IDEAS home Printed from https://ideas.repec.org/a/pal/palcom/v11y2024i1d10.1057_s41599-023-02525-w.html
   My bibliography  Save this article

The effect of fluctuations in bilateral relations on trade: evidence from China and ASEAN countries

Author

Listed:
  • Yuren Wang

    (Shenzhen University)

  • Yitao Tao

    (Shenzhen University)

Abstract

China and ASEAN have strong ties and have become each other’s largest trading partners. This article uses the gravity model and a novel method of analysis, based on massive event data provided by the Global Database of Events, Language, and Tone, to empirically analyse the impact of fluctuations in bilateral relations between China and ASEAN on bilateral trade from January 2001 to December 2020. An analysis of 1,204,126 event records concluded that the improvement of bilateral relations was beneficial for trade between China and ASEAN countries. China’s export trade was more easily influenced by bilateral relations than its import trade. Compared to the one-way behavioural attitude of ASEAN countries towards China, China’s one-way reaction to ASEAN countries had a greater impact on bilateral trade. China’s trade dependence level with most ASEAN countries maintains a trend of steady growth, and trade relations show a positive trend. Therefore, China and ASEAN should maintain stable political ties, enhance mutual understanding, strengthen economic and political connectivity, take adequate measures to promote mutual trust, continue optimizing cooperation models, and promote high-quality and high-level sustainable development across the region.

