ECONOMIC SHOCKS ON PARTNERS’ TRADE; AFRICA AND ASEAN ON CHINA

Abstract

This research studies the impact of macroeconomic shocks from African and the Association of Southeast Asian Nations (ASEAN) on China’s bilateral trade with them. Data on (GDP) per capita, FDI, inflation, unemployment rates, and trade openness (TO) of China’s African and ASEAN partners were sourced from the World Bank whilst imports and exports data were from the world integrated trade solutions (WITS). It uses the gravity model as a basis and the panel corrected standard errors (PCSE) as well as multivariate regression estimators. The findings reveal that per capita of China’s partners have a strong positive impact on trade with them. Trade openness is reported to increase China’s imports but reduce exports to these partners. Further, an increase in FDI inflows to China’s trade partners leads to an increase in both imports and exports of China. KEYWORDS: Economic shocks, international trade, China, Africa, ASEAN, gravity model