The Influence Of Economic Freedom On China's Iron And Steel Export Trade Efficiency

Since joining the WTO,China has made remarkable achievements in trade and has become the largest exporter in the world.With the proposal of “the Belt and Road”,China actively develops economic and trade cooperation with countries along “the Belt and Road”.Between 2013 and 2019,China has expanded trade with countries along “the Belt and Road”,signed free trade agreements with many countries,and formed a free trade network with neighbors and the world.At the same time,China has strengthened production capacity cooperation,committed to converting domestic overcapacity into foreign trade and expanding iron and steel exports.In order to expand iron and steel export and improve trade efficiency,the institutional environment of importing country plays a crucial role.Economic Freedom as an important index of the institutional environment,reflects the degree of government economic intervention from four aspects: rule of law,government size,regulatory efficiency and market openness,which affects China's iron and steel export trade efficiency.Based on this,from theoretical and empirical aspects,the article analyzes the influence of Economic Freedom on China's iron and steel export trade efficiency,and puts forward the corresponding policy suggestions,which have important theoretical and practical significance to improve China's iron and steel export trade efficiency.On the basis of existing literature,this paper firstly analyzes the influence of Economic Freedom on trade efficiency from the theoretical mechanism by four functional ways,which are rule of law,government size,regulatory efficiency and market openness.After that,this paper construct the stochastic frontier trade gravity model to measure trade efficiency and draw the conclusions: the population and per capita GDP of the importing country,per capita GDP of China and whether there is a border between China and the importing country have a positive impact on China's iron and steel export,while the population of China,the distance between China and the importing country and whether the importing country is a land-locked country have a negative impact on China's iron and steel export.Then,the article use “one-step” method to construct trade efficiency model and study the influence of Economic Freedom on iron and steel export efficiency.The empirical results show that Economic Freedom has a positive impact on China's iron and steel export efficiency,but its influence direction is different from different countries,the Economic Freedom of higher income countries and European countries have a significant negative impact on trade efficiency,while the Economic Freedom of lower income countries and Asian countries have a significant positive impact on trade efficiency.Finally,the article put 10 major indicators of Economic Freedom into the model according to their respective 4 fields,the conclusions are as follows: government size and market openness have a positive impact on China's iron and steel export trade efficiency,and rule of law has a negative impact,while the impact of regulatory efficiency is unclear.Based on the empirical results,the following policy suggestions are put forward.Firstly,China should build free trade zones with the countries along “the Belt and Road” to achieve complementary advantages,by this way,trade resistance between countries can be reduced and trade efficiency can be improved.Secondly,we should discuss investment projects to achieve mutual benefit and win-win.The iron and steel trade between China and the countries along “the Belt and Road” will be promoted by expanding iron and steel project cooperation and increasing relative investment.Thirdly,both China and the countries along “the Belt and Road” should jointly build infrastructure to achieve connectivity.We should use our advanced technologies to help countries along “the Belt and Road”with their communication and transportation infrastructure to improve trade efficiency.