The Research On The Impact Of Cultural Differences On Bilateral Trade Between China And RCEP Countries

The development of international trade is not only influenced by the level of economic development,population size and geographical location of the two trading parties,but also by cultural factors such as national customs,religious beliefs,language and script.A growing number of studies have identified culture as one of the main factors influencing international trade.The Regional Comprehensive Economic Partnership Agreement,RCEP initiative,which was officially implemented on 1 January 2022,presents opportunities and challenges for bilateral trade between China and countries in the region.The agreement involves 15 countries with a population of approximately 2.3 billion,accounting for 30% of the global GDP.The countries in the region have different languages and values,and these cultural differences will have an impact on the development and depth of bilateral trade.This paper firstly explains the mechanism of the effect of cultural differences on international trade from the perspective of transaction costs and demand preferences,and then analyses the current trade situation between China and the RCEP countries from three dimensions: total trade,trade commodity structure and trade spatial distribution,and finds that China’s trade ties with the RCEP countries are getting closer.Based on the Hofstede national cultural dimension score data,the KSI index method and the EDI measurement method were used to measure and analyse the cultural differences between China and RCEP countries.Subsequently,on the basis of the current trade situation and theoretical analysis,the cultural distance variable was introduced into the trade gravity model to empirically test the impact of cultural differences on bilateral trade between China and RCEP countries.The results show that: cultural differences significantly hinder bilateral trade between China and RCEP countries;increasing cultural differences lead to an increase in trade costs for both sides in international trade and a smaller overlap in the demand structure of the two countries,which in turn inhibits bilateral trade;cultural differences have a greater impact on bilateral trade between China and developing countries than on bilateral trade between China and developed countries;cultural differences have a slight impact on China’s bilateral trade with RCEP Cultural differences have a slight facilitating effect on trade in primary goods and a significant hindering effect on trade in manufactured goods between China and RCEP countries;cultural differences have a significant inhibiting effect on China’s export trade with RCEP countries and a negative but insignificant effect on import trade;differences in the six dimensions of culture have different directions and degrees of influence on bilateral trade,both facilitating and hindering.The findings of this paper suggest that China has a significant role to play in promoting import trade.The findings of this paper suggest that China should pay attention to the role of cultural factors in international trade in the process of promoting the comprehensive construction of the RCEP agreement,strengthen cultural interactions and mutual trust with regional countries,resolve trade barriers caused by cultural differences,and promote win-win cooperation,so as to promote the further development of trade cooperation between China and RCEP countries and the early realisation of the blueprint of the RCEP agreement.