Abstract

Zhan Jingang, Eric Yaw Naminse*, Cheng Jia and Zhan Manlin

This study explores the trade relationship between Guangxi province and ASEAN countries under the China-ASEAN Free Trade Area (CAFTA) agreement. We used the gravity model of trade and econometric regression model to carry out the study with data obtained from 2002 to 2018.

The empirical results show that the trade relation between Guangxi province and ASEAN countries has significant growth and different characteristics at different stages. The results also show that GDP of ASEAN countries, FDI of Guangxi province and population of Guangxi province have positive and significant effects on trade. In particular, Guangxi’s FDI is identified as one of the factors which helps to promote trade relations between Guangxi province and ASEAN countries, and has a positive correlation coefficient of 0.207 at the 5% significance level. Based on the findings, we suggest that; first, Guangxi province should increase the import of products from ASEAN countries to maintain its trade balance and promote economic development; second, Guangxi province needs to strengthen its market development in Indonesia, Thailand and Philippines on the basis of existing cooperation with Vietnam, Singapore and Malaysia; and finally, the distance between Guangxi province and ASEAN countries which tend to hinder the development of bilateral trade should be improved through infrastructural development.