An Empirical Study On The Status And Potential Of Bilateral Trade Between China And Pakistan

In recent years,China and Pakistan have continuously pushed forward the construction of the Free Trade Zone.The China-Pakistan Free Trade Agreement was formally implemented on July 1,2007.In February 2009,the two countries signed the Agreement on Trade in Services between the China-Pakistan Free Trade Zone.Pakistan became the first country to sign a service trade agreement with China.In 2013,China put forward the "the Belt and Road " Initiative concept.Pakistan is at the key node of "the Belt and Road " Initiative and is also an important fulcrum for the construction of the "the Belt and Road " in South Asia.In addition,the China-Pakistan Economic Corridor,which is an important part of the " Belt and Road",has started from April 2015,it starts in Kashgar,China and ends in Gwadar,Pakistan,and has entered the early harvest stage.With China's "the Belt and Road" Initiative and the comprehensive advancement of the China-Pakistan Economic Corridor,it is increasingly important to study the trade issues between China and Pakistan.However,scholars in the study of bilateral trade between China and Pakistan are mostly focused on qualitative analysis,which describes the current status and existing problems of bilateral trade between China and Pakistan.In the analysis of the current status of trade in China and Pakistan,scholars mostly conducted research at the aggregate level.This article not only analyzes from the aggregate level,but also uses the international trade standard classification to classify products into ten categories,constructs trade index to measure competition and complementarity,and thus,a deeper understanding of the current situation of China's Pakistan trade is made.In recent years,some scholars have conducted empirical research on bilateral trade between China and Pakistan,but the data used are not comprehensive enough.In view of this,the data in this paper uses the UN COMTRADE database,World Bank database,WTO database and other related data.Based on the traditional gravity model,this paper selected 45 countries including China and Pakistan as samples to establish an extended gravity model.Based on this,it measures the potential of China-Pakistan trade and proposes more effective policy recommendations.Therefore,the research in this paper has theoretical and practical significance.In the trade status section,this article uses the trade data for the period 2000-2016 to quantify the current situation.First of all,the study of the status of international trade between China and Pakistan will provide an intuitive understanding of the status of China and Pakistan in international trade.Second,we will study the degree of close bilateral trade volume with trade structure and trade integration.The results show that the bilateral trade volume between China and Pakistan has grown rapidly,but the Pakistani side has been in a state of deficit for a long time and the trade position of the two parties is not equal.Next,this article establishes a trade index and analyzes the competitiveness and complementarity of China-Pakistan bilateral trade.The results show that:(1)In primary products(SITCO and SITC2)and capital-and technology-intensive products(SITC7),the trade between China and Pakistan is complementary.Among them,Pakistan has a comparative advantage in the export of primary products,and China has a comparative advantage in the export of capital-and technology-intensive products.(2)In labor-intensive products,especially SITC6 products,bilateral trade between China and Pakistan is competitive.Among them,Pakistan has a comparative advantage in the export of such products.However,such competition will tend to weaken as China's domestic industry transitions and upgrades,and will become complementary in the long run.In the capital technology-intensive products and primary products,China and Pakistan will have long-term complementarity.In the empirical research section,on the basis of comprehensive consideration of data availability and the selection of variables,this paper selects two dummy variables:whether the sample country and China have signed a free trade agreement,or whether the sample country and China have a common boundary.The "population" rather than"GDP per capita" variable was introduced to build an extended gravity model based on the traditional gravity model of trade.The regression results indicate that bilateral GDP,population size,whether or not a free trade agreement has been signed,and whether there are common borders will have an impact on the import and export trade.The distance between the two countries has an impact on export trade and has a weaker impact on import trade.Next,based on the gravity model,this paper calculates the bilateral trade potential between China and Pakistan.The results show that the trade potential between China and Pakistan is large,among which Pakistan has greater potential for exporting to China.Finally,on the basis of the above analysis,this article proposes policy suggestions for improving China-Pakistan bilateral trade development:(1)According to the complementarity of China and Pakistan ' s commodity structure,increase imports from Pakistan;(2)accelerating the construction of China-Pakistan Economic Corridor;(3)Improve China-Pakistan free trade zone construction.