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China integrates Asia with the world: an empirical study

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  • Soumyananda Dinda

Abstract

Purpose - – The aim of this paper was to focus on China’s economic integration with Asia region and the world. It also attempts to find the long-run relation with short-run dynamics of China’s trade in Asia and the world. Design/methodology/approach - – The augmented Dickey–Fuller and Phillips–Perron methods are applied to test the time-series properties of the variables. Co-integration technique is used to detect the economic integration of China’s export to the USA and its import from Asian nations using monthly aggregate data from December 2005 to July 2010. Findings - – This study observed that empirically China’s export to the USA depends on exchange rate and China’s import from Asia depends on China’s export to the USA. China has double role in international trade – China acts as an attractor of all inputs from Asia, and China exports the final products in international market. This study also reveals that the speed of China’s import from Asia is faster than that of China’s export to the USA. Research limitations/implications - – This study has some limitation in terms of data availability, and choice of methodology like the Gravity model Practical implications - – The results imply that China’s trade should be treated as an engine of growth in the Asian developing countries and the trade promotion policies should be encouraged. The emerging China will create other opportunities through trade integration with Asia and the world. Social implications - – These empirical findings will help policy-makers formulate their policy and design the mechanism for application as per their targets. Originality/value - – China is economically integrated with the region and the world. The paper contributes to measure the speed of China’s export and import in short run within Asia and the world. These empirical findings will help policy-makers to formulate their policy and design the mechanism for application as per their targets.

Suggested Citation

  • Soumyananda Dinda, 2014. "China integrates Asia with the world: an empirical study," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing Limited, vol. 7(2), pages 70-89, May.
    • Handle: RePEc:eme:jcefts:v:7:y:2014:i:2:p:70-89
    DOI: 10.1108/JCEFTS-06-2013-0022
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    Cited by:

    1. Dinda, Soumyananda, 2011. "Global Economic Crisis: Enter the Dragon," MPRA Paper 93855, University Library of Munich, Germany, revised 2014.
    2. Dinda, Soumyananda, 2015. "Impact of China’s slowdown on the Global Economy: Modified GVAR Approach," MPRA Paper 72472, University Library of Munich, Germany, revised 11 Sep 2015.

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    More about this item

    Keywords

    China; Asia; Co-integration; Double engine of growth; Economic integration; Long-run equilibrium with export and import; Short-run dynamics; ECM;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • F2 - International Economics - - International Factor Movements and International Business
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F5 - International Economics - - International Relations, National Security, and International Political Economy
    • N95 - Economic History - - Regional and Urban History - - - Asia including Middle East
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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