Study On The Impact Of Bilateral Political Relations On China’s Import Trade

Since the reform and opening up,China’s import trade has steadily increased in scale,and China has been the world’s second largest importer since 2009.Statistics from the Ministry of Commerce of the People’s Republic of China show that in 1978,China’s import trade volume was only 10.893 billion US dollars,but in 2019,the import trade volume reached 2076.89 billion US dollars,an increase of about 190.7times in 41 years.However,China’s import trade since the reform and opening-up is still facing challenges brought about by structural imbalances and the deterioration of the environment of international relations.In terms of the structure of imported goods,although the proportion of China’s technology-intensive imports continues to rise,the sources of imports are too concentrated,and the dependence on high-tech products from developed countries,especially the United States,European countries,and Japan,is too high.Some uncertain factors,especially those in bilateral political relations,may cause Chinese companies to face the “neck-choking” risk.What’s more,since the global financial crisis in 2008,the trend of anti-globalization has gradually spread throughout the world.Trade protectionism and unilateralism have risen,and the dependence and cooperation of political and economic relations between countries have continued to decline.Some developed countries frequently introduced trade protection measures,triggering global trade tensions.The “neck-choking” problem caused by the "ZTE Incident" and "Huawei Incident" confirms that the import supply chain of Chinese enterprises is extremely vulnerable to the constraints of key trading partners.Then,in the context of globalization,under the impact of Sino-US trade frictions,and in the face of changes in China’s trade development mode,what role does bilateral political relations play in China’s import trade? How do we examine the impact of bilateral political relations on China’s import trade from a more micro perspective? As the United States is one of China’s most important trading partners,and Sino-US relations are also the most critical bilateral relations in the world,what is the impact of Sino-US bilateral political relations on China’s import trade? Under the framework of international relations,how do we promote the development and upgrading of China’s import trade and ensure the security of the supply chain of Chinese enterprises?In view of this,firstly,based on three micro perspectives of import trade,this dissertation constructs the theoretical mechanism of bilateral political relations and China’s import trade to make up for the current academic deficiencies in the theoretical research of bilateral political relations and China’s import trade.Secondly,based on the analysis of theoretical mechanisms,this dissertation uses the latest released UN General Assembly voting data,world input-output data,China’s industrial enterprises data,and China’s customs trade data,with methods such as the two-stage least squares method,and the double difference method,and empirically analyzes the impact of bilateral political relations on China’s import trade from three perspectives,namely import dual margin,imported product quality,and global value chain embedding.Thirdly,this dissertation analyzes the impact of bilateral political relations on China’s global value chain participation,the dual margin of imports and the quality of Chinese enterprises’ imported products.Fourthly,this dissertation constructs an index of the strength of US export controls on Chinese enterprises,replaces the Sino-US bilateral relationship with this index,and empirically analyzes the impact of Sino-US bilateral political relations on the dual margin of imports,the quality of China’s imported products,and the degree of embeddedness of China’s manufacturing industry in the global value chain.Furthermore,taking the heterogeneity of China’s import trade into consideration,this dissertation further analyzes the impact of bilateral political relations on China’s import trade from the perspective of different trade methods,different corporate natures,different regions,different industries,and different import source countries.Finally,this dissertation attempts to provide policy advice to the government on upgrading China’s import trade and securing supply chains as well as on the improvement and protection of enterprises’ import welfare from different perspectives based on the framework of international relations.Based on theoretical and empirical research,the specific research conclusions of this dissertation are as follows:Firstly,the impact of bilateral political relations on the dual margin of China’s import trade is that the improvement of bilateral political relations has significantly increased the dual margin of imports by Chinese companies,but this increase varies with different forms of ownership,trade methods,regions,industries and import source countries.（1）The improvement of bilateral political relations has the strongest effect on improving the import expansion margin of foreign-invested enterprises,followed by private enterprises,and finally state-owned enterprises;the effect of the improvement of bilateral political relations on the import intensive margin of enterprises is shown in the following order: private enterprises > foreign-invested enterprises > state-owned enterprises.（2）The improvement in bilateral political relations has significantly less effect on the improvement of the dual margin of imports for processing trade enterprises than for general trade enterprises.（3）The effect of the improvement of bilateral political relations on the improvement of the import expansion margin of enterprises is shown in the following order: eastern region > western region > central region,and the effect on the improvement of the import intensive margin of enterprises is shown in the following order: central region >western region > eastern region.