China Integrates Asia with the World: An Empirical Study

Soumyananda Dinda ()

MPRA Paper from University Library of Munich, Germany

Abstract: The paper focuses on China’s economic integration with Asia region and the world. It also attempts to find the long run relation with short run dynamics of China’s trade in Asia and the world. The augmented Dicky-Fuller (ADF) and Phillips-Perron (PP) methods are applied to test the time-series properties of the variables. Co-integration technique is used to detect the economic integration of China’s export to the US and its import from Asian nations using monthly aggregate data from December 2005 to July 2010. This study observed that empirically China’s export to the US depends on exchange rate and China’s import from Asia depends on China’s export to the US. China has double role in international trade – (i) China acts as an attractor of all inputs from Asia and (ii) China exports the final products in international market. This study also reveals that the speed of China’s import from Asia is faster than that of China’s export to the US. The results imply that China’s trade should be treated as an engine of growth in the Asian developing countries and the trade promotion policies should be encouraged. The emerging China will create other opportunities through trade integration with Asia and the world. China is economically integrated with region and the world. The paper contributes to measure the speed of China's export and import within Asia and the world. These empirical findings will help policy makers to formulate their policy and design the mechanism for application as per their targets.

Keywords: Economic Integration; production network; Co-integration; Asia; China; the US; ECM; Engine of Growth; Export; Import; Long run; Short run dynamics. (search for similar items in EconPapers)
JEL-codes: C22 C52 F2 F4 F5 N95 R12 (search for similar items in EconPapers)
Date: 2012-07, Revised 2014-11-08
New Economics Papers: this item is included in nep-int and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published in Journal of Chinese Economic and Foreign Trade Studies 2.7(2014): pp. 70-89

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Journal Article: China integrates Asia with the world: an empirical study (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:63952

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