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emphasize that any RTA should regard accelerating trade among its members as the basic principle. Taking China-ASEAN as an example, since the China-ASEAN FTA Early Harvest Scheme was carried out, it has leaded to the tariff of nearly 600 agriculture products start to be reduced. Indeed, there are other elements in an FTA which would accelerate the trade, such as a common border or language. However, the trade in border area is in fact small, probably because of the country security considerations.

Actually, this paper aims to study whether the WTO or RTA increase China’s multilateral trade, thus drawing on the traditional gravity model, area is added to the equation to estimate its effect to bilateral trade. However, since the study is about all of the 16 countries’ trade with China, China’s area is omitted in the equation because it remains the same all the time. This paper just takes the area of China’s trade partners into account and wants to estimate whether the party country’s area would affect the bilateral trade. The result in table 1 shows that trade partner’s area is proportional with China’s trade since its coefficient is positive, which means that a bigger country would have a larger bilateral trade with China. However, this variable has 23.05% probability to make errors. Thus, it should be omitted in the model. Table 2 would display the result after the area is omitted.

R2=0.868731 F-Statistic=748.3401

Table 2 Pooled OLS Analysis

After the area is omitted from the equation, the model has a better goodness of fit since the R square and F-statistic are both enlarged. However, although the area may have insignificance effect in this model, we could not identify it as a useless variable in other relevant trade theory. Japan is smaller than the USA, but it is the largest trade partner of China. This could be explained by the short distance between Japan and China. Besides, with the improving of GDP per capita in China, the demand for Japan’s digital products as well as automobiles is enlarged, which would also promote Japan’s exports to China. From the perspective of Japan, it transfers some general industries such as the finished or semi-finished production and parts processing to China. Then it imports those products back to Japan by benefiting from China’s cheap-labor. However, compared with China’s other trade partner except Japan, the trade flow with America is far greater than other countries. Thus, the area is probably a factor affecting the bilateral trade.

In this model, the coefficient of GDP is always positive both in table 1 and table 2, which is 0.979711 and 0.989882 respectively. Thus the GDP turns out to be a great factor in affecting China’s trade with the outside world. The same thing is true for the GDP per capita both between China and its trade partners. Basically, this is approved in almost researches.

It is worth mentioning that the BDI is a positive and significant variable in the gravity model. No matter what changes makes in the equation, the BDI always shows a positive relation with the dependent variable, the trade. Thus it is meaningful to add it in the equation to study its relation with China’s international trade. The result proves that along with the freight rising, there must be prosperous in ocean transportation, thus the increasing demand for shipping is an epitome of international trade development. Indeed