Journal de Stock & Forex Trading
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Importance of Trade Integration and Trade Complementarity Inflow on the Relationship between China and Europe and Central Asia

Umer Shahzad, He Xiaoyin*

The study aim is to investigate the industrial, agricultural, and technological bilateral trade relationship between China and the Europe and Central Asia region over the period of 2000to 2019 by employing the Revealed Comparative Advantage index (RCA export), Trade Complementarity Index (TCI), and Trade Integration Index (TCD). The estimated results show that there is a strong bilateral trade relationship between China and Europe and Central Asia. The estimated results of the Trade Complementarity Index (TCI) indicate that between 20 industries, 17 have strong TCI, which show that the exports and imports between China and Europe and Central Asia are matched; only three of the industries, which are vegetable, fuels, and minerals are not strongly matched; the Trade Integration Index (TCD) between China and Europe from 2000 to 2019 is less than 1 which explains that the trade integration index between China and Europe is weak, which indicates that Chinese trade does not depend strongly on Europe and Central Asia; Additionally, the estimated results of the Revealed Comparative Advantage index (RCA export) between China and Europe show that there is a strong revealed comparative advantage between China and Europe for all 20 industries.Abbrevations: TII: Trade Intensity Index; RCA: Revealed Comparative Advantages; TCI: Trade Complementarity Index; TCD: Trade Integration Index; GDP: Gross Domestic Product