Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/302570 
Year of Publication: 
2024
Series/Report no.: 
BOFIT Discussion Papers No. 8/2024
Publisher: 
Bank of Finland, Bank of Finland Institute for Emerging Economies (BOFIT), Helsinki
Abstract: 
Over the past twenty years, China has become the world's largest trading nation and a significant trading partner for most countries. Despite these important links, concerns regarding China's commercial and diplomatic goals persist due to its unique state-centric economic structure. This paper applies an augmented gravity model to tease out drivers of China's bilateral trade relationships, asking why some countries are more important than others as sources of Chinese imports. Our results show that both business and political considerations drive China's import decisions. Political friendliness with China, as measured by UN General Assembly voting records, or established trade agreements, has a positive impact on exports to China. The results further suggest that countries with official diplomatic ties with Taiwan export less to China. Membership in China's Belt and Road Initiative, however, does not generally translate into a significant increase in Chinese imports from the member country.
Subjects: 
gravity model
international trade
China
JEL: 
C23
F14
F15
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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