By Zhifei Yang, Ruotong Guan, Xinya cai, Yiling Lu
As an inland province in western China, Guizhou is relatively backward in foreign trade compared with other big foreign trade provinces. In recent years, Guizhou province has been committed to developing the international market and foreign trade. Since 2019, Guizhou’s GDP has grown rapidly, with the total value of imports and exports of goods reaching 45.357 billion yuan. However, as the novel coronavirus, also known as COVID-19, has been widespread around the world. It has significantly impeded the pace of the development of international trade in Guizhou Province. This essay is to offer an analysis of the change, on international trade, that results from COVID-19. We explore the issue by using the difference in differences model to achieve an accurate answer, calculating the exact value of change on the trade.
By consulting relevant data of Guizhou, it’s believed that Guizhou had a poor performance on international trade; however, after the epidemic period, we surprisingly find that its export soars up notably. Some scholars claim that the phenomenon exists owing to the new way to deal with official affairs. Specifically, although the virus spoils the operation of the traditional way to solve official business, people soon come up with a new method that is even more efficient than before. Meanwhile, there is an opportunity, gains more revenue through sharing platforms in global, for Guizhou in such a case.
Data and Strategy
All the data, retrieved in the paper is mainly from the Guiyang Customs Official Website, covers the exact amount of exports and imports in Jan, Mar-June 2019, and Jan, Mar-June 2019. The picture below presents all the factors that we use during the process of analyzing.
In the picture, the capital “I” represents the amount of import in Guizhou (hundred million) and the capital “E” represents the number of exports in Guizhou (hundred million). As for “COVID”, it means that whether the epidemic exists or not. Besides, “TimeTrend” is used to measure the time trend. Finally, We can get the product of COVID and TimeTrend by observing the variable CT.
Results and explanations
Model 1 (the impact of COVID-19 on the exports of Guizhou)
E = 25.87 + 6.03COVID + 103.71TimeTrend + 4.00CT + ei
From the information list above, we find that R-squared is 0.6426, which can be considered to be enough to demonstrate that The COVID-19 can impact the foreign trade of Guizhou. The P ＞| t | of COVID is 0.920, greater than 0.05, indicating that COVID is not significant; the P ＞| t | of TimeTrend is 0.064, indicating that the time trend is significant; the P ＞| t | of CT is 0.953, which shows that under the same conditions of other factors, affected by the domestic epidemic situation, the amount of export in Guizhou increase by 0.4 billion yuan from 2019 to 2020.
Model 2 (impact of COVID-19 in the imports of Guizhou)
I = 8.17 + 3.63COVID + 43.98TimeTrend – 25.42CT + ei
From the information list above, we find that R-squared is 0.71, which can be considered to be enough to demonstrate that The COVID-19 can impact the foreign trade of Guizhou. The P ＞| t | of COVID is 0.85, which bigger than 0.05, indicating that COVID is not significant; the P ＞| t | of TimeTrend is 0.023, indicating that the time trend is significant; the P ＞| t | of CT is 0.262, which shows that under the same conditions of other factors, affected by the domestic epidemic situation, the amount of import in Guizhou decrease by 2.5 billion yuan from 2019 to 2020.
Integration of digital technology with traditional industries
COVID-19 has had a negative impact on Guizhou’s foreign trade, however, the demand for telecommuting, distance education, telemedicine, and remote finance in many industries has become prominent, and the cloud video market is gradually heating up, which drives the overall structure of service trade to optimize. In order to maintain Guizhou’s GDP growth, Guizhou can start to develop in this direction. The application of digital technologies has revolutionized the process of cross-border cooperation in production services and provided new delivery methods through digital platforms and physical equipment, which will not only greatly improve the ability of trade for China’s service industry, but also drive the growth of trade in digital services, software and information services.
All in all, the epidemic does have affected the international trade of Guizhou negatively; nevertheless, it also brought some new opportunities. As the statistics of the cities in Guizhou province, we can identify that the export trade of Guizhou province still increases 0.4 billion during the epidemic. Guizhou’s high-tech products and cloud services technology increased against the trend, which may be a new opportunity for Guizhou’s foreign trade.
School of Big Data Application and Economics, “Epidemic Prevention and Control and Local Economic Development” Viewpoint Series No.10: The impact of COVID-19 on foreign trade in Guizhou Province and countermeasures. (2020, March 17).