Research SAARC Trade Relations - At Strategic Bridgehead In Yunnan Province

With the further implementation of the "bridgehead Strategy", Yunnan has become the forefront of opening up in the southwest of China. Yunnan and SAARC countries’foreign trade developed rapidly, SAARC has become a new growth point and markets in the foreign trade. Therefore, combined with the theory, review of relevant cooperation mechanism and combed the relations of the foreign trade between Yunnan and SAARC will produce an important influence on giving full play location advantages of Yunnan Province, expanding foreign trade and becoming a bridgehead of opening up in the southwest of China.This paper begins with the analysis of foreign trade status and commodity structure between Yunnan and SAARC from the point of view that takes a province. We compare the trade status of both Yunnan and SAARC in competitiveness products, trade complementarities and the export similarity by calculating revealed comparative advantage index, trade complementarities index and export similarity index. Then, collect basic datas in11years between Yunnan and38major trading nations, in total of7262samples,437observations in export model and395observations in import model, and use the gravity model to assess the effects of the foreign trade between Yunnan and SAARC.Based on the above ideas and further research, we got following conclusions:First, there are certain competitiveness on revealed comparative advantage products and similarities on export trade between Yunnan and SAARC. In SITC-0(food and live animals) and SITC-6(manufactured goods classified by material) products, both Yunnan and SAARC have revealed comparative advantage, presenting competition in a certain extent; and there is a great deal of similarities in the classification of products which export to the world among Yunnan Province, India and Pakistan.Second, the foreign trade between Yunnan and SAARC has a significant complementary. The comprehensive trade complementarities index analysis shows that the import and export of certain products have high complementarities among Yunnan, Bangladesh, Sri Lanka, Maldives and Bhutan. Through the commodity structure analysis and trade complementarities index it can be seen that products of SITC-1(beverages and tobacco) and SITC-5(chemicals and related products, n.e.s) between Yunnan and ASEAN have high complementarities, and they also are the main products from Yunnan Province to SAARC. In addition, Yunnan from SAARC import a large number of Ores and concentrates and other raw materials which are SAARC’s revealed comparative advantage products.Third, The economic and trade cooperation between Yunnan and SAARC is conducive to the growth of bilateral trade. It shows that economic growth and per capita income increase provides a driving force for development of both Yunnan and SAARC trade and economy cooperation through gravity model analysis. The economic and trade cooperation between Yunnan and SAARC contributes significantly to the development of bilateral export trade, the promoting to bilateral import trade is not obvious. And it turns out that Yunnan Province, with the SAARC countries has a greater potential in exports and imports trade through the trade potential between Yunnan and SAARC in2010.