Empirical Study on the Potential of China-Russia Bilateral Services Trade in the Context of the Opening of the Arctic Route

Abstract

To tap the potential of China-Russia bilateral services trade under the background of the opening of the Arctic route, this paper quantitatively analyzes the overall development situation of services trade, trade structure, and competitiveness of China and Russia, and adopts a trade gravity model to conduct an empirical study on the potential of China-Russia bilateral services trade. Unlike previous studies, this paper measures the cost distance and introduces new variables (population size, whether to join the free trade agreement) and then puts forward extended trade gravity models for empirical research, thereby estimating the potential coefficient of China-Russia bilateral services trade and making policy recommendations. Results show that the bilateral services trade between China and Russia has a strong development momentum and belongs to the type with great potential. The services trade structure of China and Russia is not reasonable and is in a disadvantaged position in the global competition. Promoting inter-regional cooperation between China and Russia represented by“Northeast and Far East” will reduce the distance cost, thus promoting China-Russia maritime services trade cooperation; COVID-19 has hindered the development of traditional services trade, while it has promoted the development of Internet-based emerging services trade, thereby promoting the transformation and upgrading of services trade structure.

Keywords

• arctic shipping routes
• services trade potential
• extended trade gravity model
• trade competitiveness