Qureshi ppt parallel5 4

Slide1 : Trade Dynamics of China and India: Challenges and Opportunities Mahvash Saeed Qureshi Trinity College University of Cambridge and Guanghua Wan United Nations University World Institute of Development Economics Research The Eighth Global Development Network Conference Beijing, January 14-16, 2007


Presentation Outline : I. Introduction II. China and India: the New Asian Tigers III. Trade Structure of China and India IV. Potential Trade Competition & Complementariy V. Dynamics of Trade Competition VI. Conclusions and Policy Implications Presentation Outline


I. Introduction : China and India: emerging global economic players High economic growth rates Rapidly rising share in world exports Large inflows of foreign investment Engines of demand growth in commodities Positive demographics I. Introduction The new Asian drivers: threat or opportunity?


Introduction (cont.) : Introduction (cont.) Potential Trade Impacts ‘Complementary Effect’ ‘Competitive Effect’ in third markets ‘Competitive Effect’ in domestic markets Key Factors Similarity of export structures Complementarity of export-import structures Flexibility and speed of adjustment


Introduction (cont.) : Earlier research… Focus on China Impact on specific geographical regions Goals of the paper Comparative analysis of trade of China & India (Chindia) Assess trade competition & complementarity between Chindia Assess trade competition & complementarity with other regions Examine dynamics of trade relationships Important lessons to be learnt Introduction (cont.)


II. The New Asian Tigers : II. The New Asian Tigers Figure 1: Average annual export, import and GDP growth (1990-2004)


The New Asian Tigers (cont.) : The New Asian Tigers (cont.) Table 1: Share of imports from the Asian tigers in total imports (%) Source: Authors’ calculations based on IMF (2006a).


III. Trade Structure of Chindia : Table 2: Leading sectors in merchandise exports of China (%) Source: www.intracen.org III. Trade Structure of Chindia


Trade Structure (cont.) : Table 3: Leading sectors in merchandise exports of India (%) Source: www.intracen.org Trade Structure (cont.)


Trade Structure (cont.) : Trade Structure (cont.) Table 4: Competitiveness in exports: world market share and rank (2003)


Trade Structure (cont.) : Trade Structure (cont.) Figure 2: Chindia’s self-similarity dynamics Similarity measure = Pearson correlation coefficient = Dynamics of trade structure and specialisation


Trade Structure (cont.) : Trade Structure (cont.) Figure 3: RCA Indices of China (2-digit SITC) Figure 4: RCA Indices of India (2-digit SITC)


Trade Structure (cont.) : Trade Structure (cont.) Figure 5: Intra-distributional dynamics: Kernel density estimates (3-digit SITC) (i) China (ii) India


Trade Structure (cont.) : Trade Structure (cont.) Figure 6: Galtonian regression results (3-digit SITC) Table 5: Overall specialisation in 2003 (3-digit SITC) (i) China (ii) India


IV. Trade Competition & Complementarity : Data UN’s COMTRADE database Product categories at three-digit level of Standard International Trade Classification (SITC) Sample 52 countries from Africa, Asia, Europe, Latin America, North America 262 product groups Time period: 1995-2003 IV. Trade Competition & Complementarity


Slide16 : Competition & Complementarity (contd.) Coefficient of specialisation (CS) = share of nth good in the exports of country i in time period t = share of nth good in the exports of country j in time period t Trade Complementarity Index (TCI) = share of nth good in the imports of country i in time period t (0 ≤ CS ≤ 1) (0 ≤ TCI ≤ 1)


Slide17 : China and India Figure 7: Export competition between Chindia (1995-2003) Competition & Complementarity (contd.)


Slide18 : Export competition with other countries Figure 8: Export Competition between China and other countries Source: Authors’ calculations Competition & Complementarity (contd.)


Slide19 : Figure 9: Export Competition between India and other countries Source: Authors’ calculations Competition & Complementarity (contd.)


Slide20 : Table 6: Trade complementarity index between China and other countries Source: Authors’ calculations Competition & Complementarity (contd.)


Slide21 : Table 7: Trade complementarity index between India and other countries Source: Authors’ calculations Competition & Complementarity (contd.)


Slide22 : Dynamics of Trade Competition Table 8: Empirical results for trade indices of China Notes: *, **, *** indicate significance at 10%, 5% and 1% levels, respectively; constant included in all specifications.


Slide23 : Dynamics of Trade Competition Table 9: Empirical results for trade indices of India Notes: *, **, *** indicate significance at 10%, 5% and 1% levels, respectively; constant included in all specifications.


VI. Conclusion : Chindia experiencing change in export composition & RCA China tough competitor for India, East Asia, Mexico, Western Europe, USA India tough competitor for Neighbouring South Asian countries Potential for expanding trade… China and India East Asia, Europe and USA in manufactures Latin America and Africa in resource based commodities VI. Conclusion


Conclusion (cont.) : Lessons for the developing countries Human capital Productivity and efficiency Increasing saving and investment Improving infrastructure Improving business climate Conclusion (cont.) Work in progress Econometric analysis of trade impacts Including the services sector


Slide26 : Thank You!