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A New Perspective On China Trade Growth: Application Of A New Index Of Bilateral Trade Intensity

Author

Listed:
  • Christopher Edmonds

    (University of Hawaii at Manoa, CTAHR, Center on the Family)

  • Yao Li

    (College of Management and Economics at University of Electronic Science and Technology of China)

Abstract

This paper analyzes China’s trade relationships using a new trade intensity index, which incorporates gravity model estimation, to compare observed trade levels with levels would be expected to prevail given the economic, geographic, and cultural characteristics of the trading partners. The index is calculated to study China’s bilateral trade intensity, and uses Japan as a comparative case. Standard trade intensity index measures suggest China trades at a very intensive level with countries in East and Southeast Asia (ESA) and at a low level with countries in Europe (EU) and US-Canada (USC). The gravity model based index indicates that China’s level of trade with countries in the ESA region is consistent with levels that would be expected given the countries’ characteristics, while China’s level of trade with EU and USC are greater than one would expect given their characteristics. The new index also reveals insights regarding the evolution of China’s trade partners during the years 1988-2005. The paper’s results suggest the gravity model adjusted trade intensity index can provide a useful analytical tool for identifying strategic or other deviations in trade levels.

Suggested Citation

  • Christopher Edmonds & Yao Li, 2010. "A New Perspective On China Trade Growth: Application Of A New Index Of Bilateral Trade Intensity," Working Papers 201025, University of Hawaii at Manoa, Department of Economics.
    • Handle: RePEc:hai:wpaper:201025
    as

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    File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_10-25.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Maria Crescimanno & Domenico Farruggia & Antonino Galati & Dario Siggia, 2013. "Intensit? degli scambi agroalimentari tra i Paesi del bacino del Mediterraneo," Economia agro-alimentare, FrancoAngeli Editore, vol. 15(1), pages 13-35.

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    More about this item

    Keywords

    Gravity model; Trade Intensity Index; Bilateral Trade; China;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation

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