An Analysis of China—Cote d’Ivoire Bilateral Trade

The intensity of trade between China and Cote d’Ivoire has considerably risen in the recent years. However, very few scholars have accurately analyzed the relationship between these two trade partners. This present paper highlights the trade importance between China and Cote d’ Ivoire, by exploring questions related to trade intensity, intra industry trade and also comparative advantage. The findings point out the trade deficit of Cote d’Ivoire in its trade relationship with China, which definitely needs political actions in order to improve the trade balance and ensure a better future to the China—Cote d’Ivoire bilateral trade.


Introduction
The international economic integration is an important element that affects international trade these recent decades. Countries have become welcomed and closer to each other.
In its desire to a better economic integration established for many years, several trade partnerships of China with a lot of African countries led to an important increment of trade volume. These partnerships are strengthened by the one Belt one Road project; an initiative that the Chinese government proposed in 2013 [1], aims to connect Asia, Africa and Europe, based on and beyond the old and historical Silk Road routes. The one Belt one Road project appears as a channel through which the Chinese investments reach African countries.
Africa is experiencing a considerable growth in its trade relationship with China, which is mentioned by a McKinsey report, indicating that the bilateral trade between Africa and China went up to 20 percent and direct investment a total of US$85.3 billion was reached during the first semester of the year 2017 [3], illustrating the trade between African countries and China.
The consequent commitment of China to Africa can be also observed in the relationship between China and Cote d'Ivoire, which is illustrated by numbers of aids, supports and investments from China. Indeed, Cote d'Ivoire has noticed a considerable evolution of its exchanges with china since the year 2000; an evolution which has been illustrated by several Chinese projects and companies in- In this paper, we will analyze the trade between the two countries, by calculating the trade intensity, and the intra industry trade and also the revealed comparative advantage, in order to have a better understanding of the trade relationship which keeps increasing (see Figure 1).
The analysis of Figure 1 tells that from 1995 to 2002, imports from China were not so much; they were actually roughly less than US$ 100 million, while   as supplying drinking water to Abidjan, the expansion of the port of Abidjan, the construction of the stadium at Ebimpe, near Abidjan [8].
The most important project is the construction of the hydroelectric dam at Soubre, built by China which also financed over 85% of it [9]. This assertion shows that trade between the two countries should keep increasing for a long time, which is a good news for Cote d'Ivoire.

Methodology
The aim of this paper is to analyse and highlight the importance of the bilateral trade between China and Cote d'Ivoire. The study will be mainly based on the following points: • Determine the trade composition and pattern; • Calculate the trade intensity index, calculate the intra industry trade and; • Find out the revealed comparative advantage.
The data used to calculate the index of trade intensity and the one of intra in-

Trade Composition and Pattern
Based on computation of data collected from WITS, we will determine the prod-Open Journal of Business and Management ucts categories and also the main exports and imports products exchanged by the two countries.
The product categories are segmented into 4 categories, which are: Capital goods, Consumer goods, Intermediate goods, and Raw materials.
The definitions of the 4 categories are briefly given as follows: • Capital goods Capital goods are tangible and durable assets such as buildings, machinery, equipment, vehicles and tools that are used to produce goods or services by an organization [11].
• Consumer goods Consumer goods are items which are destined to be consumed by the average consumer. Consumer goods are also called final goods, and result from manufacturing [12]. They are generally what are found in stores. As example of consumer goods, can be cited clothing, food, and jewelry.
• Intermediate goods Intermediate goods, also called producer goods, are goods used as inputs to produce other goods, including final goods. Intermediate goods are commercialized within industries for resale or other goods' production [13]. As example of intermediate goods, can be cited sugar, steel, salt and wood.
• Raw materials Raw materials are crude or processed materials or substances which can be converted by manufacture, processing, or combination into a new product [14].
Some examples of raw materials are wood, crude oil, rubber.
The main exports and imports products exchanged by the two countries are illustrated following the International Standard Industrial Classification at two-digit level, and concern the years 2012 to 2016. This will highlight the major products traded by the two countries.

The Trade Intensity Index (TII)
The trade intensity index (TII) is utilized to know whether the trade value between two partners is more or less than would be expected based on their weight in world trade [15].

The trade intensity index developed by Kojima (1964) is illustrated as follows.
Kojima (1964) [16] defined two indices in the determination of the trade intensity index which are Export intensity index (EII) and Import intensity index where X ij represents export from Cote d'Ivoire to China; X iw represents export of Cote d'Ivoire to the world; M jw represents import of China from the world; M w represents world import; Open Journal of Business and Management M iw represents import of Cote d'Ivoire from the world.
where M ij reprsents import of Cote d'Ivoire from China; M iw reprsents import of Cote d'Ivoire from the world; X jw represents export of China to the world; X w represents world export; X iw represents export of Cote d'Ivoire to the world.
The interpretation of the trade intensity index depends on the value of its index.
This index varies from 0 to the infinity. When its value is 0, that means no bilateral trade, when the value is 1, it means no geographical differences between the trade partners.
When the value of the index is higher or lower than 1, that indicates a bigger or littler bilateral trade than awaited, this shows the weight of the given partner in world trade.

