An Assessment of Trade Facilitation’s Impacts on China’s Forest Product Exports to Countries Along the “Belt and Road” Based on the Perspective of Ternary Margins

Abstract

With the reduction of traditional tariff and non-tariff trade barriers, trade facilitation measures, such as improved port efficiency and the customs environment, have become increasingly important for improving the structure of export growth and exploring the trade potential of forest products. Our research divided China’s export growth of forest products into extensive margins (variety), quantity margins (quantity), and price margins (quality), and discussed how trade facilitation impacted China’s forest product export growth structure from the perspective of ternary margins. An evaluation system of trade facilitation was constructed, and principal component analysis was used to measure the levels of trade facilitation of 13 countries which had large trade flows of forest products with China along the “Belt and Road”. In addition, we used transnational panel data and the extended gravity model to analyze the impact of their trade facilitation on the ternary margins of China’s export growth. In order to overcome the endogeneity of the model, the 2 stage least squares (2SLS) method was used and the first-order lags of trade facilitation indicators were selected as instrument variables. The decomposition results of ternary margins showed that the “low price and high quantity” export growth pattern had remained in China’s forest products trade, and the 2SLS regression results indicated that the improvement of trade facilitation had a significantly positive impact on the quantity margins and price margins, but no significant impact on the extensive margins. It is suggested that China should make differentiated investments to countries along the “Belt and Road” based on their different levels of trade facilitation, in order to promote constant improvement of product quality and optimization of export growth structure in the forest products industry.