The Spatial Dimension of Chinese Trade with Russia: Evidence from Regional Data

Abstract

The present study estimates the magnitude of trade barriers between Chinese regions and their trading partners. The analysis shows that trade barriers between Russia and the Chinese regions are comparable with South American countries and Pakistan, but they are higher vis-à-vis Hong Kong, Taiwan, Kazakhstan and Southeast Asia. A common border with a foreign country leads to a significant increase in trade of Chinese regions. The results explain the unevenly distributed trade between Chinese regions and Russia. Other institutional factors—common language and colonial ties—contribute to an increase in bilateral trade and a reduction of trade barriers. Transport infrastructure, built during Tsarist/Soviet control over some parts of China in the nineteenth and twentieth centuries, contributes to the concentration of Sino-Russian trade interactions in these Chinese regions. The findings also indicate that due to globalization and the growth of the overall economies of scale, trade costs decline with increasing distances between the trading Chinese regions and foreign countries. This, to some extent, explains the obtained values of trade barriers for Russia.