China-ASEAN trade relations: A study of determinants and potentials

Abstract

The purpose of this study is to investigate the development and determinants of China-ASEAN trade relations over the period of 2000-2018. Employing both the qualitative and quantitative approaches, the results show that the trade relations between China and the Association of South East Asian Nations (ASEAN) have remarkably developed and rapidly grown over times, with a significantly important concentration on the segments of high technological and medium technological products. We also find that China's economic scale is crucially impacting on the China-ASEAN trade relations under both the aggregate and sub-sector level. It is interesting to notice that there is no evidence to support accession to the World Trade Organization (WTO) and officially forming of ASEAN-China Free Trade Agreement (ACFTA) to enhance trade relation between both sides. The findings also quantitatively indicate that there is much significant potential for the expansion of mutual trade between China and some members of ASEAN such as Brunei, Laos and Malaysia, while less potential is predicted for other members of ASEAN. It is strongly suggested that China and ASEAN should find a new proactive approach and make more efforts in improving the mutual political trusts to enhance trading activities in the coming years.