Abstract

The study seek to explore the extent and nature of trade and its growth over the period 2005 to 2013 between China and its five South Asian neighbours (Bangladesh, Bhutan, Pakistan, Sri Lanka, and Nepal). We measure the extent of trade by the trade intensity index and then check whether whole of this is explained by complementarity in the conventional sense. The study reveals that China’s trade intensity increased with all south Asian countries, thus confirming its greater presence in real terms. This in spite of the fact that trade complementarities between china with these economies have experienced decline over the period. This confirms the strong presence of factors apart from traditional comparative advantage perspective that have increased trade intensity. However, china’s import intensity with the region does not show a positive trend. As such china enjoys a trade surplus with these economies which in the long run may have many ramifications for these. 

Key words: Trade intensity and complementarities, China and South Asia.