The development of trade between EU and China : under the influence of economic integration

Abstract:   European Union andChinaare very important economic entities in the world. Trade between them has quite a long history and affects the world trade enormously. The appearance of economic integration in the worldwide influences international trade largely and the influence is becoming bigger and bigger. The integration ofEuropeaffects trade between these two big entities, too. As there’re a few researches about this topic, this paper is going to study what may happen to trade betweenChinaand EU under the influence of economic integration ofEurope. Firstly, I show the history between these two entities to make the background clear. Secondly, I represent some important theories about international trade. Then by using Krugman’s new trade theory, I analyze current situation of trade between them. After that, I introduce economic integration in detail. At last, with the help of Panel Cointegration and Vector Error Correction Model built by Zhang Bin and Yang Yong, I get my conclusion about the future of trade between China and EU: Economic integration of Europe has a negative influence on trade between China and EU, but the influence is not strong enough to change the pattern of today’s trade. Trade pattern betweenChinaand EU will go on developing.