Volume, Effects and Determinants of China’s Trade Cost

Trade costs are increasingly becoming a key factor in international economics and trade.Traditionally,trade costs are estimated with theoretical models,which may lack of micro-data foundation and are based on the symmetry assumptions even difficult to obtain data.This study employs the models which can overcome the above shortcomings to estimate the trade cost between China and her major trading partners,as well as the contribution and its determinants of the trade cost to China’s trade growth.The outcome indicates that from 1980 to 2007,the trade cost between China and her major trading partners has dropped by nearly half,the contribution of trade costs to China’s trade growth averages 60%,and the factors affecting the trade cost includes the income of the trading partners,tariff levels,geographical location,economic integration,and so on.