Study On Sino-japanese Bilateral Trade Based On Gravity Model

China is the world’s largest developing country; the rapid development since thereform and opening up in1978, foreign trade, China is a big trading now. Geographiclocation adjacent to Japan and China, economies are highly complementary, since theestablishment of diplomatic relations between China and Japan more than40yearsdeepening economic relations and trade cooperation, the bilateral trade volumeincreasing, the trade continued to deepen. Were tense political relations in recent yearshas been the historical causes caused trade friction, while Sino-Japanese bilateral tradein recent years, accounting for the proportion of China’s foreign trade volume declineand other factors are restricting the long-term development of the Sino-Japanesebilateral trade. After many domestic and foreign scholars studied on the gravity modelof theoretical and empirical, the gravity model has become an important method for thestudy of bilateral trade. In this paper, Gravity model has been used to study the bilateraltrade between China and Japan, theoretical and empirical analysis sought to identifyclear factors affect Sino-Japanese bilateral trade development and provide powerfulreference for formulating corresponding policies and measures.This paper uses a combination of theoretical analysis and empirical analysis, andfollows the "total-sector analysis route. Part in the analysis of the development ofSino-Japanese bilateral trade development present situation, the total amount of theSino-Japanese bilateral trade and trade structure are analyzed by using chart tools, theresults show that the trade deficit is gradually expanding, and bilateral trade structure isfurther optimize. Using the gravity model in the empirical part, the total level and thedepartmental level of Sino-Japanese bilateral trade from both imports and exports arestudied, and the results show that the main factors affecting Sino-Japanese bilateraltrade are GDP, per capita GDP, space distance between the two countries and the systemarrangement of APEC. Gravity model estimates show that China’s imports of primaryproducts from Japan are potential, China’s exports to Japan by the "excessive trading"into "deficit trading", the potential of China’s exports to Japan increased.Finally, according to the results of theoretical and empirical analysis, the policyrecommendations to improve Sino-Japanese bilateral trade development are proposed:(1) to adjust the industrial structure, promote industrial upgrading, improve the tradestructure;(2) continue to take the foreign trade strategy of market diversification,diversify foreign trade market risk;(3) the use of multi-channel, multi-channel to resolve trade disputes, reduce trade friction;(4) to speed up the process of a bilateral ormultilateral FTA (free trade agreement) to establish and promote the development ofregional economic integration.