The Relationship between China's Inter-Provincial Trade Barriers and Economic Growth

Abstract

In the background of trade globalization, trade barriers between countries are being reduced, which promotes the prosperity of global trade and the growth of global economy. At the same time, China's inter-provincial trade barriers still maintain a high level. With the proposal of the national unified big market, the reduction of inter-provincial trade barriers has become the main problem in China. This paper first uses the "iceberg cost" model to measure our inter-provincial trade barriers, then use a spatial econometric model to analyse it. Finally, the threshold effect model is constructed to explore the relationship between economic growth and trade barriers. The results show that China's inter-provincial trade barriers show a downward trend from 2009 to 2020. Trade barriers have a significant negative impact on economic growth and there is a threshold effect between trade barriers and economic growth.