Empirical Study on Bilateral Trade Cost Change and Its Impact in China

Trade cost is important factor hampering the global trade liberalization,meanwhile,is one of the key issues in international trade field.By a modified gravity model,this paper measures the bilateral trade cost between China and its main trade partners,and also analyzes its effects on the bilateral trade volume.The results show an overall downward trend of bilateral trade cost,which is also a key factor to bilateral trade volume growth.Since China's entry into WTO in 2001,the decline of bilateral trade cost has accelerated a lot,contributing to a more significant growth of bilateral trade volume.This paper also examines the influence of multilateral trade on bilateral trade cost,and the empirical analysis shows that China's multilateral trade does not have negative effect on the bilateral trade.