The Empirical Study on Potential of Bilateral Trade between China and Kenya in the Context “The Belt and Road”

With the further development of “The Belt and Road”, bilateral trade between China and Kenya is becoming increasingly close. In order to further under-stand the development of bilateral trade in goods between China and Kenya, as well as the development trend of trade potential in the future, this paper uses trade intensity index and trade potential index to estimate the potential of bilateral goods trade between China and Kenya. The following conclusions are drawn: the import trade links between China and Kenya are relatively loose; the export trade links are relatively close; the import/export trade between the two sides is increasing year by year, with a better development trend in the future; although the trade potential index has fluctuated in the past decade, it has been rising in the past three years, with a better trend in the future. Through the analysis of trade potential, this paper summarizes the problems existing in the bilateral trade between China and Kenya, and puts forward relevant countermeasures and suggestions.


Introduction
Since the "The Belt and Road" initiative was put forward in 2013, it has provided a good cooperation platform for the silk road economic belt and the maritime silk road economic belt. Kenya, as an African stop on the maritime silk road, has had economic and trade exchanges with China since Zheng He's voyage to the west, and the friendship has lasted for more than 600 years. Since 2000, the total import and export value of China

Literature Review
Scholars at home and abroad have done a lot of research on the analysis of trade potential. On the one hand, scholars make empirical analysis of bilateral trade potential by using models. Roberts (2004) used the gravity model to predict the trade flow of China-ASEAN Free Trade Area, and believed that the trade flow between member countries with similar demand structure and per capita income may increase, but the trade creation effect brought by China-ASEAN Free Trade Area is very small [1]. Biyanru and Shibo (2010) used the gravity model to measure the trade potential of China and the five Central Asian countries, and concluded that China and the five Central Asian countries have greater trade complementarity and trade potential [2]. Li Yabo (2013) calculated the potential of bilateral trade between China and Chile based on the gravity model, and concluded that the potential of bilateral trade between China and Chile has not been fully exploited, and there is still room for further expansion [3]. Gao Zhigang and Zhang Yan (2015) used the time-varying stochastic frontier gravity model to calculate the trade potential between China and Pakistan, and concluded that the bilateral trade potential between China and Pakistan is far greater than the export trade potential between China and Pakistan [4]. Gong [7]. Bano (2013) believed that the measurement methods of Mukherji, Helmers and Pasteels can effectively make up for the shortcomings of gravity model in estimating trade potential, and further pointed out that the trade potential between two countries can be estimated after one country's export supply of a given commodity matches another country's import demand for a certain commodity [8].
Through reading and combing the literature, it is found that scholars have little research on the potential of bilateral goods trade between China and Kenya.
This paper studies and analyzes the bilateral trade potential of China and Kenya through the import and export intensity index and the modified trade potential estimation method of Bano, and puts forward suggestions for bilateral trade between China and Kenya through the results.

Current Situation of Bilateral Goods Trade between China and Kenya
1) China is the first import trade partner of Kenya According to statistics of Kenya's National Bureau of statistics, in 2017, China did not enter the top ten of Kenya's export trade partners. Kenya's main export partners are neighboring countries and European and American countries. Different from the ranking of export trade partners, China ranks first among Kenya's major import trade partners, and Kenya's total imports from China account for 22.6% of Kenya's total imports, which is the largest import trade partner in Kenya ( Figure 1 & Figure 2).   year by year, and from 2015 to 2017, China's surplus decreased. However, from the data of ten years, China has been in surplus and Kenya has been in deficit.

Potential Analysis of Bilateral Trade in Goods between China and Kenya
1) Indicators and data sources a) Import Intensive Index Import Intensive Index (MII) was proposed by A. J. Brown in 1949 [9], and then modified and improved by Kojima K before it was widely used [10]. The specific measurement indicators are as follows: In formula (1): ij MII is the import intensive index of country i (or region) relative to country j (or region), ij M is the total import value of country i (or region) from country j (or region), i M is the total import value of country i (or region), j X is the total export value of country j (or region), and w X is the total export value of the world. The numerator represents the proportion of total imports of country i (or region) to country j (or region) in total imports of country i (or region), and the denominator represents the proportion of total exports from country j (or region) to the world market excluding country i (or In formula (2), ij XII is the export intensive index of country i (or region) relative to country j (or region); ij X is the total export value of country i (or region) to country j (or region); i X is the total export value of country i (or region); j M is the total import value of country j (or region); w M is the total import value of the world; and i M is the total import value of country i (or region). The numerator represents the proportion of total exports of country i (or Theoretical Economics Letters region) to country j (or region) in total exports of country i (or region), and the denominator represents the proportion of total imports of country j (or region) in total imports of the world market excluding country i (or region).
The average value of the import/export intensive index is 1. When the value is 1, it indicates that the import/export tightness of country i (or region) and country j (or region) is the same as that of other markets in the world. When the value is greater than 1, it indicates that the import/export tightness of country i (or region) and country j (or region) is higher. The larger the value, the greater the import/export tightness. When the value is less than 1, it indicates that the import/export tightness of country i (or region) and country j (or region) is lower, and the trade relations between the two countries are loose. The smaller the value, the looser the trade relation.

c) Measurement of trade potential
In this paper, we choose the revised estimation method of trade potential of Bano. The specific estimation indexes are as follows: In formula (3), ij TP is the trade potential between country i (or region) and country j (or region); i X is the total export value of country i (or region); According to the collected data, the following Table 3 can be obtained according to formula (1) and (2). That is the import intensive index and export in-  ing year by year. In the past ten years, the import and export intensive index of China and Kenya has been increasing year by year. It can be seen that the import and export trade between the two countries will continue to increase in the future, which provides a good prospect for the development of bilateral trade.
b) The potential value of bilateral trade in goods between China and Kenya fluctuates slightly, and the future trade potential will be better According to the data and formula (3), Table 4  initiative, the trade potential of the two countries is likely to continue to rise.

1) Problems in bilateral trade in goods a) Bilateral trade imbalance in goods
Although the bilateral trade of goods between China and Kenya has developed rapidly over the years, and the scale of import and export trade has increased year by year, the development of bilateral trade has been in an unbalanced state. As shown in Figure 3 above, China's bilateral trade with Kenya has been in surplus for ten years, and Kenya has been in deficit. Kenya

Funding
Fund Project "Special fund for the construction of high-level teachers in Beijing Institute of Fashion Technology"-Beifu Scholars Program, project number: BIFTXZ201803.