In the context of the “Belt and Road” strategy, Central Asia is the first stop of China in the “Silk Road Economic Belt”, and its important strategic position is self-evident. Carrying out international trade with Central Asian countries will not only benefit infrastructure construction, interconnection and regional economic development in the western region of China (especially Xinjiang), but also bring out the complementary advantages of China and the five Central Asian countries to realize Mutual benefit, win-win trade. This article mainly analyzes the prospects of China-Central Asian trade cooperation from the basic conditions of factor endowment, demand structure, and terms of trade of each country, and finds that the demand structure of Kazakhstan and China is closer, and the space for China-Kazakhstan trade cooperation may be greater. According to the analysis of the terms of trade of various countries, it is known that except for Kazakhstan, the terms of trade of the other five Central Asian countries have deteriorated to varying degrees. They have a strong need to change this dilemma. This is the implementation of the “Belt and Road” strategy and Central Asia. Subjective reflection of objective requirements for common prosperity of regional economies.
1. The “Belt and Road” Strategy and Central Asian Choices
In September and October 2013, General Secretary Xi Jinping proposed the strategic ideas of the “Silk Road Economic Belt” and “21st Century Maritime Silk Road” during his visits to Central Asia and ASEAN countries. The “Belt and Road” strategy involves nearly 60 countries including Northeast Asia, Southeast Asia, South Asia, West Asia and North Africa, Central and Eastern Europe, and Central Asia. It is committed to establishing and strengthening partnerships among countries along the route, exploring the potential of regional economic markets, and promoting interregional investment. And consumption, increase employment in various countries, promote people-to-people and cultural exchanges, and achieve mutual aid and harmonious development of trade. With the development of trade globalization, the scale of cooperation between China and Central Asia on trade products and services has continued to expand, and the construction of relevant trade mechanisms and systems has been continuously improved. However, due to the depths of Central Asian countries in the hinterland of Eurasia, the natural environment is relatively harsh The relatively backward economic development level and relatively poor political stability have caused China and the five Central Asian countries to have insufficient depth and breadth in the field of trade cooperation. The “Belt and Road” strategy has followed the common aspirations of the peoples of all countries for the development of the economy and deepened the trade partnership between China and the five Central Asian countries, opening a new path.
There are many areas in Central Asia’s international trade cooperation, and the trade policies of different countries are not the same. The disputes over the distribution of interests among countries in the field of international trade tend to be bullish. Free trade and trade protection policies are difficult to determine. From the perspective of international economics, based on the standpoint of improving the economic welfare of various countries, this article analyzes the benefits of extensive economic and trade cooperation, the advantages and benefits of various countries from the perspective of factors such as factor endowments, demand structures, and terms of trade. The distribution situation and suggestions on China’s trade policy.
2. Status of factor endowment, demand structure and terms of trade between China and the five Central Asian countries
A. Factor endowment and complementary relationship between China and the five Central Asian countries
The “Lack of Theorems of Relative Factors” in the Olympian system, namely the Heckscher-Olympian model (HO model), considers that the differences in factor endowment between the two parties in trade are the source of the comparative advantages of countries, and countries with relatively abundant capital export capital-intensive commodities. When importing labor-intensive goods, countries with relatively abundant labor export labor-intensive goods and import capital-intensive goods, so that both parties can benefit from it.
In 2019, the capital-labor factor ratios of China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan were 2981, 3601, 427, 195, and 477 (USD / person). The capital-labor ratio in Kazakhstan was significantly higher than in other countries. China ranks second. According to the HO theory, compared with Ding Kazakhstan, other countries are D-labor-rich countries. They have a comparative advantage in cattle production of labor-intensive products. According to the “relative lack of factors” the Kazakhstan should export capital to other countries. Intensive goods, while importing labor-intensive goods, while other countries should determine the type of products exported and imported to each country according to the rank of their capital-labor ratio. This is the result of theoretical derivation, but it is not entirely true. Kazakhstan’s economy is dominated by oil, natural gas, mining, coal and agriculture and animal husbandry. The processing industry and light industry are relatively backward. Most daily consumer goods rely on imports, and they mainly export mineral products, metals and their products. The situation in China is different. China’s oil and gas resources and mineral resources are scarce, it is difficult to meet domestic demand, and it has a high dependence on foreign countries. In addition, China is facing problems such as overcapacity and excess foreign exchange assets, and urgently needs to stimulate economic growth through foreign investment. This shows that China and Kazakhstan have strong complementarities with the same endowments, and China-Kazakhstan cooperation can give play to the advantages of each country’s elements to achieve mutual benefit and win-win results. Looking at Central Asian countries other than Kazakhstan, their capital-labor endowment ratios are all relatively low. Compared to China, China is a capital-rich country, and Central Asia (except Kazakhstan) is a labor-rich country. China’s export of capital goods and imported labor products will increase the welfare of both parties, and the “Belt and Road” strategy can build a good platform for this.
