China And ASEAN Trade Cost Measure And Influencing Factors

In the traditional trade theory, trade costs has always been seen as an exogenousvariable, and excluded outside the theoretical model for a very long time. With thewave of economic integration raging hit, international trade theory in the developmentof innovation, absorbing and emerging the research results in related fields morewidely. At this point, the research of trade costs appears to be increasingly important,and is becoming the core concepts of trade theory.Although the aftermath of the economic crisis is not flat in2010, theChina-ASEAN FTA formally established, with important political and economicsignificance. It provides a new opportunity for the study of regional integration andinternational trade.Firstly, we use relevant statistical analysis to study the trade status and traderelations between China and ASEAN from1995to2010. The results show thatbilateral trade volume increases at an average annual rate of21%. The major tradingcommodities have been transformed into the capital-intensive or technology-intensiveproducts. ASEAN has relative competitive advantage in the export of primaryproducts. In the contrast, China has competitive advantage in the export of6categoryand7category products. There is low trade complementarity between the Chineseexports with ASEAN imports. While the trade between ASEAN exports and Chineseimports are highly complementary. Subsequently, this article adopts the trade costestimation model which can relax the symmetry assumption of bilateral trade costs tomeasure and compare the bilateral trade costs between1995and2009between Chinaand ASEAN and four other major trading partners. The estimates show that in15years, China and ASEAN bilateral trade costs fell by33.34%. The article alsodecomposes the bilateral trade growth to three aspects of revenue growth, costreduction of trade, the multilateral resistance decreased. In the empirical researchsection, by using the indirect decomposition of the traditional gravity model of tradecost to build a multiple regression model regression analysis of the various factors toaffect China-ASEAN bilateral trade costs. The results show that distance, thedifference between the per capita GDP and exchange rate volatility on trade costshave a significant positive impact on bilateral trade costs. While a common languageand the accession to the WTO are conducive to the decline in trade costs. The RMB exchange rate fluctuations are the most significant factors on trade costs. On this basis,this article uses the changes of the elasticity of substitution, to te st the robustness ofthe regression analysis. Finally, based on the above theoretical analysis and empiricalresults, this articles put forward relevant policy recommendations from three aspects.At last, we summarize the whole paper.