The Impact of Regional Trade Agreements on Trade The Case of China

This article studies the impact of regional trade agreements (RTAs) on China's exports and imports with others in seven RTAs. Gross domestic product (GDP), population, distance, land area, and exchange-rate variables are studied as determinants in the gravity model, with the introduction of additional RTA variables to capture intraregional trade, extraregional trade, and outside-region trade. Distance and land area are estimated by using constant numbers, and adjusted by GDP share or import price index. The results show that the formation and implementation of regional trade agreements have positively or negatively affected China's trade with other trading partners when they are or are not a member of an RTA.