Suggested Citation

  • Yuren Wang & Yitao Tao, 2024. "The effect of fluctuations in bilateral relations on trade: evidence from China and ASEAN countries," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-13, December.
    • Handle: RePEc:pal:palcom:v:11:y:2024:i:1:d:10.1057_s41599-023-02525-w
    DOI: 10.1057/s41599-023-02525-w
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41599-023-02525-w
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41599-023-02525-w?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Yang-Chao Wang & Jui-Jung Tsai & En You, 2022. "The impact of RMB internationalization on the exchange rate linkages in China and ASEAN countries," Applied Economics, Taylor & Francis Journals, vol. 54(43), pages 4961-4978, September.
    2. Jingyuan Hou & Zhonghai Cheng & Xinshu Gong, 2022. "The Effect of Exports and Two-Way Foreign Direct Investment between China and Pan-East Asian Countries," Sustainability, MDPI, vol. 14(24), pages 1-19, December.
    3. Reuven Glick & Alan M. Taylor, 2010. "Collateral Damage: Trade Disruption and the Economic Impact of War," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 102-127, February.
    4. Chuchu Zhang & Chaowei Xiao & Helin Liu, 2019. "Spatial Big Data Analysis of Political Risks along the Belt and Road," Sustainability, MDPI, vol. 11(8), pages 1-16, April.
    5. Volker Nitsch, 2007. "State Visits and International Trade," The World Economy, Wiley Blackwell, vol. 30(12), pages 1797-1816, December.
    6. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    7. Li, Yuhua & Jian, Ze & Tian, Wei & Zhao, Laixun, 2021. "How political conflicts distort bilateral trade: Firm-level evidence from China," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 233-249.
    8. Christina L. Davis & Andreas Fuchs & Kristina Johnson, 2019. "State Control and the Effects of Foreign Relations on Bilateral Trade," Journal of Conflict Resolution, Peace Science Society (International), vol. 63(2), pages 405-438, February.
    9. Nitsch, Volker & Schumacher, Dieter, 2004. "Terrorism and international trade: an empirical investigation," European Journal of Political Economy, Elsevier, vol. 20(2), pages 423-433, June.
    10. Gowa, Joanne & Mansfield, Edward D., 1993. "Power Politics and International Trade," American Political Science Review, Cambridge University Press, vol. 87(2), pages 408-420, June.
    11. Du, Yingxin & Ju, Jiandong & Ramirez, Carlos D. & Yao, Xi, 2017. "Bilateral trade and shocks in political relations: Evidence from China and some of its major trading partners, 1990–2013," Journal of International Economics, Elsevier, vol. 108(C), pages 211-225.
    12. Baier, Scott L. & Bergstrand, Jeffrey H., 2009. "Bonus vetus OLS: A simple method for approximating international trade-cost effects using the gravity equation," Journal of International Economics, Elsevier, vol. 77(1), pages 77-85, February.
    13. Morrow, James D. & Siverson, Randolph M. & Tabares, Tressa E., 1998. "The Political Determinants of International Trade: The Major Powers, 1907–1990," American Political Science Review, Cambridge University Press, vol. 92(3), pages 649-661, September.
    14. Jianting Fan & Bo Lu, 2021. "The impact of summit visits on bilateral trade: Empirical evidence from China," The World Economy, Wiley Blackwell, vol. 44(12), pages 3583-3608, December.
    15. Yeats, Alexander J, 1990. "Do African Countries Pay More for Imports? Yes," The World Bank Economic Review, World Bank, vol. 4(1), pages 1-20, January.
    16. Erik Gartzke, 2007. "The Capitalist Peace," American Journal of Political Science, John Wiley & Sons, vol. 51(1), pages 166-191, January.
    17. Chi-Wei Su & Yu Song & Ran Tao & Lin-Na Hao, 2020. "Does political conflict affect bilateral trade or vice versa? Evidence from Sino-U.S. relations," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 33(1), pages 3238-3257, January.
    18. Gregory Whitten & Xiaoyi Dai & Simon Fan & Yu Pang, 2020. "Do political relations affect international trade? Evidence from China’s twelve trading partners," Journal of Shipping and Trade, Springer, vol. 5(1), pages 1-24, December.
    19. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-116, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jianting Fan & Bo Lu, 2021. "The impact of summit visits on bilateral trade: Empirical evidence from China," The World Economy, Wiley Blackwell, vol. 44(12), pages 3583-3608, December.
    2. (ed.), 0. "Research Handbook on Economic Diplomacy," Books, Edward Elgar Publishing, number 16053.
    3. Yan, Jiaqiang & Zhou, Yonghong, 2021. "Economic return to political support: Evidence from voting on the representation of China in the United Nations," Journal of Asian Economics, Elsevier, vol. 75(C).
    4. Fuchs, Andreas & Klann, Nils-Hendrik, 2013. "Paying a visit: The Dalai Lama effect on international trade," Journal of International Economics, Elsevier, vol. 91(1), pages 164-177.
    5. Faqin Lin & Wenshou Yan & Xiaosong Wang, 2017. "The impact of Africa-China's diplomatic visits on bilateral trade," Scottish Journal of Political Economy, Scottish Economic Society, vol. 64(3), pages 310-326, July.
    6. Peter A.G. van Bergeijk, 2009. "Economic Diplomacy and the Geography of International Trade," Books, Edward Elgar Publishing, number 13518.
    7. Head, Keith & Mayer, Thierry, 2014. "Gravity Equations: Workhorse,Toolkit, and Cookbook," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 131-195, Elsevier.
    8. S. Brock Blomberg & Rozlyn C. Engel, 2012. "Lines in the Sand: Price Dispersion across Iraq's Intranational Borders before, during, and after the Surge," Journal of Law and Economics, University of Chicago Press, vol. 55(3), pages 503-538.
    9. Jing Li & Hongkui Liu & Qian Xie, 2023. "Bilateral Relations and Exports: Evidence from Google Big Data," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(1), pages 182-210, January.
    10. Yaying Liu & Jin Chen & Churen Sun, 2022. "Partnership Diplomacy and China’s Exports," Sustainability, MDPI, vol. 14(19), pages 1-22, September.
    11. Vincenzo Bove & Leandro Elia & Petros G. Sekeris, 2014. "US Security Strategy and the Gains from Bilateral Trade," Review of International Economics, Wiley Blackwell, vol. 22(5), pages 863-885, November.
    12. Qureshi, Mahvash Saeed, 2013. "Trade and thy neighbor's war," Journal of Development Economics, Elsevier, vol. 105(C), pages 178-195.
    13. Du, Yingxin & Ju, Jiandong & Ramirez, Carlos D. & Yao, Xi, 2017. "Bilateral trade and shocks in political relations: Evidence from China and some of its major trading partners, 1990–2013," Journal of International Economics, Elsevier, vol. 108(C), pages 211-225.
    14. Peter Egger & Martin Gassebner, 2015. "International terrorism as a trade impediment?," Oxford Economic Papers, Oxford University Press, vol. 67(1), pages 42-62.
    15. Lin, Faqin & Hu, Cui & Fuchs, Andreas, 2019. "How do firms respond to political tensions? The heterogeneity of the Dalai Lama Effect on trade," China Economic Review, Elsevier, vol. 54(C), pages 73-93.
    16. repec:got:cegedp:113 is not listed on IDEAS
    17. Pao-Li Chang & Tomoki Fujii & Wei Jin, 2022. "Good Names Beget Favors: The Impact of Country Image on Trade Flows and Welfare," Management Science, INFORMS, vol. 68(10), pages 7555-7596, October.
    18. Afesorgbor, Sylvanus Kwaku, 2019. "The impact of economic sanctions on international trade: How do threatened sanctions compare with imposed sanctions?," European Journal of Political Economy, Elsevier, vol. 56(C), pages 11-26.
    19. Rangan Gupta & Giray Gozgor & Huseyin Kaya & Ender Demir, 2019. "Effects of geopolitical risks on trade flows: evidence from the gravity model," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 9(4), pages 515-530, December.
    20. C. Umana Dajud, 2013. "Political Proximity and International Trade," Economics and Politics, Wiley Blackwell, vol. 25(3), pages 283-312, November.
    21. Seitz, Michael & Tarasov, Alexander & Zakharenko, Roman, 2015. "Trade costs, conflicts, and defense spending," Journal of International Economics, Elsevier, vol. 95(2), pages 305-318.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palcom:v:11:y:2024:i:1:d:10.1057_s41599-023-02525-w. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: https://www.nature.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.