IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/63952.html
   My bibliography  Save this paper

China Integrates Asia with the World: An Empirical Study

Author

Listed:
  • Dinda, Soumyananda

Abstract

The paper focuses 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. The augmented Dicky-Fuller (ADF) and Phillips-Perron (PP) 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 US and its import from Asian nations using monthly aggregate data from December 2005 to July 2010. This study observed that empirically China’s export to the US depends on exchange rate and China’s import from Asia depends on China’s export to the US. China has double role in international trade – (i) China acts as an attractor of all inputs from Asia and (ii) 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 US. 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. China is economically integrated with region and the world. The paper contributes to measure the speed of China's export and import 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

  • Dinda, Soumyananda, 2012. "China Integrates Asia with the World: An Empirical Study," MPRA Paper 63952, University Library of Munich, Germany, revised 08 Nov 2014.
    • Handle: RePEc:pra:mprapa:63952
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/63952/1/MPRA_paper_63952.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. repec:eme:jcefts:v:5:y:2012:i:3:pp:172-184 is not listed on IDEAS
    2. Fukunari Kimura & Ayako Obashi, 2008. "East Asian Production Networks and the Rise of China: Regional Diversity in Export Performance," Keio/Kyoto Joint Global COE Discussion Paper Series 2008-004, Keio/Kyoto Joint Global COE Program.
    3. Richard E. Baldwin, 2011. "Multilateralising Regionalism: Spaghetti Bowls as Building Blocks on the Path to Global Free Trade," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume I, chapter 2, Edward Elgar Publishing.
    4. Dani Rodrik, 2006. "What's So Special about China's Exports?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 14(5), pages 1-19, September.
    5. Zhi Wang & Shang-Jin Wei, 2010. "What Accounts for the Rising Sophistication of China's Exports?," NBER Chapters, in: China's Growing Role in World Trade, pages 63-104, National Bureau of Economic Research, Inc.
    6. Prema‐chandra Athukorala, 2009. "The Rise of China and East Asian Export Performance: Is the Crowding‐Out Fear Warranted?," The World Economy, Wiley Blackwell, vol. 32(2), pages 234-266, February.
    7. Kimura, Fukunari & Takahashi, Yuya & Hayakawa, Kazunobu, 2007. "Fragmentation and parts and components trade: Comparison between East Asia and Europe," The North American Journal of Economics and Finance, Elsevier, vol. 18(1), pages 23-40, February.
    8. Fukunari KIMURA, 2006. "International Production and Distribution Networks in East Asia: Eighteen Facts, Mechanics, and Policy Implications," Asian Economic Policy Review, Japan Center for Economic Research, vol. 1(2), pages 326-344, December.
    9. World Bank, 2005. "Global Economic Prospects 2005 : Trade, Regionalism and Development," World Bank Publications - Books, The World Bank Group, number 14783.
    10. Kimura, Fukunari & Ando, Mitsuyo, 2005. "The Economic Analysis of International Production/Distribution Networks in East Asia and Latin America: The Implication of Regional Trade Arrangements," Business and Politics, Cambridge University Press, vol. 7(1), pages 1-36, April.
    11. Robert Koopman & Zhi Wang & Shang-Jin Wei, 2008. "How Much of Chinese Exports is Really Made In China? Assessing Domestic Value-Added When Processing Trade is Pervasive," NBER Working Papers 14109, National Bureau of Economic Research, Inc.
    12. Dieter Ernst & Boy Luethje, 2003. "Global Production Networks, Innovation, and Work: Why Chip and System Design in the IT Industry are Moving to Asia," Economics Study Area Working Papers 63, East-West Center, Economics Study Area.
    13. Dinda, Soumyananda, 2011. "China’s Trade in Asia and the World: Long run Relation with Short run Dynamics," MPRA Paper 30664, University Library of Munich, Germany, revised 04 May 2011.
    14. Richard E. Baldwin, 2006. "Multilateralising Regionalism: Spaghetti Bowls as Building Blocs on the Path to Global Free Trade," The World Economy, Wiley Blackwell, vol. 29(11), pages 1451-1518, November.
    15. Kalyan K. Sanyal & Ronald W. Jones, 2018. "The Theory of Trade in Middle Products," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 13, pages 203-231, World Scientific Publishing Co. Pte. Ltd..
    16. Athukorala, Prema-chandra & Yamashita, Nobuaki, 2006. "Production fragmentation and trade integration: East Asia in a global context," The North American Journal of Economics and Finance, Elsevier, vol. 17(3), pages 233-256, December.
    17. Harry G. Johnson, 1965. "An Economic Theory of Protectionism, Tariff Bargaining, and the Formation of Customs Unions," Journal of Political Economy, University of Chicago Press, vol. 73(3), pages 256-256.
    18. Ng, Francis & Yeats, Alexander, 2003. "Major trade trends in East Asia : what are their implications for regional cooperation and growth," Policy Research Working Paper Series 3084, The World Bank.
    19. Justin Yifu Lin, 2011. "China and the global economy," Proceedings, Federal Reserve Bank of San Francisco, issue Nov, pages 213-229.
    20. Steven Husted & Shuichiro Nishioka, 2013. "China’s fare share? The growth of Chinese exports in world trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(3), pages 565-585, September.
    21. Ando, Mitsuyo, 2006. "Fragmentation and vertical intra-industry trade in East Asia," The North American Journal of Economics and Finance, Elsevier, vol. 17(3), pages 257-281, December.
    22. Yung Chul Park & Kwanho Shin, 2009. "Economic Integration and Changes in the Business Cycle in East Asia: Is the Region Decoupling from the Rest of the World?-super-," Asian Economic Papers, MIT Press, vol. 8(1), pages 107-140, Winter.