Intra Industry Trade Index (IIT)
The Intra industry trade index is defined as the trade in which a country exports and imports in the same industry [14]. In other words, IIT is the exchange of similar products that belong to the same industry.
The measure of intra industry trade is obtained from Grubel and Lloyd (1975) [17] presented as follows: where X ik denotes total nominal exports of product k by country I. M ik the total nominal imports of product k by country i.
We construct the intra industry trade index at two-digit industry classifications that follow the ISIC.
In this work, we selected industries from the International Standard Industrial If the value of IIT index is equal to 0, then, there is no intra-industry trade.
In other terms, the closer the intra industry trade index is to 0, the bigger the opportunities for intra-industry trade are; the closer IIT is to 1, the less the opportunities for intra-industry trade are.

Revealed Comparative Advantage Index
The revealed comparative advantage index is developed for a comparison of countries' competitiveness regarding a particular product. Balassa (1965) [18] first proposed this index which is illustrated by the following formula: where RCA ik is the revealed comparative advantage index of commodity product k for country i, X ik represents exports of product k by country I; X iw represents total exports of country I; X kw represents world exports of product k; and X w represents total world exports. When the value of RCA ik is bigger than 1, country i has comparative advantage in the export of product k, which means that country I has a bigger share of export than the world in terms of product k.
However, when the value of RCA ik is smaller than 1, country i has no comparative advantage.

Exports from Cote d'Ivoire to China
The observation of the results in Table 1  We can affirm, based on the results of Table 3 that Cote d'Ivoire mainly

The observation of the exported and imported products between Cote d'Ivoire
and China tells clearly that the trade relationship between the two countries looks like an exchange of raw materials for manufactured products.
The observation of Table 4  The results of Table 4 show that all indices of export and import intensity are smaller than 1. The meaning of this is Cote d'Ivoire and China trade much  These results also demonstrate through the trade intensity indices the huge trade deficit benefiting to China.
The analysis of the results of Table 5  74 Copper and articles thereof is facing a decrease of its trade with China, which is obviously caused by the world copper business, which has been slowing down for several years.
27 Mineral fuels, mineral oils faced intra industry trade, but stopped for over 10 years.
Cote d'Ivoire should seek for more intra industry trade with China which is known for its powerful manufacturing sector. More intra industry trade means more transformed goods, which also means more jobs, more development for Table 5. Intra industry trade index. We compared the revealed comparative advantage of the products which the intra industry trade indices were previously analyzed, and the results are presented in Table 6 as follows.
In products 4 Dairy produce; birds' eggs; natural honey, 10  China in turn has a comparative advantage in the following products: 42 Compared to the other indices that we calculated, the revealed comparative advantage gives a good understanding of the advantage that each country has in a specific industry or sector.
Indeed, we could observe that Cote d'Ivoire has a manifest advantage in exporting raw materials, while the advantage of China is rather into manufactured products.
This situation creates a perfect framework for more trade between the two countries.

Policy Implications and Recommendations
The analysis of the trade intensity index showed that bilateral trade between the two trade partners is not exploited as it could, whereas the export intensity of China is much more than Cote d'Ivoire's.
Although the intra industry trade indices of a few products (40 Rubber and articles thereof, 44 Wood and articles of wood; wood charcoal, 52 Cotton) increased over the years, most of the products have their intra industry trade indices close or equal to zero.
Such situation means greater potentiality for the two countries to increase trade.
The indices of comparative advantage point out the advantage which is held by every country in specific products. Our case is illustrated as follows: China has comparative advantage in manufacturing products, while Cote d'Ivoire is into raw materials.
The fact that China is seeking for raw materials to transform constitutes a great opportunity for trade between these two partners. Meanwhile, but Cote d'Ivoire should not only export raw materials, it should encourage more local transformation.
Also, as China is now a very import trade partner of Cote d'Ivoire, and likewise a country with a powerful manufacturing sector, Cote d'Ivoire should be oriented towards more intra industry trade with China, which will improve the level of its industry, by bringing technology progress, but also create jobs.
Furthermore, due to the fact that China's manufacture sector is very developed, it will be difficult for Cote d'Ivoire to export manufactured products to China, so, Cote d'Ivoire should rather find some new products to export.
Cote d'Ivoire can also implement policy that will ban the imports of some important products which are mostly coming from China, this will help to develop industry and also attract more foreign companies to settle into the country. This is what Nigeria did to develop its local manufacture sector, by banning imports of products such as furniture, cement, Spaghetti/noodles [19]. Open Journal of Business and Management

Conclusions
China-Cote d'Ivoire bilateral trade over the period 1995 to 2015 is deeply examined in this paper, and the findings shows that both countries have profited from this trade relationship in several ways.
Although the trade deficit of Cote d'Ivoire is considerable, due to the fact that China exports to Cote d'Ivoire much more than Cote d'Ivoire imports to China, the results shown by the calculated indices indicate that there is a huge trade potential for both parts.
The two countries having comparative advantages in different products, is a good opportunity to exploit in order to grow trade. Also, the current dynamic economy of Cote d'Ivoire is a key element for further and greater trade relations between China and Cote d'Ivoire, as it was claimed by officials of both countries these recent years.
However, as trade is a multivariate function, it is imperative to analyze and improve some other factors that can affect exports, which are infrastructure, labour laws, clearing process and access to electricity.
A perfect synergy of all these factors will definitely lead to more exports from Cote d'Ivoire and also to better results in the trade relationship with China.

Conflicts of Interest
The author declares no conflicts of interest regarding the publication of this paper.