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China’s Trade and Opening since 1978: A Regional Perspective from the Northeast

In: Institutional Change and China Capitalism Frontier of Cliometrics and its Application to China

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  • Kiril Tochkov

Abstract

China’s rapid growth has masked the fact that some of its regions have failed to keep up with the modernization and efficiency drive during the market transition. China’s Northeast was once the most prosperous part of the country and a model for socialist industrialization efforts. But since the reforms and opening up, the region has struggled to turn its old industrial base into a vibrant economy. Trade represents a possible channel for stimulating economic growth, especially in border regions. Accordingly, this chapter explores the trade patterns of Heilongjiang, a border province in the Northeast, and uses a gravity model to estimate the trade costs vis-à-vis its major trading partners, and Russia in particular, over the period 1978–2017. The results indicate a profound change from a relatively isolated border region into a more open economy over the sample period. Moreover, Heilongjiang exhibits a home bias, trading with the rest of China more intensively than with any other country. The border effects with Russia are substantial, although they have declined somewhat over the past two decades. Other trading partners in Northeast Asia record lower trade costs than Russia overall, but the barriers seem to have been on the rise since the early 2000s. The discussion of the potential factors contributing to the high border effects of Heilongjiang points to the lacking infrastructure, especially the cross-border infrastructure with Russia and the costly access to seaports, as the main culprit.

Suggested Citation

  • Kiril Tochkov, 2022. "China’s Trade and Opening since 1978: A Regional Perspective from the Northeast," World Scientific Book Chapters, in: Antoine Le Riche & Antoine Parent & Lei Zhang (ed.), Institutional Change and China Capitalism Frontier of Cliometrics and its Application to China, chapter 5, pages 89-107, World Scientific Publishing Co. Pte. Ltd..
  • Handle: RePEc:wsi:wschap:9781800611238_0005
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    More about this item

    Keywords

    China; Macroeconomics; Cliometrics; Institutional Economics; Complexity; Economics; International Trade; Applied Econometrics; Econometrics; Empirical Finance; Behavioral Finance; Economic History; Sociology; Gender Studies;
    All these keywords.

    JEL classification:

    • P1 - Political Economy and Comparative Economic Systems - - Capitalist Economies
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • F10 - International Economics - - Trade - - - General
    • B2 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925
    • B1 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925
    • F15 - International Economics - - Trade - - - Economic Integration

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