South‐South cooperation: is there a foundation in trade?
| DOI | https://doi.org/10.1108/17544401011084307 |
| Published date | 05 October 2010 |
| Date | 05 October 2010 |
| Pages | 221-234 |
| Author | Xiaodong Lu,Ronglin Li |
| Subject Matter | Economics |
South-South
cooperation
221
Journal of Chinese Economic and
Foreign Trade Studies
Vol. 3 No. 3, 2010
pp. 221-234
#Emerald Group Publishing Limited
1754-4408
DOI 10.1108/17544401011084307
South-South cooperation: is there
a foundation in trade?
Xiaodong Lu
Lingnan College, Sun Yet-sen University, Guangzhou, China, and
Ronglin Li
Institute of International Economics, Nankai University, Nankai, China
Abstract
Purpose – The purpose of this paper is to examine the trade relationship between China and other
developing countries, analyze the regional structure and the commodity composition, and give policy
advice to promote economic and trade ties between them and then investigate the trade foundation of
South-South cooperation.
Design/methodology/approach – The approach takes the form of a statistical and quantitative
analysis of trade flows. Some creative indicators are designed to measure the competitiveness and
complementarities existing between China and developing countries. The sample of the study
comprises 165 developing countries excluding those newly industrialized economies such as
Singapore, and South Korea.
Findings – Developing countries are very important trade partners of China as a whole and trade
with them has increased relatively fast in the last ten years. The pattern of trade shows that China
has a complement in trade with most of developing countries although competitiveness exists in
certain countries and some products. This close trade relationship laid a solid foundation for broader
practice in South-South cooperation including foreign direct investment.
Practical implications – China urgently needs to build a closed connection with other developing
countries. The Going Out strategy provides an opportunity for Chinese firms to capture the
international market and resources, and also for other developing countries to increase their domestic
capital and production capability.
Originality/value – The paper assesses the trade relationship between China and other developing
countries from a distinct perspective: South-South cooperation. The findings are useful for
policymakers to enhance South-South cooperation and jointly face up to the challenges brought about
by globalization.
Keywords China, Developing countries, International trade
Paper type Research paper
1. Introduction
With rapid economic growth, China’s foreign trade expands very fast during the last
decades and now still increase dramatically.This makes China become a big player in the
world trade and arise great concerns among developed and developing countries. As
China’s traditional and important trade partners, developing countries are playing an
increasingly important role in China’s foreign trade (Eichenggreen and Douglas, 1998).
The impact of China’s emergence on other developing countries is just beginning to be
appreciated (Eichengreen and Tong, 2007; Lopez et al., 2005). As a latest contribution,
Hanson (2007) used the gravity model of trade to examine the impact of China’s growth
on the demand for exports in developing countries that specialize in manufacturing.
China’shigh degree of specialization in manufacturing makes its expansiona potentially
significantshock for other countries that arealso manufacturing oriented.
Partly different from the literatures mentioned above, the paper tries to analyze the
trade relationship between China and other developing countries from the perspective
of South-South cooperation. As a developing country, China has thrown itself into
advocating the South-South cooperation and has always been an active participant. In
such background, is there a trade foundation for South-South cooperation? To answer
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