An Examination of Trade Flow and Trade Potential in Greater China Area: Evidence from Gravity Model
Date Issued
2014
Date
2014
Author(s)
Hong, Yu-Chin
Abstract
This study uses gravity model to estimate the determinants of trade flows, border effect and trade potential in Greater China Area (Hong Kong, Mainland China and Taiwan) from 1991 to 2012. Findings of this study are summarized as follows:
1. Home countries’ GDP, trading partners’ GDP, language and the membership of Asia-Pacific Economic Cooperation (APEC) have a positive effect on trade, while the distance factor has a negative influence on it.
2. The actual trade flows between Mainland China and Taiwan are much lower than the trade potential until 2003. From 2004 to 2012 the actual trade flows exceed the trade potential, meaning that the trade potential is exploited.
3. The actual trade flows between Mainland China and Hong Kong are much higher than the trade potential, indicating that the trade potential between Mainland China and Hong Kong is exploited, and that Hong Kong fills the role of trading agent when Mainland China trading with other countries. The actual trade flows between Hong Kong and Taiwan are higher than the trade potential, meaning that the trade potential between Hong Kong and Taiwan is exploited and the trade relation between Hong Kong and Taiwan is close.
4. The actual trade flows in Greater China Area are higher than the trade potential, which can be a valuable piece of evidence for a deep trade relation in Greater China Area.
5. The border effect between Mainland China and Taiwan is not found, which can hardly stand for a close trade relation between Mainland China and Taiwan.
6. The border effect between Mainland China and Hong Kong is very high but declines from year to year, indicating that Hong Kong’s importance is declining in intermediary trade. The border effect between Hong Kong and Taiwan is high and keeps fast constant in the sample period.
7. Enormous and significant border effect in Greater China Area is not found in the sample period, indicating that a trading bloc does not exist in Greater China Area.
1. Home countries’ GDP, trading partners’ GDP, language and the membership of Asia-Pacific Economic Cooperation (APEC) have a positive effect on trade, while the distance factor has a negative influence on it.
2. The actual trade flows between Mainland China and Taiwan are much lower than the trade potential until 2003. From 2004 to 2012 the actual trade flows exceed the trade potential, meaning that the trade potential is exploited.
3. The actual trade flows between Mainland China and Hong Kong are much higher than the trade potential, indicating that the trade potential between Mainland China and Hong Kong is exploited, and that Hong Kong fills the role of trading agent when Mainland China trading with other countries. The actual trade flows between Hong Kong and Taiwan are higher than the trade potential, meaning that the trade potential between Hong Kong and Taiwan is exploited and the trade relation between Hong Kong and Taiwan is close.
4. The actual trade flows in Greater China Area are higher than the trade potential, which can be a valuable piece of evidence for a deep trade relation in Greater China Area.
5. The border effect between Mainland China and Taiwan is not found, which can hardly stand for a close trade relation between Mainland China and Taiwan.
6. The border effect between Mainland China and Hong Kong is very high but declines from year to year, indicating that Hong Kong’s importance is declining in intermediary trade. The border effect between Hong Kong and Taiwan is high and keeps fast constant in the sample period.
7. Enormous and significant border effect in Greater China Area is not found in the sample period, indicating that a trading bloc does not exist in Greater China Area.
Subjects
引力模型
大中華地區
邊界效果
APEC
兩岸貿易
Type
thesis
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