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The effect of fluctuations in bilateral relations on trade: evidence from China and ASEAN countries

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  • Yuren Wang

    (Shenzhen University)

  • Yitao Tao

    (Shenzhen University)

Abstract

China and ASEAN have strong ties and have become each other’s largest trading partners. This article uses the gravity model and a novel method of analysis, based on massive event data provided by the Global Database of Events, Language, and Tone, to empirically analyse the impact of fluctuations in bilateral relations between China and ASEAN on bilateral trade from January 2001 to December 2020. An analysis of 1,204,126 event records concluded that the improvement of bilateral relations was beneficial for trade between China and ASEAN countries. China’s export trade was more easily influenced by bilateral relations than its import trade. Compared to the one-way behavioural attitude of ASEAN countries towards China, China’s one-way reaction to ASEAN countries had a greater impact on bilateral trade. China’s trade dependence level with most ASEAN countries maintains a trend of steady growth, and trade relations show a positive trend. Therefore, China and ASEAN should maintain stable political ties, enhance mutual understanding, strengthen economic and political connectivity, take adequate measures to promote mutual trust, continue optimizing cooperation models, and promote high-quality and high-level sustainable development across the region.

Suggested Citation

  • Yuren Wang & Yitao Tao, 2024. "The effect of fluctuations in bilateral relations on trade: evidence from China and ASEAN countries," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-13, December.
    • Handle: RePEc:pal:palcom:v:11:y:2024:i:1:d:10.1057_s41599-023-02525-w
    DOI: 10.1057/s41599-023-02525-w
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