Research on EAC-China Economic Relations in Trade and Its Influences: An Analysis Based on Trade Intensities

This study analyzes the economic cooperation between EAC and China across the trade development based on the trade intensities. It shows its influence on EAC countries welfare and puts frontwards pertinent counter-measures to improve the troubles. The indices of the export intensity and the import intensity index are used to analyze the intensity of existing trade for the period 2000-2019. The impacts of comparative advantage on EAC-China imports and exports are considered. Our findings show that due to EAC-China bilateral trade agreements, EAC and China trade overall has increased over the years, even if they have been marked by fluctuations. From the results, we find also that unfortunately the EAC still has a trade deficit with China. In addition, for the future bilateral trade, we moved forward suggestions that the Community must improve its productive capacity to consolidate its trade intensity to branch out exports and enter the Chinese market. In the end, it provides new understanding of the economic cooperation in trade between EAC and China.


Introduction
Since the founding of the EAC, China is one of the largest trading partners of Tanzania and Kenya while Uganda, Burundi and Rwanda have seen massive increases in both trade and investment from China in the last decade. Hence, the EAC is a good example of how regional cooperation has fostered a strategic rela-tionship with China (Esterhuyse et al., 2014). According to Alyek-Omara (2012), to across China's fast growing request for resources and excess afford of consumer goods, a solution has been to associate with and reinforce trade relations with economic blocks as the EAC; in order to examine and find out new markets to provide services, technology and goods-with this of course being done in return for divers commodities and resources. Therefore, over 2011, China's government has marked Framework Agreements about Economic and Trade Cooperation to both EAC and ECOWAS, to stretch out cooperation in promoting trade facilitation, direct investment, cross-border infrastructure construction and development aid (China Daily, 2013). Korsak (2017) in his recent research paper has mentioned that the EAC which was composed by five countries at that time started its own common market for goods, labor and capital inside the community in 2010, with the objective of a common currency and full political federation in 2015. The Study conducted by Gigineishvili, Mauro, & Wang (2014) revealed that over the past decade, the EAC's economic rise performance has been awesome at 6.2 percent, the EAC's average growth rate in 2004-2013 is in the top one-fifth of the distribution of 10 years growth rate episodes experienced by all countries worldwide since 1960.
Authors and international studies have conducted research on economic cooperation in the field of trade. On the one hand, researchers focused on assessing trade cooperation based on appropriate bilateral trade index Munemo (2013) used the trade complementarity (TC) index & the Revealed Comparative Advantage (RCA) index to calculate trade between China and South Africa and concluded that tariff liberalization alone is inadequate for successful trade integration and that it is necessary to improve trade complementarity, reduce barriers to intra-industry trade and liberalize parallel MFN trade. Vahalík (2014) employed indices of trade complementarity and regional trade intensity to assess bilateral trade flows between EU-ASEAN and China-ASEAN; and concluded that china preserves better standing to the ASEAN countries from the angle of trade intensity but in the instance of trade complementarity the EU obtain greater long term results than China. Li (2018) utilized the export similarity index, trade integration index, revealed comparative advantage index, the specialization of the revised coefficient index and coefficient of consistent index to examine China-India Trade Competition and Complementary; and concluded that the trade structure of China-India has some competition, but also has plenty of complementarity. On the other hand, researchers led to the analysis of bilateral trade between countries or regions using the models. Liu & Jiao (2006) examined the effect of understandings trade regional of china along with Australia on trade commodity by employing a model partial equilibrium to estimate the relationship between China's trade with Australia and concluded that the beginning of regional trade agreements affected China's commodity trade with Australia. Dembatapitiya & Weerahewa (2015) used a Gravity model to assess the effects of various forms of trade agreements on bilateral trade of South Asia; and the re-A. J. Umuhoza, J. F. Wang sults propose that share out a joint language, a joint colony, together with membership of WTO positively and significantly affect export values. Uzair & Nawaz (2018) examined Modelling well-being impacts within China-Pakistan free trade understandings by employing data involving the total imported commodities and they deducted that rise in Trade along with China beneath customs duties reduction lead to trade establishing and initiating welfare.
The deep motivation for the choice of the subject as well as its model for the in-depth analysis is that through reading a lot of literature, we found that no scholars presently did any research on the economic relations in trade between EAC and China by using the import intensity index and the export intensity index. Moreover, the writing of this study will provide a right comprehension of the components influencing the bilateral trade, find out the problems existing and strategies to enhance the current trade situation. In addition, it will afford guidance for further development of trade relations between EAC and China.
This study consists of the following sections: Section II presents the development of trade between EAC and China; Section III discusses the Analysis of China-EAC Trade Intensities, 2000-2019; Section IV provides the potential trade advantage between China and EAC; Section V includes the general conclusion and recommendations.

