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The influence of regional trade agreements and other factors on China's trade flows to its primary trade partners : an empirical study based on the gravity model

English Abstract

Since China was accepted into the World Trade Organization (WTO) in 2001, China‘s international trade has experienced rapid growth and has become an important driving force of her economy. This thesis studies the factors that have affected China‘s international trade and, in particular, how different regional trade agreements have affected it since 2002. Using the gravity model, this thesis examines various factors that may affect China‘s trade flows with its primary trading partners. Panel data from 28 countries from the period 2002 to 2011 is used. The thesis focuses on the aggregate, import and export trade flows between China and her trading partners. In addition, this research attempts to examine the impact of APEC and ACFTA separately through three augmented gravity models to determine how these regional trade agreements have influenced China‘s international trade. This differs from earlier literature, which has estimated the average trade effects of different RTAs, but none has been specifically applied to China. The empirical results suggest that the increased economic size of China and its trade partners will lead to an increase in trade flows between them. However, the greater the geographic distance between partners, the fewer the trade flows that will exist. The real exchange rate also has a significantly negative effect on China‘s imports, but an insignificant effect on exports. Both the bilateral and multilateral trade agreements that China has signed have contributed to a trade creation effect on Abstract II China‘s trade flows. When specifically examining the effects of APEC and ACFTA, the results still show a significant influence by both trade agreements.

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Tu, Yi Ran


Faculty of Social Sciences and Humanities


Department of Economics




International trade -- China -- 21st century

China -- Foreign economic relations -- Econometric models

China -- Commerce -- Econometric models


Porapakkarm, Ponpoje

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