Study On The Influencing Factors And Potential Of Sino-Sri Lanka Bilateral Trade

Since its introduction,the “Belt and Road Initiative” has received wide response from the international community and has been accepted to varying degrees by countries along Asia,Africa and Europe.From the perspective of China's policy emphasis on neighboring countries,Southeast Asia and South Asia should be the key areas for the “Belt and Road” cooperation.In order to better promote the implementation of the “Belt and Road”,we should strengthen the study of “key small countries” with significant interests in China.Among them,Sri Lanka has maintained long-term friendship and mutual trust with China in both history and current development,and can be an important choice for China to strengthen the study of “key small countries”.As an important node of the “21st Century Maritime Silk Road”,Sri Lanka's strategic location of the sea is very important.At the same time,Sri Lanka is also the country with the best comprehensive evaluation of economic and trade cooperation with China in South Asian countries.The country has already written the “Belt and Road” cooperation into the national strategy,and the overall development of bilateral relations has been improving.At present,China and Sri Lanka are steadily increasing mutual political trust and laying the foundation for the future development of Sino-Sri Lankan economic and trade relations.As one of the key countries in the “Belt and Road” construction,Sri Lanka's economic and trade cooperation with China has received the attention of the international community since 2013,but the relevant research on SinoSri Lankan cooperation is still not deep enough.This article is the breakthrough point,starting from the background of the “Belt and Road”,focusing on the economic and trade development between China and Sri Lanka.First of all,this paper sorts out,integrates and summarizes the domestic and foreign literatures on the economic and trade relations between China and Sri Lanka by scholars from China,Sri Lanka and India.Secondly,it expounds the relevant theories involved in the article,including comparative advantage theory,factor endowment theory,intra-industry trade theory,national competitive advantage theory and stochastic frontier gravity model.Thirdly,it analyzes the development of Sino-Sri Lankan economic and trade relations and finds that the scale of Sino-Sri Lankan trade is expanding.The total bilateral trade volume between China and Sri Lanka increased from US$230 million to US$4.6 billion in 2001-2017,an increase of nearly 20 times.Sri Lanka's imports from China increased to 19.7% of its total imports.China's trade contribution to Sri Lanka has increased year by year,ranking second among the main trading partners.However,bilateral trade between China and Sri Lanka is not Balance,in the 17 years from 2001 to 2017,Sri Lanka's trade deficit with China has increased year by year,and its trade deficit with China has increased from 210 million US dollars to 3.76 billion US dollars.In the total deficit of Sri Lanka's foreign trade,China and Sri Lanka The trade deficit is taking up a growing proportion.Through the analysis of the competitiveness and complementarity of bilateral trade between China and Sri Lanka,it is found that China has strong and stable competitive advantages in SITC6 and SITC8 labor-intensive commodities,and should increase the products with comparative advantages,namely,Category 6 and 8 commodities.(Exports of finished products classified by raw materials,miscellaneous finished products),reducing the export strength of products with comparative disadvantages,namely,Category 4 and 5 commodities(animal and vegetable oils,oils and fats,chemicals and related products),Sri Lanka has a competitive advantage in resource-intensive products and should increase the export of primary products.When Sri Lanka is an exporter and China is an importer,the two countries are in SITC0,SITC2,SITC4,SITC8(food and live animals,non-edible raw materials other than fuel,animal and vegetable oils,fats and waxes,miscellaneous finished products).There has always been a strong trade complementarity.The competition and complementarity in the Sino-Sri Lankan trade structure coexist,and bilateral trade still has a lot of room for development.Theoretically analyzing the factors affecting the trade development between China and Sri Lanka,it is found that China and Sri Lanka have a long history and deep friendship,and the economic development of the two countries is mutually beneficial.In addition,Sri Lanka's continuously optimized market environment,these factors may promote Sino-Sri Lankan development of trade.However,the Sri Lankan government's policy toward China,the complex political ecology in Sri Lanka,and the competition between the major powers in Sri Lanka may have affected China's investment in Sri Lanka and hindered the development of Sino-Sri Lankan trade.Finally,using the stochastic frontier gravity model to measure the trade efficiency and trade potential of China and Sri Lanka,it is found that the per capita GDP,the total population,the free trade agreement and the freedom of the financial industry have a positive impact on trade.The potential of Sino-Sri Lankan trade is very large.We should speed up the adjustment of the import and export structure of bilateral trade,diversify the types of trade and investment,strengthen the construction of transportation infrastructure,actively promote the process of free trade agreements,strengthen dialogue and cooperation in the economic field,and finally realize the optimization of bilateral trade environment between China and Sri Lanka.The bilateral economic and trade cooperation has been carried out smoothly.