New Options For Foreign Trade Under Geopolitical Risks

In recent years,geopolitical risks have become an important factor hindering global economic recovery,and these geopolitical events will not only occur frequently at this age,but may become a long-term trend.Geopolitical risks will have an impact on international investment and foreign exchange policies through their behavior and threats,as well as factors such as international capital flows,thereby increasing the sunk costs of transactions,and forcing governments,import and export enterprises and traders to adjust their currency and trade policies,thus affecting global trade flows.We can see from the recent statistics released by China Customs that the development trend of cross-border e-commerce in China in the first half of this year is positive and rapid,and the new barter trade is a new way of trade,using digitalization,block chain and other modern information technology means,can reduce trade costs and exchange losses,broaden the trade channels between countries,avoid exchange rate risks,help enterprises to multi-finance,and effectively promote global economic cycle.In view of this,this paper tries to explore a new way of thinking about foreign trade in today’s global geopolitical risk environment,i.e.,a new type of barter trade.It also explores its relationship with traditional trade as well as new barter trade by adopting new geopolitical risk indicators from a geopolitical perspective.Firstly,based on the research results of domestic and foreign literature,the impact of geopolitical risk on traditional trade and barter trade is analyzed and summarized to determine the research direction of this paper.Next,the research significance of this paper is derived based on methods such as theoretical analysis and empirical research,and then combined with the current domestic and international political and economic situation.Then the basic concepts of geopolitics and geopolitical index are introduced,and the process of constructing and improving the index is dissected to explain how global political relations affect international trade economy and investment.Next,panel data on net barter trade index for 41 countries and bilateral trade volume and geopolitical index between these 41 countries and 203 trading partners worldwide during 2000-2020 are cited,and then substituted into the econometric model for fixed effects estimation regression to empirically test the relationship between geopolitical risk and traditional trade as well as new barter trade,respectively.The results of the study show that the empirical analysis yields conclusions that are generally consistent with the theoretical analysis and the hypothesis that an increase in geopolitical risk has a negative effect on a country’s foreign trade in traditional trade,while it has a positive relationship on the development of new barter trade.Due to the existence of factors that may influence each other,some new variable interaction terms are added to the above model to ensure the robustness of the baseline regression.Finally,the paper draws conclusions based on the theoretical mechanism and empirical analysis,and proposes suggestions and countermeasures to improve global political and economic relations and improve the new barter model according to the new characteristics of the current political and economic situation.