Current Situation of EAC-China Trade Relations
The trade relations between Burundi and China were established in 1963. Chinese State Councilor and Foreign Minister Wang Yi, during his visit to Burundi on Jan. 11, 2020, said: "China is willing to carry out mutually beneficial cooperation with Burundi under the framework of jointly building the Belt and Road and implementing the eight major initiatives proposed at the Beijing Summit of the Forum on China-Africa Cooperation (FOCAC), with a focus on infrastructure construction and agriculture (Xinhuanet, 2020)". Kenya, meanwhile, has become an ideal regional area for Chinese investors to increase their business and cooperation in the East Africa. Currently China is offering favorable loans to of the EAC's total exports in 2017. Table 2  Therefore, the EAC still has a deficit in the trade with China because they import more than they export.

China-EAC Trade by Commodities
China imports a certain amount of coffee and cotton from Burundi and exported to Burundi cotton rags, bicycles, metal products, agricultural tools and building materials and so on (World Integrated Trade Solution, 2020).
In recent years, the trade value between China and Kenya has increased dramatically. China exports to Kenya household electric appliance, industrial and agricultural tools, textile products, products for daily use, construction materials Rwanda's exports to China consist mainly of minerals, hides and skins, tea, coffee and pyrethrum, a flower used to make insecticides while the country imports electronics products, machinery and light industry products (Ntambara, 2015).
South Sudan mainly import from China vehicles, machinery, electrical appliances, pharmaceuticals, plastics, beverages, raw Sugar and cereal flours. The country mainly export oil (Societe Generale, 2020).
Tanzania imports a variety of products from China, including rubber tires, motorcycles, tractors, and iron structures. Chinese imports from Tanzania, include: dry seafood, raw leather, log, coarse copper, wooden handicrafts (TanzaniaInvest, 2020).
The main exports from China to Uganda are machinery and electrical equipment and Uganda's exports to China mostly consist of many raw goods such as hides, oils and seeds (Vision Reporter, 2014).

Analysis of China-EAC Trade Intensities, 2000-2019
Trade intensity index is described like the part of one country's trade with other country, split by another country's share of global trade. Trade intensity index is employed to establish if the trade value betwixt two countries is upper or lower than what would look forward over the basis of their significance in world trade.
The indexes of export and import intensities are the two parting of Trade intensity index used to examine the structure of exports and Imports.
In this chapter, the trade intensities between China-EAC are estimated using time series data of China and EAC for the years 2000-2019. We then calculate the intensity of trade between China and the EAC countries based on the formulas of the export intensity index (XII) and the import intensity index (MII) proposed by Kojima (1964) & Wadhva & Asher (1985) to study and analyze the bilateral trade with the results being reported in Table 3 & Table 4.

The Export Intensity Index (XII)
The Export intensity index of China relative to each EAC Countries (XII ijt ) is

The Import Intensity Index (MII)
The Import intensity index of China relative to each EAC Countries (MII ijt ) is shown as follows: smaller geographical and psychic distances between them, and mutually favorable agreements between them, and a low intensity of the country situation.
Across a survey of the literature on the determinants of bilateral trade levels which discusses the various methods, Drysdale & Garnaut (1982) identified the intensity approach to analyze the resistances of bilateral trade flux in many country world and concluded that the intensity approach identifies gaps in resistances through various bilateral trade relations, and the revue of these gaps supply fertile field for analysis of the nature and relative importance of the divers kinds of resistances to trade. Being part of one of two approaches adapted in his study, Bano (2002)  have concluded that BRICS countries are getting risely significant trading partners to Ethiopia, particularly as Ethiopia's imports sources. They suggested that Ethiopia more intense trade along with BRICS will afford it a scope to harness its natural resources and utilize the profits to expand worth strings within else commodity ranges. Goyal & Vajid (2018) used the Trade Intensity to quest the major tendencies of bilateral trade betwixt India and UAE and founded that the Trade between India-UAE is on the right track and is more intense in comparison together with its other trading partners. Keeryo, Mumtaz, & Dayo (2020) used trade intensity index to examine the force and nature of Pakistan-India's bilateral trade relation and noticed that the two countries own a big potential to improve their bilateral trade but possess certain barriers. They suggested that the two nations strengthen their mutual trust and cooperate in matters between them, in order that bilateral trade can be upgraded.

