Abstract
Abstract. Globalization and technological revolutions are making the world more interconnected. International trade is an important approach linking the world. Since the 2011 Tohoku earthquake and tsunami in Japan shocked the global supply chain, more attention has been paid to the global impact of large-scale disasters. China is the second largest trader in the world and faces frequent natural disasters. Therefore, this study proposes a gravity model for China's bilateral trade tailored to national circumstances and estimates the impact of natural disasters in China and trading partner countries on Chinese imports and exports. We analyzed Chinese and trading partner statistical data from 1980 to 2012. Study results show the following: (1) China's natural disasters have a positive impact on exports but have no significant impact on imports; (2) trading partner countries' natural disasters reduce Chinese imports and exports; (3) both development level and land area of the partners are important in determining the intensity of natural disaster impacts on China's bilateral trade. The above findings suggest that the impact of natural disasters on trade is asymmetric and significantly affected by other factors, which demand further study.
Highlights
Globalization and technological revolutions are changing traditional ways of life
The World Trade Organization (WTO) (WTO, 2012) claimed that, in addition to financial uncertainty and civil conflict, the 2011 Tohoku earthquake and tsunami in Japan and flooding in Thailand contributed to below-average growth in international trade in 2011 because of the damage to global supply chains, especially the electric, semiconductor and automaker chains
Do natural disasters have significant impact on China’s bilateral trade? Are the effects of disasters in China the same as those outside China? This study proposes a trade gravity model based on the national situation, introduces a natural disaster variable, and quantitatively estimates the impact of those disasters on the nation’s imports and exports to answer those two key questions
Summary
Globalization and technological revolutions are changing traditional ways of life. Today there is a worldwide exchange of people, goods, money, information, and ideas, which have formed complex global networks and produced many new opportunities, services and benefits for humanity. Gassebner et al (2006) quantitatively estimated these impacts on international trade at global scale They found that disasters reduced trade in both exporter and importer countries. Oh and Reuveny (2010) examined the impact of climatic disasters and political risk on international trade from the standpoint of global climate change They found that an increase in climatic disasters in either importer or exporter countries reduced their bilateral trade. There is no denying that China is extremely important in the network of international trade It is the country affected by the most natural disasters over the last decade, followed by the United States, Philippines, India, and Indonesia (Guha-Sapir et al, 2013). Do natural disasters have significant impact on China’s bilateral trade? Are the effects of disasters in China the same as those outside China? This study proposes a trade gravity model based on the national situation, introduces a natural disaster variable, and quantitatively estimates the impact of those disasters on the nation’s imports and exports to answer those two key questions
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