Research on Sino-British Trade Efficiency and Potential

Abstract

On the basis of analyzing the bilateral trade combination, export concentration and complementarity between China and the UK, a stochastic frontier gravity model is used to measure the trade efficiency and potential between China and the UK, and a realization path for China-UK trade cooperation is proposed. It is found that: the bilateral trade volume between China and the UK is steadily increasing, but the growth of UK exports to China is sluggish and the trade deficit is expanding year by year; the trade links between China and the UK are relatively loose, but there is a trend of strengthening; the trade products are more complementary and the types of trade complementary goods between the two countries do not overlap; but the export concentration is high. The trade potential between China and the UK is expanding year by year, reaching 224.9 billion USD by 2019; trade efficiency is steadily increasing, but is significantly constrained by tariff barriers and average turnaround time of imports, while financial and commercial liberalization can significantly improve the trade efficiency between the two countries. It is recommended to strengthen cooperation with the UK in the financial sector, expand imports of service products to the UK, and promote the construction of a free trade zone between the two countries at an appropriate time.