Study On The Trade Efficiency And Potential Between China And Pakistan Under The Construction Of China-Pakistan Economic Corridor

The “China-Pakistan Economic Corridor” is the flagship project of the “Belt and Road” initiative.It is located at the junction of the “Maritime Silk Road” and the “Silk Road Economic Belt”.Not only will it have an important impact on deepening economic and trade cooperation between China and Pakistan,opening up new energy channels,and promoting economic growth,it will also bring positive social and economic effects to neighboring countries or regions.The China-Pakistan Economic Corridor has been fully launched since April 2015 and has entered the early harvest stage.It has achieved initial results in alleviating Pakistan ’s energy shortage,increasing Pakistan ’s employment,and promoting connectivity between the two countries.Based on this background,has the China-Pakistan Economic Corridor effectively promoted bilateral trade? Are there any changes on the trade structure of the two countries? What is the actual trade efficiency? What factors restrict the further development of bilateral trade? How to effectively promote the construction of China-Pakistan Economic Corridor and fully release the trade potential of the two countries? There is important theoretical and practical significance in the study of these issues.Firstly,based on the background of the construction of China Pakistan Economic Corridor,this paper sorted out the important progress and early harvests of the current "1 + 4" layout construction of the corridor from 4 aspects,including Gwadar Port,infrastructure connectivity,energy cooperation and industrial cooperation;secondly,it collected the bilateral trade data of China and Pakistan from 2006 to 2018,analyzed the total amount,balance and growth rate of China-Pakistan trade,and then made a detailed analysis and comparison of the product structure of bilateral trade between China and Pakistan using the Fourth Revision Standard of International Trade Standard Classification(SITC Rev.4).On this basis,it also used Lawrence index,RCA and IIT to analyze the structural changes,competitiveness and complementarity of the goods trade between China and Pakistan.In the empirical analysis part,this paper selected the top 40 countries(regions)of China’s export trade and total import and export trade in 2018(including Pakistan and most countries along the China-Pakistan Economic Corridor),as the research object,collected panel data of these countries,established time-varying stochastic frontier gravity model and non-efficiency model,and analyzed the trade efficiency,potential and main influencing factors of the trade between China and Pakistan.Based on the above ideas,the conclusions of this paper are as follows:The bilateral trade volume between China and Pakistan has grown rapidly during the construction of the China-Pakistan Economic Corridor,but only China ’s exports was promoted,Pakistan’s export showed a downward trend during this time.the total trade scale of two countries’ trade is not large and has not reached the ideal level;Pakistan has been in a state of deficit for a long time,with it increasing continuously,and the unbalanced trade status of the two sides has not been resolved.The trade complementarity between China and Pakistan is stronger than the competitiveness.There is relatively strong competitiveness in labor-intensive products of China and Pakistan,especially in SITC6(manufactured goods classified by raw materials)and SITC8(miscellaneous products),however,with the transformation and upgrading of China’s industries and the deepening of industrial cooperation between the two countries under the framework of CPEC,the competitiveness is bound to be weakened and will be transformed into complementarity in the long run;the strong complementarity lies in primary products such as SITC0(food and activities),SITC4(animal and vegetable fats and waxes)and capital technology intensive products such as SITC7(machinery and transportation equipment).The analysis results of the stochastic frontal gravity model show that the GDP,common borders and common language of China and trading countries including Pakistan all promote export trade and total trade,while population and distance have an inhibitory effect on export trade and total trade.The analysis results of the nonefficiency model show that China’s FDI in trading countries,the logistics performance index,port infrastructure index,customs burden procedure index,economic freedom index of the trading country,and the signing of the FTA and the “Belt and Road” cooperation memorandum puts a promoting effect on export trade and overall trade efficiency,while the national political risks of trading countries have a restraining effect on trade efficiency.China’s export trade and the total trade efficiency to Pakistan has shown a slight downward trend year by year.Among them,the export efficiency is between 0.2-0.4,ranking 10 th among the 40 overseas exports,in a relatively high position.The total trade efficiency value is about 0.21,ranking at 33 rd place,which is relatively backward.The efficiency values of exports and total trade are small,meaning that there exists great potential for trade,and the trade potential is increasing year by year.These conclusions show that the construction of the China-Pakistan Economic Corridor is still in its infancy and the trade potential between China and Pakistan has not been fully released.There is still much space for future trade cooperation.At last,according to the current challenges in bilateral trade of China and Pakistan and empirical analysis conclusions in the construction of the China-Pakistan Economic Corridor,the following policy recommendations are proposed: First,improve the China-Pakistan transportation network and reduce transportation costs.Second,expand investment in Pakistan and promote Pakistan’s industrial upgrading.Third,take targeted measures to optimize the trade structure between China and Pakistan.Fourth,strengthen the construction of border infrastructure and give full play to the location advantages of Xinjiang.Fifth,resolve geopolitical and security risks and create a new situation of win-win cooperation.