A gravity analysis of China’s export growth

In the past decade, China experienced rapid growth in its export trade. This paper explores the major factors affecting China’s exports. This paper conducts a gravity analysis based on the export of goods from China to 30 OECD countries between 1999 and 2005. The empirical results indicate that the traditional explanatory variables, GDP per capita and population, have strong and significant effects on China’s export trade, while physical distance and remoteness have negative effects as expected. Moreover, the empirical results also demonstrate that trade cooperation applies significantly positive effects on the export trade. Two other explanatory variables, regional economic organization APEC (Asian Pacific Economic Cooperation) and the exchange rate, do not significantly affect China’s exports.