An analysis of trade cooperation: Central region in China and ASEAN.

Roni Bhowmik,Kuo Gao,Yuhua Zhu,László Vasa

doi:10.1371/journal.pone.0261270

Abstract

China-ASEAN are the two huge markets in trade world, they can bring out greater dynamism from within their economies and contribute to regional economic development. This study explores the present situation on the trade between the Central region of China and ASEAN through empirical assessment and try to find the potential effects and trade flows between them. Firstly, we analysis the trade integration index, HM index, explicit comparative advantage index, and trade complementarity index. Finally, we use the gravity model of international trade and data on 2006–2018. The bilateral trade relations between the central region and ASEAN are getting closer, but the central region has not yet become the major trade area of ASEAN countries in the Chinese market. The bilateral economic development level plays a positive role in promoting the export trade between the Central region and ASEAN, while the bilateral distance plays a negative role in difficulty. The empirical results show that trade potential between the Central region and Indonesia and the Philippines is huge, and there is still opportunity for the development of the trade potential with Thailand. The trade prospective with Malaysia, Singapore and Vietnam is limited, and new approaches need to be developed to achieve further trade cooperation.

Highlights

Since the formal establishment of the strategic partnership between China and Association of Southeast Asian Nations (ASEAN), China has become ASEAN’s largest trading partner for ten consecutive years, and ASEAN has become China’s third largest trading partner for eight consecutive years [1]
It is necessary to discuss whether the Central region and ASEAN countries have a high degree of trade closeness and significance
ASEAN’s trade integration index for the Central region is relatively low, which is less than 1 before 2012, only 0.685 in 2005, and remained above 1 after 2012. This shows that the trade relationship between ASEAN and the Central region is relatively alienated in the early stage, but with the successive implementation of the ASEAN-China Free Trade Area (ACFTA) and One Belt One Road (OBOR) strategy, the trade relationship between ASEAN and the Central region has been significantly strengthened, and trade links have become getting closer

Summary

Introduction

Since the formal establishment of the strategic partnership between China and Association of Southeast Asian Nations (ASEAN), China has become ASEAN’s largest trading partner for ten consecutive years, and ASEAN has become China’s third largest trading partner for eight consecutive years [1]. The average tariff of China to ASEAN goods has dropped from 9.8% to 0.1%, while the average tariff of ASEAN to China goods has dropped from 12.8% to 0.6%, which directly bring the growth of bilateral trade and investment [2]. In 2017, the bilateral trade volume had exceeded USD 500 billion, and the two-way direct investment had accumulated nearly USD 200 billion. In 2018, on the occasion of the 15th anniversary of the establishment of the strategic partnership between China and ASEAN, it has been announced by China and Asian about the vision of China ASEAN strategic partnership 2030, marking that China ASEAN relations have officially entered a new era.

Methods

Results

Conclusion