Data Sources
Data on World's total import/export, China's total import/export and EAC Countries total import/export are collected from World Trade Organization database except data on South Sudan's total import/export which are collected   Table 4 and described below.   year, which shows that the degree of trade ties is gradually close and there is the possibility of in-depth development.

Trade Intensities Analysis
Overall, the import and export intensity index of China to Kenya has been growing year by year. It can be observed that the import and export trade between the two countries will continue to grow in the future, which serves a good prospect for the development of bilateral trade.
Rwanda: On the one hand, the import intensity index of China to Rwanda in

China-EAC Trade Problems and Their Solutions
Based on trends of export intensities and import intensities between China and EAC Countries shown on Table 3 & Table 4 above, we can mention that Export

China-EAC Comparative Advantage
In China's trading pattern is often seen as an illustration of the power of the Heckscher-Ohlin approach to explaining world trade: labor abundant China specializes in exporting labor intensive goods. A broader Heckscher-Ohlin worldview is also perfectly consistent with China's role in performing the labor-intensive tasks in complex international supply chains. A key prediction of the theory is that relative transport costs by product and export destination influence China's export success. In particular, the gravity model predicts that China will tend to export "heavy" goods (those with a high transportation cost as a share of value) to nearby export destinations, and will export "light" goods to more distant markets because it has comparative advantage in heavy goods in nearby markets, and lighter goods in more distant markets. Furthermore, heavy goods will be sent by ship, while light goods may be shipped by air (Harrigan & Deng, 2008). Chinese trade also requires accounting for local comparative advantage: products where China has a competitive advantage in some locations but not others.
Chinese manufactured products with comparative advantage in both world and US markets are increasing. Most of the products with comparative advantage are low technology (LT) products; the comparative advantage of Chinese medium technology (MT) products has largely improved in the world market; as a whole, Chinese manufactured exports are of greater comparative advantage in the world market than in the US market. Precisely, low technology (LT) products have the same position in world and US markets, while medium technology (MT) products and high technology (HT) products obviously have a greater comparative advantage in the world market (Hao & Zhao, 2012).
Kenya and Burundi both specialize in cut flowers. Uganda and Burundi both also specialize in cotton. Rwanda and Burundi both specialize in the same product, tungsten ores and concentrates. There is also a comparative advantage in the quality of tea (Chingarande, Mzumara, & Karambakuwa, 2013).
Burundi has a comparative advantage in the quality of the coffee. The EAC countries have a comparative advantage in tea, coffee, cotton.
The EAC exports progressively declined up to the lowest point around 1992-1994, again a general fall in export was recorded in 2002; followed by a modest growth up to date. They are two coffee export leaders in EAC, which are, Kenya and Uganda but with a quasi-dominance of Uganda since 1995. Burundi and Rwanda were the least coffee exporters in EAC because of limited factor endowment (land) and technology, though coffee was grown in a favorable environment and volcanic soils. While Burundi's coffee export was greater than that of Rwanda since 1980, their export trends intertwined from 2003 onwards. The implementation of Rwanda's coffee reforms and success attracted FDI which boosted its export (Ndayitwayeko et al., 2014). A rise in exports registered during 1986 and 1995 resulting from the severe rime and damage to the coffee crop of the leading exporter, Brazil, the coffee shortage of which pushed the Arabica coffee price up. This led to high volumes of coffee exports from Brasil's coffee export competitors, EAC countries being among them (Ndayitwayeko et al., 2014: p. 142).
Balassa's RCA index was used to establish member states' comparative advantage. There is therefore evidence that all the members of the EAC have revealed comparative advantage. However, the product number in which they have comparative advantage is small and also produce the same products thereby restricting intra-EAC (Chingarande, Mzumara, & Karambakuwa, 2013). "In the modern theory of international trade, the comparative advantage of the different countries is explained not by the difference in technology, but by the difference in the factor endowments. Such a modern theory is generally known as Heckscher-Ohlin theory, because the groundwork for substantial developments in the theory is laid by (Negishi, 2001)". "The proponent of the theory of comparative advantage, it is stated that absolute production cost difference rather than comparative cost difference is the reason for international trade. Thus, even if a country has absolute advantage in the production of goods, it can gain by importing the relative dearer good and exporting the relative cheaper good (Beyene, 2014: 164)".
Generally, the EAC member states and China are gaining from international trade.