    23. Haddad, Mona, 2007. "Trade integration in East Asia : the Role of China and production networks," Policy Research Working Paper Series 4160, The World Bank.
    24. Kimura, Fukunari & Ando, Mitsuyo, 2005. "Two-dimensional fragmentation in East Asia: Conceptual framework and empirics," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 317-348.
    25. Peter K. Schott, 2008. "The relative sophistication of Chinese exports [‘Manufacturing Earnings and Compensation in China’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 23(53), pages 6-49.
    26. Liviu C. Andrei, 2012. "The economic integration: concept and end of process," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(10(575)), pages 55-70, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dinda, Soumyananda, 2011. "China’s Trade in Asia and the World: Long run Relation with Short run Dynamics," MPRA Paper 30664, University Library of Munich, Germany, revised 04 May 2011.
    2. Dinda, Soumyananda, 2011. "Global Economic Crisis: Enter the Dragon," MPRA Paper 93855, University Library of Munich, Germany, revised 2014.
    3. Mia Mikic & Mochamad Pasha (ed.), 2011. "Fighting Irrelevance: The Role of Regional Trade Agreements in International Production Networks in Asia," STUDIES IN TRADE AND INVESTMENT, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), number tipub2597, April.
    4. Fukunari Kimura & Ayako Obashi, 2016. "Production Networks in East Asia: What We Know So Far," ADB Institute Series on Development Economics, in: Ganeshan Wignaraja (ed.), Production Networks and Enterprises in East Asia, edition 1, chapter 0, pages 33-64, Springer.
    5. João Amador & Sónia Cabral, 2014. "Global Value Chains: Surveying Drivers, Measures and Impacts," Working Papers w201403, Banco de Portugal, Economics and Research Department.
    6. Amador, João & Cabral, Sónia, 2008. "International fragmentation of production in the Portuguese economy: What do different measures tell us?," MPRA Paper 9783, University Library of Munich, Germany.
    7. Lurong Chen & Philippe De Lombaerde, 2013. "China moving up the value chain: What can be learned from the Asian NICs?," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 16(4), pages 407-430, December.
    8. 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.
    9. Guillaume Daudin & Christine Rifflart & Danielle Schweisguth, 2011. "Who produces for whom in the world economy?," Canadian Journal of Economics, Canadian Economics Association, vol. 44(4), pages 1403-1437, November.
    10. Amador, João & Cabral, Sónia, 2014. "Global value chains: surveying drivers and measures," Working Paper Series 1739, European Central Bank.
    11. Richard Baldwin & Javier Lopez-Gonzalez, 2015. "Supply-chain Trade: A Portrait of Global Patterns and Several Testable Hypotheses," The World Economy, Wiley Blackwell, vol. 38(11), pages 1682-1721, November.
    12. Guillaume Daudin & Christine Rifflart & Danielle Schweisguth, 2008. "Value-Added Trade and Regionalization. GTAP Eleventh Annual Conference 'Future of Global Economy', Helsinki, Finland," SciencePo Working papers Main hal-01065996, HAL.
    13. repec:hal:spmain:info:hdl:2441/9541 is not listed on IDEAS
    14. repec:spo:wpmain:info:hdl:2441/9541 is not listed on IDEAS
    15. Ian Coxhead & Sisira Jayasuriya, 2010. "China, India and the Commodity Boom: Economic and Environmental Implications for Low‐income Countries," The World Economy, Wiley Blackwell, vol. 33(4), pages 525-551, April.
    16. repec:spo:wpecon:info:hdl:2441/9541 is not listed on IDEAS
    17. repec:hal:wpspec:info:hdl:2441/9541 is not listed on IDEAS
    18. repec:spo:wpmain:info:hdl:2441/5l6uh8ogmqildh09h4dj9499g is not listed on IDEAS
    19. Marco Giansoldati, 2010. "International Fragmentation and Agglomeration: From Theory to Empirics," Working Papers 2010_06, Department of Economics, University of Venice "Ca' Foscari".
    20. repec:hal:spmain:info:hdl:2441/5l6uh8ogmqildh09h4dj9499g is not listed on IDEAS
    21. repec:hal:wpspec:info:hdl:2441/5l6uh8ogmqildh09h4dj9499g is not listed on IDEAS
    22. Amador, João & Cabral, Sónia, 2009. "Vertical specialization across the world: A relative measure," The North American Journal of Economics and Finance, Elsevier, vol. 20(3), pages 267-280, December.
    23. repec:spo:wpecon:info:hdl:2441/5l6uh8ogmqildh09h4dj9499g is not listed on IDEAS
    24. Richard Pomfret, 2011. "Regional Integration in East Asia," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume I, chapter 16, Edward Elgar Publishing.
    25. Selover, David D. & Yagihashi, Takeshi, 2015. "Examining industrial interdependence between Japan and South Korea: A FAVAR approach," Japan and the World Economy, Elsevier, vol. 36(C), pages 67-87.
    26. Émini , Christian Arnault, 2008. "Breaking down the Poverty and Growth effects of economic policy package: A Double-Calibration Analysis for Cameroun using Microsimulation CGE Model," Conference papers 331695, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    27. Jarreau, Joachim & Poncet, Sandra, 2012. "Export sophistication and economic growth: Evidence from China," Journal of Development Economics, Elsevier, vol. 97(2), pages 281-292.
    28. Prema-chandra Athukorala & Hal Hill, 2010. "Asian trade: long-term patterns and key policy issues," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 24(2), pages 52-82, November.

    More about this item

    Keywords

    Economic Integration; production network; Co-integration; Asia; China; the US; ECM; Engine of Growth; Export; Import; Long run; Short run dynamics.;
    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)

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:63952. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.