Abstract Adopting the Extended Gravity Model, this study calculates bilateral trade costs of China and 60 trade partners in terms of value-added trade. It is found that China’s bilateral trade costs are dropping gradually, among which the annual drop with countries along “The Belt and Road” line is greater than that with other counties. The contribution rate of the decline in China’s bilateral trade costs on value-added trade growth is 29%. The empirical analysis of determinants in bilateral value-added trade costs shows that GVC is also a major factor other than those traditional ones of tariffs and distance. Therefore, China could further deepen the division of global value chain and accelerate information infrastructure construction in its endeavor to reduce bilateral trade costs and to promote the trade facilitation and development of value-added trade.
2018, Vol. 35 