The Belt and Road Initiative
The   The major projects in the East Africa are the Addis Ababa-Djibouti railway in Ethiopia, the Nairobi-Mombasa railway in Kenya.
In Tanzania, the Bagamoyo port actually underneath construction, is whole to become the greatest in East Africa. The partnership between Tanzania, Oman and China, the port is looking forward to existing in operation by 2022. Situated right 75 km from Dar es Salaam, it has links with a SEZ for export-oriented fabrication.
With an estimated cost of 3.2 billion dollars, the Nairobi-Mombasa railway was opened in June 2017 to replace the 4000 trucks that use the road daily. A lot of trucks use the road daily not only within Kenya but also from others EAC countries especially Burundi and Rwanda (Githaiga et al., 2019). As a part of a broader regional integration Agenda, China invests also in boosting the ambitiousness of EAC's railway projects. The intent is to stretch out the railway to A. J. Umuhoza, J. F. Wang Ugandan capital, Kampala and then south to Kigali in Rwanda.
"According to the World Bank, a 1 percent reduction in trade costs is likely to increase bilateral trade between economies that participate in the BRI projects by 1.3 percent. The improvement in the network and capacity of railways and other cross-border transport infrastructure could therefore lead to more intra-African trade, as well as increased investment, the associated technology and skills transfers, and higher growth in African economies (Sylodium, 2020)". Overall, the Confucius Institute offers a better understanding Chinese language and Chinese culture to EAC citizens. Therefore, it helps in their localities to build and promote friendly relationship in different areas.

The China-EAC friendship
2) The Infrastructures Infrastructure is a challenge for regional integration and market access in the EAC and the Chinese are good in the construction, engineering area. Although in the EAC, the largest partner in infrastructures and investments with China are Kenya and Tanzania, there are still a shortage of roads, building, ports especially in Burundi and Rwanda. There are many infrastructure and investment projects in the EAC: the main ones are the TAZARA project and the Bagamoyo port project which will be the largest port in the EAC when completed and is mainly A. J. Umuhoza, J. F. Wang funded by a Chinese government; but TAZARA project is currently the most important because the citizens of the EAC started to use the train.
These projects are benefit to the EAC countries in investment in railroad infrastructure significantly with reducing the costs of trading goods: the goods and commodities from China to the EAC will be cheaper but also from the EAC to China.
Overall, TAZARA provides a communication support for the three regional groupings as EAC, SADC and COMESA. It helps the trade, the exchange of goods & services between the countries of those regions but also the imports of

Conclusion
This study has examined the strength, magnitude and direction of bilateral trade between EAC and China. Our findings show that EAC and China trade has intensified over the years, even if it has been marked by fluctuations. The method that has been used during this study namely the trade intensities clearly supports these conclusions.
The community's comparative advantage is low and it also produces the same products thereby restricting intra-EAC but generally, the EAC member states and China are gaining from trade relations. China has been in surplus for a long time, and EAC in deficit; most of EAC's exports to China are primary products and natural mineral resources; most of China's exports to EAC are labor-intensive industrial products; the import trade links between EAC and China are weak; and the export trade links are relatively close.
From our findings, a lot of efforts need to be put together on both sides especially EAC by improving the productive capacity in order to consolidate in trade intensity, optimizing the trade structure of the two parties and make use of the cooperation platform the "Belt and Road" initiative. However, the import and export intensive index betwixt the two parts shows a rising trend year by year, and the future trade development tendency is better.

Recommendations
The government of the EAC countries should reinforce the economy of their countries by boosting the trade, investment in the industries which can produce things in order to export and increase the balance of trade because the EAC countries have a negative balance of trade. It can also privatize or semi-privatize some public industries which are crushing, it will help the country to boost the production and to increase the societies.
The unity is something powerful and positive between the countries when they are in a group, the EAC countries should be too united in order to develop the community. The powerful and strong countries in the EAC can help the weak ones to improve their economy or in a weak field.
To reinforce the cooperation between EAC and China, the EAC and China need to have good friendship relations that already exist, and others things will follow. When there are some Chinese projects, companies in the EAC countries, should employ in their companies more citizens of the EAC because the project should create the employment in the EAC' states.

Conflicts of Interest
The authors declare no conflicts of interest regarding the publication of this paper.