Analysis Of The Influence On Trade Potentials Between China And Eight Arctic Countries By The Arctic Sea Route

With China granting observer seat of the Arctic Council on May 15, 2013 and the Arctic sea route opening gradually bringed enormous economic linkage effect, China will have closer economic ties with the Surround-Arctic economic ring which is made up of Amercica, Russia, Canada, Finland, Swden, Denmark, Norway and Iceland. The shipping lanes between the world’s largest manufacturing center(China) and the biggest consuming market(Europe and America) will be more convenient.The traditional international trade environment is also bound to a major change.So studying the trade determinants and potentials between China and eight Arctic countries systematicly, evaluating quantitatively the promotion degree of the trade potentials between China and erght Arctic countries caused by the Arctic sea route opening and putting forward countermeasures and suggestions focus on promoting the bilateral trade will have very important strategic significance.On the basis of analyzing dialecticly and referencing those previous research,breaking the predecessors’ barriers in qualitative research, the paper combines qualitative research and quantitative research, studying the influence on China and eight Arctic countries by the Arctic sea route from shipping distance and trade potentials.The qualitative part firstly analyse the value of shortening distance tothe world’s economic and trade pattern brought by the Arctic sea route and then high spot reviews China and eight Arctic countries’ economic profile including their economic scale, trade scale and forgien trade dependence and introduce the mutual trade between China and eight Arctic countries, studying the mutual trade volume,trade model and trade composition. The qualititave part builds a stochastic frontier gravity model and use the panel data in 1998-2012, exploring the determinants of bilateral trade between China and the eight Arctic countries. According to parametric equations and technical efficiency obtained, the paper estimates respectively the current stage of China and the eight Arctic countries’ trade potentials and the Arcticshipping routes’ opening of which and compares the two. Then evaluating quantitatively the effect of the Arctic Passage opening on the trade potentials between China and eight Arctic countries.The results show that: 1)The opening of the Arctic sea route will reduce the distance between China and eight Arctic countries ranging from 20% to 46%.2)Every1% increase in Chinese GDP, which will enable exports increased by 0.758%, a0.746% increase in total imports and exports.Every 1% increase in eight Arctic countries’ GDP, which will enable exports increased by 0.817%, a 0.548% increase in total imports and exports.3)When shipping distance between China and eight Arctic countries per shortened 1% due to the gradually opening of the Arctic sea route,China’s export volume and import-export volume will increase 0.683% and 0.576%respectively.4)The opening of the Arctic Passage has great positive influence on improving mutual trade potentials between China and the eight Arctic countries.It will make export potential rise by 9%- 11%, import-export potential increase 15-17%between China and eight Arctic countries..