Do political relations affect international trade? Evidence from China’s twelve trading partners

Journal of Shipping and Trade - 2020
Gregory William Whitten1, Xiaoyi Dai2, C. Simon Fan1, Yu Pang3
1Department of Economics, Lingnan University, Hong Kong, China
2Corporate Sales Division, China Mobile Hong Kong, Hong Kong, China
3School of Business, Macau University of Science and Technology, Macau, China

Tóm tắt

AbstractChina’s growing influence on the world has generated profound effects on the political and economic decisions of her partner nations. Recent conflict escalation between China and western countries gives rise to widespread concern over the possibility of delinking China from global trade and supply chain. By drawing on utility theory, we suggest that the political relationship is a key determinant of collective emotions of consumers and trading companies and consequently the interactions between importers and exporters. We hypothesize that warmer relations lead to larger increases (or smaller decreases) in trade while cooler relations have the opposite effect. Based on monthly data of China and her twelve trading partners from 1981 to 2019, our study provides an empirical investigation into the association between political relationship and bilateral trade flows. Our results show that shocks to relations are highly persistent and frequently cause changes in trade. However, relations themselves are little influenced by changes in trade, changes that show little persistence. We also address the US-China trade war and the observation that innovations to China’s exports to the US improve China’s relations with the US while shocks to American exports to China worsen relations from China’s perspective.

Từ khóa


Tài liệu tham khảo

Bar-Tal, D, Halperin E, De Rivera J (2007) Collective emotions in conflict situations: Societal implications. J Soc Issues 63(2):441–460.

Berkowitz, D, DeJong DN, Husted S (1998) Quantifying price liberalization in Russia”. J Comp Econ 26(4):735–760.

Bown, ChadP. (2019) The 2018 US-China trade conflict after forty years of special protection. China Econ J 12(2):109–136.

Brantstetter, L., Lardy N. (2008) China’s embrace of globalization(Brandt L, Rawski TG, eds.). Cambridge University Press, New York.

Che, Y, Julan D, Yi L, Tao Z (2015) Once an enemy, forever an enemy? the long-run impact of the Japanese invasion of China from 1937 to 1945 on trade and investment. J Int Econ 96(1):182–198.

Cheng, LK, Whitten GW, Hua J (2020) The national security argument for protection of domestic industries. J Chin Econ Bus Stud 17(4):365–388.

Elster, J (1998) Emotions and economic theory. J Econ Lit 36(1):47–74.

Friedman, TL (2000) The Lexus and the Olive Tree. Anchor Books, New York.

Glaeser, EL (2005) The political economy of hatred. Q J Econ 120(1):45–86.

Glick, R, Rose AK (2002) Does a currency union affect trade? The time-series evidence. Eur Econ Rev 46(6):1125–151.

Glick, R, Rose AK (2016) Currency unions and trade: A post-EMU reassessment. Eur Econ Rev 87:78–91.

Glick, R, Taylor AM (2010) Collateral damage: Trade disruption and the economic impact of war. Rev Econ Stat 92(1):102–127.

Hausman, WH (2004). Springer, Boston.

He, Y, Nielsson U, Wang Y (2017) Hurting without hitting: The economic cost of political tension. J Int Fin Mark Inst Money 51:106–124.

Head, K, Thierry M (2014) Gravity equations: Workhorse, toolkit, and cookbook. Handb Int Econ 4:131–195. Elsevier.

Hiscox, MJ (2002) International Trade and Political Conflict: Commerce, Coalitions, and Mobility. Princeton University Press, Oxford.

Krugman, P, Obstfeld M, Melitz M (2014) International Economics: Theory and Policy. Pearson.

Ku, SCY (2002) Indonesia’s relations with China and Taiwan: From politics to economics. Asian Perspect 26(4):227–256.

Lai, K-H, Cheng TCE (2009) Just-in-time Logistics, Surrey. Gower Publishing, UK.

Lai, K-H, Ngai EWT, Cheng TCE (2004) An empirical study of supply chain performance in transport logistics. Int J Prod Econ 87(3):321–331.

Lai, K-H, Pang Y, Wong CWY, Lun V, Ng E (2019) Are trade and transport logistics activities mutually reinforcing? Some empirical evidences from ASEAN countries. J Shipp Trade 4(1):1–17.

Lukin, A (2019) The US-China trade war and China’s strategic future. Survival 61(1):23–50.

Mandelbaum, M (2003) The ideas that conquered the world: peace, democracy, and free markets in the twenty-first century. Public Affairs. 1st edition, New York. https://doi.org/10.2307/20033304.

Martin, R, Roberts C (2017) Cokie roberts answers your questions about presidents and trade policy. Available at http://www.npr.org/2017/05/03/526690214/cokie-roberts-answers-your-questions-about-presidents-and-trade-policy. (2017/03/03).

Maxwell, N (1972) India’s China War. Anchor Books, Garden City.

Moenius, J, Berkowitz D (2011) Law, trade, and development. J Dev Econ 96(2):451–460.

Munim, ZH, Schramm H-J (2018) The impacts of port infrastructure and logistics performance on economic growth: the mediating role of seaborne trade. J Shipp Trade 3(1):1–19.

MOFA (1972) Joint communiqué of the government of Japan and the government of the People’s Republic of China. Ministry of Foreign Affairs of Japan http://www.mofa.go.jp/region/asia-paci/china/joint72.html.

MOFA (2005) Joint statement U.S.-Japan security consultative committee. Ministry of Foreign Affairs of Japan http://www.mofa.go.jp/region/n-america/us/security/scc/joint0502.html.

Nordås, Kyvik H, Pinali E, Grosso MG (2006) Logistics and time as a trade barrier. OECD Publishing, Paris.

Olivero, MP, Yotov YV (2012) Dynamic Gravity: Endogenous Country Size and Asset Accumulation. Can J Econ 45(1):64–92.

Pollins, BM (1989) Conflict, cooperation, and commerce: The effect of international political interactions on bilateral trade flows. Am J Polit Sci 33(3):737–761.

Schneider, G, Barbieri K, Gleditsch N (2003) Globalization and Armed Conflict. Rowman & Littlefield.

Scheve, V, Christian, Sven I (2013) Towards a theory of collective emotions. Emot Rev 5(4):406–413.

Whitten, GW (2018) Price-level co-movements within currency unions: An alternative integration metric. World Econ 41(9):2414–2438.

Witt, MA (2019) De-globalization: Theories, predictions, and opportunities for international business research. J Int Bus Stud 50(7):1053–1077.

Womack, B (2006) China and Vietnam: the Politics of Asymmetry. Cambridge University Press, New York.

Thông tin
Thông tin xuất bản

Journal of Shipping and Trade

Thông tin tác giả