The Determinants, Potential And Prospect Of Sino-Russian Trade: A Comparative Analysis Based On Gravity Model

Recent years, many scholars have always given their attention to the issue of trade between Russia and China. Taking trade between Russia and China as the research object, this thesis on one hand realizes the aim of understanding the decisive factors, potential and prospect of the trade between Russia and China through a ab uno disce omnes perspective, and on the other hand, with an idea to put theory into practice, this thesis hope to make recommendations to increase export between the two countries.The body of the thesis can be divided in to three parts:The first part addresses the current situation, features and importance of trade between Russia and China. The thesis firstly introduces the natural situation of the two countries such as the geographic location and the trade situation. Meanwhile, the thesis illustrate the trade between the two countries using two graphs which describe respectively the increase of export to the two countries from each other and the increase of export of products with 0+1,2+4,5+7,6+8 classification from China to Russia. Based on the analysis above the thesis demonstrates the increase and its feature of the trade between the two countries from various angles, and point out the importance of the trade between the two countries and emergence to enhance it.The second part which is one of the main parts of the thesis makes a time serial analysis including the setting up of the model and empirical test which use ordinary least square methods and the EViews 5.0 to analyze the data from 1992 to 2005. The thesis concludes through empirical test and analysis of the trade potential: the factors that determine the total quantity of trade between the two countries are the china's GDP and the opening extent of its trade, while the influence of Russia on the trade is slim. In addition, the influence of the petroleum price increase on the trade between the two countries is also very important.The third part sets up of the seven-country model and makes the empirical test, comparable analysis and forecast of the potential. The thesis first introduces the trade gravity model which is an important approach to make empirical analysis of international trade. Then the thesis sets up a trade gravity model which is appropriate to china based on the model introduced above and analyzes the decisive factors, potential and prospect of the trade between the seven countries using this model. We see the potential and prospect of the trade between Russia and China through compare between China and U.S.A, German, Japan, Korea and Indonesia. It is obvious through the compare between the seven countries and China that the increase situation of trade between Russia and China surpass that of china between other trade companions, and the trend is optimistic. The current emergence is to enhance the economic cooperation between Russia and China.The fourth part brings forward the conclusion and recommendations. Looking from the whole empirical test, it can be concluded the main factor determining the trade quantity between two countries is their GDP and geographic distance, which perfectly fit with the trade gravity model. It can be derived from the time serial analysis that the main factors determining the total quantity of trade between the two countries are the china's GDP and the opening extent of its trade. At the end the author provided some policy recommendations with the hope to offer revelations and reference to the bilateral trade.