The Interaction Between International Trade And International Political Relations

The past few decades has witnessed the development of international trade with high speed.Although there has been a slight decline since 2014,the world's total imports and exports in 2016 still reached 15.5 trillion US dollars.Among them,China's total imports and exports in 2016 reached 368.492 billion US dollars,compared to 1978 increased by nearly 180 times.At the same time,the international political relations after the cold war has been becoming increasingly complex.What is the interaction between international trade development and international political relations?Will international trade ease political conflicts or worsen diplomatic relations?What is the mechanism and path of its impact?On the other hand,what is the degree of influence of political relations on trade?Previous studies are qualitative analysis,quantitative research less,and rarely making the two parts into the same framework for analysis.China is the world's largest trade power,but also the permanent members of the Council.And therefore international political relations and trade development level is representative.In view of this,this paper will use the panel VAR model for empirical analysis,to answer the above questions on the basis of previous studies.In particular,this paper studies on the domestic and foreign literature about the impact of trade on political relations,and make a brief assessment.In the empirical part,this paper uses the data of China with five countries as a sample and the five countries have close trade and political relations with China.The data are the monthly panel data from 1995 Jan.to 2016 Feb.And after the selection of lag order and variable order selection,the panel VAR model testifies the political relations and trade development of the degree of interaction and trends.The results of the empirical study show that:(1)the impact of trade on political relations is small,only in the first few months of the impact of trade impact,the long term,the trade is not enough to affect the improvement or deterioration of political relations;(2)political shock The impact on the larger trade,and there is a clear lag effect.Based on the above research,it is concluded that political friendship will promote the development of economic and trade relations.That is,the state tends to reduce the tariff barriers to the political friendly partners,open the domestic market;political deterioration will worsen trade,trade sanctions are often accompanied by the escalation of political conflict.And trade will bring mutual benefit to both sides,but the political relations is still the fundamental interests of the state.At the end of the article,the paper puts forward the prospect of research,including research methods will be more qualitative and quantitative combination.