The Rise of China: Prospects of Regional Trade Policy

Abraham, Filip; Hove, Jan Van

doi:10.1007/s10290-005-0040-x

Cited by 30 publications

(18 citation statements)

References 24 publications

(26 reference statements)

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“…From this result, they suggested that a reduction on exchange rate risk may occur if the global transactions of multinational firms increase. The finding about ASEAN participation is opposite with the result of Abraham and Hove (2005). These authors found that being ASEAN members, their bilateral trade would increase.…”

Section: Literature Reviewcontrasting

confidence: 54%

“…Common language and population size contribute to the increase in trade. However, unlike Abbas and Waheed (2015), Abraham and Hove (2005) found insignificant impact of exchange rate variable. Surprisingly, joining ASEAN and APEC did not much contribute to the export flow for the region, whereas the export flow mainly depends on growth, trade barriers and common languages.…”

Section: Literature Reviewmentioning

confidence: 70%

“…Cambodia exported the majority of agricultural products, which was believed to cost more for transportation due to the weight, size and damage risk if those products were on the way for a long time. Unlike Abraham and Hove (2005) but similar to Abbas and Waheed (2015), Huo and Kakinaka (2007) find the negative impact of exchange rate volatility on trade. They explained that the exchange rate volatility may create trade discouraging risk and uncertainty of potential profit.…”

Section: Literature Reviewmentioning

confidence: 96%

“…The economic growth rate is employed to provide a good proxy for the economy expansion, accompanied with the increase in demand on import, the expansion oneconomy is also due to the contribution of export supply. This approach is similar to Abraham and Hove (2005) who used the economic growth instead of the GDP value. We expected our estimated coefficients of this variable will be positive.…”

Section: Methodology and Datamentioning

confidence: 99%

“…Working on the whole Chinese situation, Abraham and Hove (2005) did a study to identify which trade agreement China should participate and applied a gravity equation for 23 Asia-Pacific countries between 1992 and 2000. These authors found that GDP growth of import countries and export countries (separately examined) create a positive impact on export flows, whereas both distance (absolute value) variable and the scaled distance (used as weight ratio) variable shows the negative impact on export.…”

Section: Literature Reviewmentioning

confidence: 99%

See 4 more Smart Citations

Evaluation of the Trade Relationship Between Vietnam and China; Vietnam and United States: A Comparison Using Gravity Model

Dinh¹

2017

EJEF

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This study aims to evaluate the determinants of trade relationship between two largest trading partners of Vietnam, United States and China. Using gravity model for time series data from 1986 to 2015, the study found that economic growth rate plays a crucial role in stimulating the trade flow. Both trade relationships fit with the practical approach of Heckscher-Ohlin theory, stating that trade flow increases between countries with different income levels. The most important finding of this study lines on the results regarding the impact of trade agreements. While United States-Vietnam bilateral agreement creates trade, the trade agreement between ASEAN and China produced trade diversion. As China expands its markets among ASEAN countries, Vietnam should diversify its export markets to improve its export flow.

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Section: Literature Reviewcontrasting

confidence: 54%

Section: Literature Reviewmentioning

confidence: 70%

Section: Literature Reviewmentioning

confidence: 96%

Section: Methodology and Datamentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

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Evaluation of the Trade Relationship Between Vietnam and China; Vietnam and United States: A Comparison Using Gravity Model

Dinh¹

2017

EJEF

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Evaluating China’s Integration in World Trade with a Gravity Model Based Benchmark

Bussière

Schnatz

2007

Open Econ Rev

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Conclusions 26References 28 Data Sources 31Chart appendix 32 Non-technical summary China's reform process towards a market-based economy has triggered a significant reorientation of international trade flows. China has indeed experienced very quick trade integration into world markets as exemplified by a strong increase in its share in world trade. As the world is taking the full measure of this phenomenon, tensions have emerged in the political and economic sphere. In particular, the emergence of China was perceived to affect the competitiveness and the employment situation in mature economies. Without a quantifiable benchmark, such claims are difficult to judge; however, to our knowledge, such quantification has never been attempted.The aim of the present paper is to fill in this gap and to contribute to the policy debate by providing an empirical assessment of China's "natural" place in the world economy. Building on a companion study (see Bussière, Fidrmuc and Schnatz (2005)), we use a gravity model to shed light on the overall degree of trade intensity of a large number of countries as well as the depth of bilateral trade linkages of China with major economies. Our gravity model employs a very large dataset of bilateral trade flows including more than sixty trading partners over more than twenty years. In the standard regression this amounts to more than 3,500 bilateral trade relationships and almost 53,000 observations. The model is estimated in a two-step panel data framework -as advocated by Cheng and Wall (2005) -which takes country heterogeneity properly into account.The estimates are plausible and robust to different estimators and samples. Moreover, they are able to capture most of the variation in bilateral trade flows, both across countries and over time.The new measure of multilateral trade integration is based on the part of the fixed effects which are orthogonal to available time-invariant variables in the second step regression. It constitutes a better measure of trade integration than standard variables such as the share in world trade or the ratio of exports and imports to GDP, because it incorporates many more factors. Accordingly, it is more appropriate as a benchmark for examining whether China's share in international trade is consistent with economic fundamentals.The paper suggests that the rise in trade flows between China and its trading partners should not, per se, come as a surprise. China's shift towards more market-oriented policies together with robust economic growth was instrumental for the reorientation and deepening of trade linkages.At the same time, we find that China -given its size and location -is already well integrated into the world economy, which contrasts with the experience of other transition countries with a planned-economy history in Central and Eastern Europe. In more detail, the new indicators of trade intensity suggest that China displays a higher degree of global trade integration than many other industrialised countries or Asian trading partners. However, ou...

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Trade Blocs

Brouwer¹,

Kohl²

2020

International Encyclopedia of Human Geography

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The Rise of China: Prospects of Regional Trade Policy

Abstract: Economic integration, trade forecasting and simulation, gravity model, China,

Cited by 30 publications

References 24 publications

Evaluation of the Trade Relationship Between Vietnam and China; Vietnam and United States: A Comparison Using Gravity Model

Evaluation of the Trade Relationship Between Vietnam and China; Vietnam and United States: A Comparison Using Gravity Model

Evaluating China’s Integration in World Trade with a Gravity Model Based Benchmark

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