An RCA Analysis of India–China Trade Integration

Imran Ahmad, Mohd Hussain Kunroo and Irfan Ahmad Sofi

Foreign Trade Review, 2018, vol. 53, issue 1, 49-58

Abstract: The present study discusses the short- and long-run trade patterns of India and China. Applying revealed comparative advantage (RCA) and bilateral RCA, this study specifically tries to find out the pattern of exports and areas of specialization of the economies under study. Major findings suggest that both the countries have been performing well, in terms of merchandise trade exports, over the past few decades, especially since 2000. The export-performing behaviour of India and China with each other, as well as with the world, is seen quite general in nature. In other words, irrespective of their institutional and structural differences, both India and China maintain almost the same upward moving trend with respect to the flow of exports between them and that with the world market. However, once we go from Standard International Trade Classification (SITC) two-digit to SITC four-digit level of analysis, the sample economies reveal their specialized products. At the disaggregate level, India’s export basket is void of food products and raw materials, and it generally contains engineering goods and technologically driven products as advantageous products. The study finds that the areas of specialization are much wider, and the technology-embedded products are larger for China as compared to India. JEL: F10, F11, F43

Keywords: India and China; trade integration; product specialization; exports; RCA (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:sae:fortra:v:53:y:2018:i:1:p:49-58

DOI: 10.1177/0015732516681885

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