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WHAT DETERMINES TRADE BETWEEN CHINA AND INDIA DURING THE RECESSION OF 2008–2012?
Author(s) -
Zhang Jianhong,
van Gorp Désirée,
Ebbers Haico
Publication year - 2019
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/coep.12282
Subject(s) - china , economics , comparative advantage , international trade , great recession , international economics , bilateral trade , global recession , trade barrier , revealed comparative advantage , recession , geography , macroeconomics , archaeology , keynesian economics
Despite the international status of China and India rising dramatically in the previous decades, trade between the two countries did not grow accordingly. This paper investigates the determinants of the bilateral trade performance during the period of 2008–2012 from two perspectives: comparative advantage and trade protection. Two cases, Chinese exports to India, and Indian exports to China, are analyzed by using product‐level data. The results suggest that (1) the law of comparative advantage and trade protection explain the pattern of China–India trade, while (2) in a time of crisis, the adverse forces become prominent which explains the declining trend of the bilateral trade. ( JEL F13, F14)