Research On Facilitation Of Chinese Mineral Products Trade With Indonesian

The trade gravity model is applied to explain influencing factors of bilateral trade flow. Most research showed that economic development scale, population, spatial distance and system of both trade sides affects bilateral trade flow. At the same time, the rising level of trade facilitation contributes to increase bilateral trade volume.The index system to measure the level of a country’s trade facilitation at present has a number of editions. This paper draws lessons from and integrates "Trade Facilitation Action Plan and Measures" which was past APEC in 2002 and evaluation index established by Wilson and John S. who are experts in trade facilitation. And it builds an index system to measure the level of trade facilitation. It concludes every index of the level of China’s and Indonesia’s trade facilitation in recent years through method of index measurement. This paper, at first, the normalized index of the level of trade facilitation is plugged in the revised trade gravity model. Secondly, it measures parameters of the model through least squares estimation. At last, it concludes relatively satisfactory trade gravity model to explain the influencing factors of trade facilitation of minerals trade between China and Indonesia. Results of the model indicate that influencing factors of minerals trade flow between two countries, except economic development scale, include index of measuring the level of trade facilitation, for instance, port efficiency, institutional environment and custom environment of both sides. Under the premise of the influencing factors of trade facilitation of minerals trade between China and Indonesia being verified, this paper raises suggestions of promoting trade facilitation of minerals trade between China and Indonesia to provide reference for the formulation of relevant policies.