Trade between China and 45 African countries: does the Gravity Model matter?

Abstract

The population of Africa and that of China put together amounts to a little over one-third of the world's total. The theoretical justification of the gravity model is applied to analyze the factors influencing bilateral trade between China and African countries using the panel data regression technique, covering the period between 2002 and 2021 and with special consideration for the income level of the African countries. Empirical results and estimates reveal that the economic size as well as the population of trade partners positively affect China’s trade with 45 African countries. The positive impact that distance has on trade is inconsistent with previous research. We conclude from the analysis that the factors affecting trade between China and African countries are, namely, the size of the population, the economic size represented by the GDP, and the distance between the countries. The indication of effects on the trade sector is important, and the sensitivity of the potential product to distance and countries varies considerably, giving a revealed comparative advantage. African countries should diversify their exports and improve their trade diplomacy.