China has huge differences among its regions in terms of socio-economic development, industrial structure, natural resource endowments, and technological advancement. These differences have created complicated linkages between regions in China.

Building upon gravity model and location quotient techniques, Prof. LIU Weidong, Institute of Geographic Sciences and Natural Resources Research (IGSNRR), Chinese Academy of Sciences, and his colleagues develop a sector-specific model to estimate inter-provincial trade flows, which is the base for making a multi-regional input-output table.

They apply this new method of inter-regional trade estimation to three sectors: food and tobacco, metal smelting and processing, and electrical equipment.

The research shows that trade flows of food products and metal smelting products tend to flow from the Central and Western regions to the Eastern regions. For electrical equipment, trade flows exist within the Eastern regions and also from the Eastern regions to the Central and Western regions.

In this study, they find that selection of bandwidth has a significant impact on the assessment of inter-regional trade. Trade flows are more scattered with the increase of bandwidths.

As a result, bandwidth reflects the spatial concentration of geographical activities, which should be distinguishable for different industries. Future research could therefore focus on approaches to select appropriate bandwidths for different industries.