Empirical Analysis of the Effect of Mainland China on International Trade of Primary and Technology Industries and the Effect of RMB on Exports of Mainland China: An Application of the Gravity Model

• Main Authors: Ying-Chih Sun, 孫英智
• Other Authors: Chin-Hwa Sun
• Format: Others
• Language: zh-TW
• Published: 2005
• Online Access: http://ndltd.ncl.edu.tw/handle/72116163423607606386

碩士 === 國立臺灣海洋大學 === 應用經濟研究所 === 93 === This thesis consists of two essays that employ global trade data in the WTA Database to investigate the following two topics, (1) the effect of Mainland China on the trade flow of primary industry and technology industry and the effect of Mainland China on its’ structure change from 1985 to 2000, and (2) the impact of RMB appreciating on the import and export of Mainland China based on the setting of Purchasing Power Parity in the trade gravity model. The first topic of essay examines the differences between the growth of trade flows of primary and technology industry in Mainland China, by utilizing the Gravity Model to show how intensive will the previous 5 year’s under-going trade-partnership will influence the trade flow of primary and technology industry five years later. First of all, the trade-partnership is identified based on the cluster analysis of the trade flow between each country. According to the result from the cluster analysis of primary industry, there is a double-blocks phenomenon with China is in the core of the Pacific cluster since 1985 to 2000 and there is a single-block phenomenon with China entering into the core of the cluster after 2000. The result of the gravity model shows that China had gain a significant gravity effect on the trade flow from 1995 to 2000 in both the primary and technology industry. The result provides the evidences that Mainland China plays a more important role in global trade than before. The second essay tries to estimate the impact of appreciating of RMB on export and import of Mainland China with the global trade data in 2002. The purchasing power parity variable is introduced to specify the export gravity model and to simulate the impact of appreciating of RMB. The estimation results show that if the exchange rate for those countries is under elucidate intermediated and floating exchange rate regimes, the export trade is lower than the export of the other countries, which is under the fixed exchange rate regime. By simulating the effect of RMB appreciation on the export of Mainland China, a 10% and 20% appreciation will decline the export of Mainland China for 0.45% and 0.96% in average, respectively. In the meanwhile, the import of Mainland China will increase 0.74% and 0.96%, respectively, and the balance of trade will experience a decline of 11.61% and 24.62%, respectively, in average.