Abstract
In the context of COVID-19, international trade has been strongly impacted, and it is of great significance to accelerate trade exchanges with countries along the "Belt and Road" to achieve trade transformation. This paper uses the time-varying stochastic frontier gravity model to measure trade efficiency based on the data of China and South Asia from 2000 to 2019. The empirical results show that economic scale and population have a positive impact on trade. China's GDP growth is not conducive to the growth of bilateral trade volume, and distance is no longer a factor hindering trade. Trade inefficiency has a great impact on trade. Among them, whether to sign a free trade agreement, the quality of port infrastructure, the simple average tax rate of all products, and political risks have a more significant impact on the trade coefficient. The trade potential between China and South Asian countries is very large and different countries are uneven. China has high trade efficiency with Sri Lanka, Pakistan, India, and Bangladesh, while trade with Bhutan has extremely low efficiency, and trade with Maldives and Nepal is average. Based on the above empirical results and combined with the current epidemic situation, the corresponding conclusions and countermeasures are put forward. For example, exporters should continue to innovate to promote trade transformation and diversified development; combine the western development strategy to promote trade and South Asian exchanges; reduce trade tariff barriers between the two countries; Jointly maintain the security and political situation of the two countries.
Highlights
In 2020, the new epidemic will sweep the world, and international political relations will undergo subtle changes
The results showed that Pakistan has the largest trade potential with countries in the Asia-Pacific region, the Middle East, Latin America and North America, and its trade volume with South Asia is very low
The LNPOPit coefficient of 15.4658 indicates that for every 1% increase in the population of South Asian countries, China’s exports to South Asian countries will increase by 15.4658%, and the population growth of South Asian countries will accelerate trade exchanges, which is contrary to expectations, the reason may be that the population of trading countries drives the increase of market demand and labor force, which leads to an increase in trade volume
Summary
In 2020, the new epidemic will sweep the world, and international political relations will undergo subtle changes. The common interests of China and South Asian countries are accelerating and the potential for economic and trade exchanges continues is deepening, enterprises are increasingly eager to strengthen mutual benefit and mutual assistance. The China Business Council will continue to work hand in hand with other countries to create a better platform for China and South Asian countries to carry out trade activities, provide quality services, and create convenience. It shows that the two sides have strong hopes to jointly strengthen the trade between the two countries, and it is of great significance to continue to deepen the friendship and trade exchanges between the two parties in the context of major emergencies. In order to enhance the trade potential of bilateral countries, this article conducts empirical analysis and exploration and gives corresponding opinions and policies
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