A Research On The Trade Potential Of China And Paraguay Under Cooperation Of China-Latin America

The economic and trade relations between China and Latin America have a profound historical origin and cultural foundation.China and Latin American countries,both as developing countries,are important emerging economies in the world.They face similar opportunities and challenges and share common dreams and pursuits.In recent years,China Latin America relations have continued to take off.From the perspective of policy interaction and economic and trade exchanges,China Latin America relations have been substantially strengthened.As one of the largest trading countries in Latin America,Paraguay has closer and closer economic and trade relations with China.As China and Paraguay have not yet established diplomatic relations,signed any bilateral agreements,or even understood each other in a special way,the two countries still have huge trade potential and considerable space for further cooperation.In this context,it is necessary to study the trade potential of the two countries and its influencing factors.This paper concludes the relevant literature.Based on the survey of the trade between China and Paraguay,this paper introduces the time-varying stochastic frontier gravity model and trade inefficiency model,and takes the relevant data of China and 20 Latin American trade partners in 2007-2018 as the observation samples to empirically analyze the influencing factors of trade efficiency,and measures the export potential.The empirical results show that the trade efficiency of China and Paraguay is positively affected by the infrastructure and rule of law of trade partner countries and whether China signs FTA.The trade efficiency between China and Paraguay is still at a relatively low level,and the average trade efficiency has also declined in recent years,which shows that there is still a huge trade potential between China and Paraguay.Finally,this paper make conclusions and puts forward constructive suggestions for further improving the trade scale between China and Paraguay,including establishing diplomatic relations as soon as possible;establishing bilateral and multilateral economic and trade cooperation mechanisms from the government level;strengthening the cooperation between China and Paraguay in infrastructure construction;establishing the institute environment assessment system.