Political Relations and Export Performance: Evidence from China's Trade with RCEP Countries

This study examines the impact of bilateral political relations on China's export performance to RCEP (Regional Comprehensive Economic Partnership) member countries, focusing on both export scale and margins (intensive and extensive). Using multiple regression models such as OLS, fixed effects, LSDV, and GMM, the research finds that improvements in political relations significantly increase China's export scale by reducing trade costs and enhancing preferences for Chinese products. However, the effect is primarily observed in intensive margins (increased export volume of existing products), while extensive margins (the diversification of new products) remain unaffected. The study highlights that close political relations deepen trade in existing products, whereas product diversification requires additional measures beyond improved political ties. These findings have important policy implications, emphasizing the need for stable political relations to foster trade growth within the RCEP framework.