The Dynamics of T&C Export Performance Between China and Other Asian Countries: Implications for BRI Development

This paper employs the gravity model to investigate how the growth of China’s textile and clothing (T&C) exports is dominating the exports of other Asian developing countries over the 1990–2015 period. Aggregate analyses were undertaken, and the endogeneity of Chinese exports were accounted by applying instrumental variables with country fixed effects. It was found that there was a negative impact of China’s emergence on T&C exports on other Asian developing countries. We further explored whether such displacement effect varies across Asian countries and the results showed that a more pronounced effect was found in low-income countries than high-income ones. Our findings suggest that the export competitiveness of China’s neighbors, i.e. both more and less developed Asian countries, are affected by the emergence of China in T&C Trade. However, China’s Belt and Road Initiative (BRI) warrants further research to suggest that once the Initiative goes into full force, collaborative opportunities are available between China and other Asian developing counties. The implications of China’s BRI are also discussed.