conducts comprehensive statistical analysis of the trade status,product structures and trade policies of both parties to provide data foundation for the following empirical research;Third,this paper applies the stochastic frontal gravity model to measure the trade potential between China and the five Central Asian countries,and the natural and influential factors of trade between them as well.The research shows that: First,the current trade cooperation between China and the five Central Asian countries can well prove the practical application of the Heckscher-Ohlin theory,and verify that China and the five Central Asian countries have strong trade complementarities,and the bilateral trade happens more in the intra-industry trade with complementarities.Second,the average trade efficiency between China and the five Central Asian countries is 0.56.The trade efficiency rate of Tajikistan and Kazakhstan are above average,and the one of Turkmenistan is equal to the average,the rate of Ukrainian and Kyrgyz countries come below of it.As awhole,the large trade potential is yet to be developed.Third,among the natural factors affecting trade potential and efficiency,the absolute value of the economic aggregate,population size and per capita GDP all have positive impact,but trade distance is still an important part of trade costs.Among the factors affecting trade inefficiency,the government policy system factors,trade facilitation factors and regional integration factors all pass the 1% significance check,and the regional integration factor has the highest degree of influence.Fourth,based on theoretical analysis and empirical research,this paper proposes that China and the five Central Asian countries should further expand the scope of trade areas and apply trade facilitation measures;accelerate the construction speed of China-Central Asia Free Trade Zone;deepen energy cooperation,and innovate cooperation modes and areas;strengthen infrastructure construction cooperation,standardize regional transportation facilitation policies;treat trade potentials of different countries differently,optimize cooperated industrial structure;coordinate national relations and stabilize strategic layout;strengthen mutual trust and stabilize trade environment.By accelerating the release of trade potential,the regional economy will be boosted and the strategic layout could be stabled.