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International Journal of Academic Research in Business and Social Sciences

Open Access Journal

ISSN: 2222-6990

Causal Relationship between China-ASEAN Trade and China's Economic Growth: A Toda-Yamamoto Analysis

Lingli Guo, Chee-Hong Law, Soo Y. Chua

http://dx.doi.org/10.6007/IJARBSS/v15-i1/24217

Open access

Since 2020, ASEAN has consistently been China’s largest trading partners, pivotal in driving China’s economic growth. Using time series data from 1992 to 2023, this study employs the Toda-Yamamoto causality analysis to examine the causal relationship between China-ASEAN trade and China’s economic growth. The results reveal a significant bidirectional causal relationship between China’s exports to ASEAN and its economic growth, indicating that exports stimulate and bolster economic growth and vice versa. Moreover, a significant bidirectional causal relationship between exports and imports highlights their strong interaction. The analysis also identifies a unidirectional causal relationship from labor to economic growth and a unidirectional causal relationship from economic growth to capital. Robustness tests further confirm these findings. The results underscore the importance of China-ASEAN trade for economic growth, providing new insights into enhancing bilateral trade cooperation and optimizing trade structures. Moreover, the findings offer empirical support for advancing the Belt and Road Initiative and the implementation of the Regional Comprehensive Economic Partnership.

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Guo, L., Law, C.-H., & Chua, S. Y. (2025). Causal Relationship between China-ASEAN Trade and China’s Economic Growth: A Toda-Yamamoto Analysis. International Journal of Academic Research in Business and Social Sciences, 15(1), 335–353.