An Empirical Study Of Trade Potential Between China And "One Belt One Road" Countries

"One Belt One Road" (OBOR) is an innovative cooperation concept of peaceful development and mutual benefit, as well as a fundamental strategy to seek sustainable economic growth, provided by China. The influencing factors and growth potential of OBOR’s trade with China is worth studying. More specifically, how much trade potential is between China and OBOR countries? What are the main factors that block the way to achieve trade potential, and to what extent? This paper tries to solve above questions by a one-step analysis of stochastic frontier gravity model and resistance analytic model, with panel data from gross level and industry level. The measurement of China’s trade potential with OBOR countries offers data support to the future prospect. The further study of resistance factors provides relevant policies with empirical basis.The empirical analysis is based on background introduction, literature review and status analysis. In the literature review part, on the one hand, summarize the current research status of OBOR and point out the lack of empirical research, especially the research of OBOR trade potential. On the other hand, study the literature about trade potential and its influencing factors to provide this paper’s model construction with some experimental support. The status analysis part conducts a statistical description of trade pattern and trade position both at gross level and industry level, so as to lay a foundation for potential analyses in the later paragraph. The empirical test is carried out at gross level and industry level separately. The natural factors in stochastic frontier gravity model define the size of trade potential while manmade factors in resistance analytic model effect its performance.According to the empirical result, the average trade efficiency between China and OBOR countries is 0.49, which means there is still half of the potential need to be explored. EU and west Asia perform far better than south Asia and some CIS countries. The trade efficiency rises continuously from 2000 but shows downward tendency in recent years. On the industry level, the labor-intensive industry performs better than capital-or-technology-intensive industry and resource-intensive industry. The result proves that economic size, population, per capita GDP difference and same language significantly boost the trade potential while distance and landlocked location have the adverse effects, especially for resource-intensive products. It is worth noting that polity difference and trade freedom difference would prevent the actual trade volume from reaching trade potential significantly.Therefore, many problems are worth proposed and get a deep consideration. For example, how to seek new economic growth points to sustain the trade promotion of economic size, how to improve infrastructure construction so as to reduce the trade resistance of geological barrier, and how to strengthen the bilateral institutional communication for mutual understanding, mutual reference and mutual tolerance between trade parties.