Abstract
Based on the use of trade integration index and gravity model, this paper uses the bilateral goods trade data between China and Australia from 2000 to 2019 to analyze the trade status, trade complementarity and trade potential between China and Australia. The results of the study show that the trade scale, trade complementarity and trade potential between China and Australia are constantly expanding. However, from the perspective of trade balance, China has always been in the position of a deficit country, and the deficit is getting larger and larger, especially in terms of primary products. Judging from the trade integration index, China’s trade integration with Australia generally shows an upward trend, indicating that the trade dependence between China and Australia is gradually increasing. Judging from the results of the trade potential analysis, the trade potential between the two countries has not been fully realized, and there is still much room for improvement in bilateral trade relations.
Highlights
Since the establishment of diplomatic relations in 1972, China and Australia have maintained close bilateral economic and trade relations
According to the regression results of the random effects model, the following trade gravity equation can be obtained: lnTAijt= -3.8735 + 1.4873lnYit + 0.1395lnYjt + 0.9715APEC - 0.5253lnDIST Obviously, after controlling for other variables, for every 1% increase in China’s GDF per capita, the bilateral trade volume between China and trading countries will increase by 1.49%; and for every 1% increase in GDP per capita of trading countries, China’s Trade volume will increase by 0.14%. 4.3 Estimation of Bilateral Trade Potential between China and Australia Estimating the potential of bilateral trade flows between countries is an important use of our trade gravity model
Based on the above analysis, we can see that the trade scale, trade complementarity and trade potential between China and Australia are constantly expanding
Summary
Since the establishment of diplomatic relations in 1972, China and Australia have maintained close bilateral economic and trade relations. Between 2000 and 2014, the scale of mineral products trade between China and Australia continued to increase, and the share of mineral products in Australia’s total exports to China expanded rapidly, which reflected China’s mineral products from Australia Dependence. 2. Literature Review In recent years, the research on the economic and trade relations between China and Australia has mainly focused on the measurement of the level of intra-industry trade between the two countries, the construction of free trade zones and the trade of agricultural products. The rate of population growth is fast, and the scale is large; labor-intensive products have increased from 10.87 in 1994 US$ 100 million increased to US$ 18.589 billion in 2013 This trade structure was created because China has abundant labor resources and a vast market space. Australian imports from China have declined slightly, which is in stark contrast to its continued high growth in exports to China
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