Analysis of the Trade Potential between China and the Eight Countries in South Asia under the Background of the Belt and Road Initiative

Abstract

Abstrat: Based on the trade potential model, this paper determines the trade potential relationship between China and the eight countries in South Asia in the context of the "Belt and Road". Firstly, the panel data analysis method is used to study the overall situation of China's trade with South Asia from 2001 to 2014. Secondly, the trade gravity model is used to estimate the trade volume between China and the eight countries in South Asia. The estimated value is compared with the actual value to calculate China and the eight countries of South Asia. Trade potential value. Finally, based on the calculated potential value, the policy recommendations in the context of the "Belt and Road" are given.

A study on the belt and road initiative’s trade and its influencing factors: Evidence of China-South Asia’s panel data

“…From the perspective of Balance of Trade (BOT), China enjoy a massive surplus in the trade with South Asia for a long time. Wang & Sun (2019) study on the trade between China and 8 South Asia countries. They also find the significant imbalances of trade between China and South Asia [38].…”

“…Wang & Sun (2019) study on the trade between China and 8 South Asia countries. They also find the significant imbalances of trade between China and South Asia [38]. The proportion of China's total value of trade with South Asia to China's total value of trade shows an increasing trend, raising from 1.7% in 2004 to 3.03% in 2018.…”