（4）The improvement of bilateral political relations has a significant impact on the increase of the import expansion margin of capital-intensive industries,but it has a restraining effect on its import intensive margin.The improvement of bilateral political relations has a significant impact on the expansion of the dual import margin of labor-intensive industries.The improvement of bilateral political relations has a positive effect on the dual marginal increase in imports of enterprises in export-intensive industries and non-export-intensive industries.It has a greater impact on the increase of the expansion margin of enterprises in export-intensive industries,while it has a greater impact on the intensive marginal improvement of enterprises in non-export-intensive industries.（5）The improvement of bilateral political relations has a significant positive impact on the improvement of the dual margin of enterprises importing from developed economies;the improvement of bilateral political relations has a significant positive impact on the intensive margin of enterprises importing from underdeveloped economies and non-APEC members.The improvement of bilateral political relations has a significant negative effect on the expansion of the expansion margin of enterprises importing from underdeveloped economies and APEC members.Secondly,the impact of bilateral political relations on the quality of imported products of Chinese companies is that the improvement of bilateral political relations has a significant role in promoting the quality of imported products of Chinese companies.The impact varies with different corporate natures,ways of trade,regions,industries,and source countries of imports.（1）The improvement of bilateral political relations has the strongest effect on improving the quality of imported products of foreign-invested enterprises,followed by state-owned enterprises,and finally private enterprises.（2）The improvement of bilateral political relations has a greater effect on the quality of imported products of processing trade enterprises than general trade enterprises.（3）The improvement of bilateral political relations has a positive effect on the upgrading of the quality of imported products by enterprises in three different regions,and the order of effect is as follows: western region > eastern region > central region.（4）The improvement of bilateral political relations has a greater effect on the quality of imported products in labor-intensive industries than in capital-intensive industries;the improvement of bilateral political relations has a greater effect on the quality of imported products in export-intensive industries than in non-export-intensive industries.（5）The improvement of bilateral political relations has a significant positive effect on upgrading the quality of products imported from developed economies,but does not have a significant effect on upgrading the quality of products imported from underdeveloped economies;the improvement of bilateral political relations has a significant positive effect on upgrading the quality of products imported from APEC countries,while the opposite is true for non-APEC members.Thirdly,the impact of bilateral political relations on the embeddedness of China’s manufacturing industry in global value chains is that the improvement of bilateral political relations has significantly increased the participation of the manufacturing industry in global value chains,and this promotion effect varies with different partner countries in different time periods.（1）The regression coefficient in the 2000-2003 period is the largest,while the regression coefficient in the entire period from 2004 to 2011 is smaller than that in the 2000-2003 period,but it shows an upward trend as a whole,and the regression coefficient in the period from 2012 to2014 is the smallest.（2）Compared with the improvement of bilateral political relations between China and underdeveloped countries,the improvement of those between China and developed countries has a smaller effect on the participation of China’s manufacturing industry in global value chains;compared with the improvement of bilateral political relations between China and non-OECD countries,the improvement of those between China and OECD countries has a smaller effect on Chinese companies’ participation in the global value chain.Fourthly,the impact of Sino-US political relations on China’s import trade is that the improvement of Sino-US political relations has a significant inhibitory effect on the increase of the import expansion margin of Chinese companies,but it has a significant positive effect on the increase of the import intensive margin,the quality of imported products,and the participation in global value chains.The effect varies with different trading methods,regions,and industries.（1）The improvement of Sino-US political relations has a greater restraining effect on the import expansion margin of processing trade enterprises than general trade enterprises,while the improvement of Sino-US political relations has a greater effect on the expansion of the import intensive margin,the improvement of the quality of imported products,and the globalization for general trade enterprises than for processing trade enterprises.（2）The improvement of Sino-US political relations has a stronger effect on the improvement of the import expansion margin of enterprises in the eastern and western regions than those in the central region,and the improvement of Sino-US political relations plays the strongest role in promoting the participation of enterprises in the central region in the global value chain.Meanwhile,the improvement of Sino-US political relations has a greater impact on the improvement of import intensive margin and the quality of imported products for enterprises in the western region than for those in the eastern and central regions.（3）The improvement of Sino-US political relations has a stronger effect on the marginal increase of import expansion in labor-intensive industries than capital-intensive industries,while the improvement of Sino-US political relations has a smaller positive effect on the expansion of import intensive margin,the improvement of the quality of imported products,and the participation in global value chains for capital-intensive industries than for labor-intensive industries.