B. Demand Structure of China and Five Central Asian Countries
Lindel believes that the factor endowment theory can only explain the international trade model of primary products, and the types, scope, and flow of trade in T-products between countries are determined by the needs of each country. Lindel’s similarity theory of demand preference mainly includes the following three aspects: First, it is assumed that the products of cattle produced by a country’s enterprises are firstly conditioned to meet the domestic market demand, and secondly, they are considered for export to the international market to meet the international market demand; The second factor is the per capita income level. The third factor is that the more similar the demand structure, the greater the trade in cattle production. In 2019, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan had GNI per capita of 3567, 4738, 603, 477, and 921 U.S. dollars. China and Kazakhstan have similar national per capita income levels. According to Lindel ’s “demand preferences are similar “Theory” indicates that the demand structure of China and Kazakhstan is relatively similar. The more similar the product structure of the two countries is, the easier it is to produce overlapping demand for cattle, which results in a larger trade volume for cattle production. To implement the “Belt and Road” initiative, we must first connect Central Asia. Among the five perimeters of Central Asia, Kazakhstan’s economic situation has great similarities with China, and more trade interests are available to establish and strengthen China-Kazakhstan friendly trade. Relations are an important measure to promote prosperity in Central Asia.
C.Status of Trade Terms between China and Central Asia
Terms of trade are usually defined as the ratio of the price of a country’s export goods to the price of its imports, and it represents the ability of a country’s goods to exchange goods with each other. If a country’s exports can be exchanged for more imports, the terms of trade will improve, otherwise it will worsen. It can be seen that the terms of trade essentially reflects how the benefits of trade are distributed among countries. Terms of trade are usually measured by the ratio of a country’s export commodity index to import commodity index within a certain period of time. If the terms of trade is greater than 1, it means that the terms of trade have improved, and Xiaoding 1 means that the terms of trade have deteriorated. In 2019, China, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan had terms of trade of 1.0, 1.9, 0.6, 0.2, 0.7, and 0.5, respectively. Except for China and Kazakhstan, the terms of trade of other countries were different. Degree of deterioration. Among them, Tajikistan ’s terms of trade have deteriorated the most, and it urgently wants to change this situation through the “Belt and Road” strategy. Tajikistan ’s President Rahmon stated that Tajikistan hopes to actively participate in the construction of the Silk Road Economic Belt and make use of the two China’s complementary advantages. Recently, China has comparative advantages in industry, technology, capital and markets, and can conduct two-way foreign investment cooperation with Central Asian countries. Not only can China invest and set up factories in Central Asian countries, but it can also help its products enter the vast Chinese market. China and the five countries in Central Asia have different endowments, different levels of development, and strong complementarity. The construction of the “Belt and Road” will help China and the five Central Asian countries further develop their respective comparative advantages and promote the orderly and free flow of factors in the region. Efficient resource allocation.
Prospects for China-Five Central Asian Trade Cooperation
The five Central Asian countries are located in the hinterland of the Eurasian continent. They are extremely rich in minerals, land and species resources, with a total population of 59.29 million, and have huge market consumption potential. The prospects for trade cooperation between China and the five Central Asian countries are quite broad. Comprehensive cooperation can be carried out in many fields such as energy, transportation, science and technology, tourism, investment, and information and communication. Through the “Belt and Road” strategy combined with the western development strategy, China can support and help Central Asian countries make full use of resources and land advantages to develop their economies, improve people’s living standards, and promote the continuous development of good-neighborly and friendly relations, and promote border stability and prosperity . In terms of trade policy, due to the lack of funds, technology and management in Central Asian countries, in order to encourage Chinese enterprises to invest in Central Asia, it is recommended that the Chinese government allocate special funds to support Chinese enterprises to invest and set up factories in Central Asian countries, and establish processing of overseas cattle products. The base grants preferential policies to overseas-invested enterprises in terms of auditing, financial services, and customs clearance. In addition, it is necessary to implement differentiated foreign economic and trade policies according to the different economic conditions of the Central Asian countries. Through the analysis of this article, Kazakhstan is different from other Central Asian countries in terms of economic endowment, terms of trade, etc. It is different from other Central Asian countries. This determines the differences in Central Asian countries ’trade needs. Therefore, we should combine The actual national conditions of the five Central Asian countries take into consideration the adjustment of foreign trade policies to meet the different needs of countries and achieve economic growth and prosperity of each country.