Abstract
The paper mainly studies trade complementarity between China and three Baltic States, namely Lithuania, Latvia and Estonia. The paper first introduces China and the three Baltic States’ current trade situation. It then makes an empirical analysis on the trade complementarity between China and the three Baltic States by using models of revealed comparative advantage (RCA) and trade complementarity index (TCI) respectively, which reveals that complementarities of China to the Baltic States are mainly in the labor-intensive products, while complementarities of the three Baltic States to China are in the resource-intensive products. However, the current structure of imported goods from the Baltic States to China is different from the results of complementarity analysis. In this study an expanded trade gravity model is used to analyze trade potential, which helps to develop feasible trade strategies and it shows that trade between China and the Baltic States needs to be fully exploited.
Highlights
In 2013, President Xi Jinping coined a strategic conception of the Silk Road Economic Belt and 21st-Century Maritime Silk Road, known as “One Belt One Road”
Since there have no empirical studies on trade complementarity between China and the Baltic States, the complementarity between other countries can be used as a reference for this study
This paper is written to fill in the gap and to emphasize the importance of research on Sino-Baltic trade complementarity as well
Summary
In 2013, President Xi Jinping coined a strategic conception of the Silk Road Economic Belt and 21st-Century Maritime Silk Road, known as “One Belt One Road”. The three Baltic States, namely Lithuania, Latvia and Estonia, are of a strategic location to connect the active East Asian economic area and the highly developed European economic area, which play an important role to the successful development of “One Belt One Road” project. The trade between China and the Baltic States has been more closely connected which has significant influences on mutual benefits of countries along the “One Belt One Road”. For a more successful and improved trade situation, how to decide future development strategies of China and the Baltic States based on trade complementarity will be one of the key concerns. The fourth section is an empirical analysis concerning Sino-Baltic trade complementarity by adopting models of RCA and TCI. The conclusion and Sino-Baltic trade development strategies are made and discussed
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