MILESTONE 1:
Preliminary Insight
Development
ZID:5458778
LIYUAN WANG
l Introduction
The cross-border services sector thrives on the cross-border exchange of skills,
knowledge and expertise, creates a large number of jobs and makes a significant
contribution to the GDP of exporting and importing countries, so there is a
correlation between Milestone1's performance around cross-border services and
GDP and other key economic indicators or events in local jurisdictions. There may
also be correlations (positive or negative) between other key economic indicators
or events. The main jurisdiction I focus on is China's comparison to the USA and
the GBR.
l Cleaning data
In M1, the data of manufacture repairs service are deleted. China's GDP data for
21 years is missing, and the average value of previous years is used instead of the
empty value. China is also missing debt data for the years 2017-2021, so it ended
up using the average of previous years instead. With no outliers, variable data
quality is good, but asymmetry can occur.
l Descriptive
MEAN MEDIAN STANDEVIATION RANGE MIN MAX
CHN-USA EXP TS 25852.32 25595.52 8814.451088 37062.04 10771 47833.233
CHN-USA IMP TS 53502.91 55077.83 28324.88394 82686.05 13394 96080.055
CHN-GBR EXP TS 5673.197 5411.678 2111.910845 8660.298 2277 10937.657
CHN-GBR IMP TS 13353.46 13716.82 7085.984012 10689.68 3335 24025.377
The median export value for China and the United States was 25,852.32, and the
average was 25,595.52. The smaller and more stable the average distance between the
data and the mean, the stronger the data correlation between China and USA. As can be
seen from above table, the correlation between imports and exports in China and the
United States is not very high. Both the median and average export data of China and
the GBR are larger, and the correlation is not as strong as that of imports.
l Graphic Analysis
The trade volume between China and the United Kingdom is close, but the gap
between China and the United States is larger. The distribution of both countries is
asymmetrical, with higher trading volume. Total services trend analysis shows that
in recent years, the trade volume with the GBR has been increasing, while the trade
volume with the USA has been declining. In terms of the import and export volume
of the two partner countries, the GBR has performed better in terms of the trend,
and the import and export volume are relatively stable and continues to grow.
Product prices may also show a positive skew distribution. In the retail space, the
price of most products may be concentrated in the low price, while a few high-
priced products will pull up the average. In sales data, high-priced sales or large
transactions may result in a positive skewed distribution
l Correlation
U.S.A‘s exports to China rarely match China's imports from the United States.
First, exports and imports are valued differently: exports are calculated on a "free
on board" (FOB) basis, rather than imports. Differences in tariff regimes,
confidentiality policies, recording times or product classifications also play a role.
Another important source of variance is that merchandise trade statistics record
imports by country of origin and exports by country of last known destination. As
global production chains become more complex, goods may cross borders multiple
times before reaching the final consumer, and such conventions mean that recorded
exports and imports will not be symmetrical. total service and GDP index are the
most correlated and positively correlated. But lending is not necessarily, because
lending is a liability. Compared to the USA relative to the GBR, the volatility is
larger, more affected, the USA trade is more sensitive to the GDP economic index.
l Covid effect
During the epidemic, China exported much more services to the USA than it imported
from the United States. After the epidemic, China exported more services to the United
States than it imported from the United States, although it was less than during the
epidemic. The import of the United States and China was inhibited by the epidemic, so
it showed a negative correlation and a significant decline. The GBR also has a negative
correlation in imports, which inhibits the impact of trade between the two countries. Of
course, the impact is particularly pronounced in transportation and tourism. Due to the
long distance and high cost, people are more inclined to choose countries with close
distance to travel. During the epidemic, people are also restricted to travel, so the
tourism industry will decline significantly.
l Future Development Plan
To verify whether the available data support the impact of cross-border services on
national macroeconomic indicators and epidemic factors, statistical inference and
hypothesis testing can be used.
First, statistical inference can be used to analyze and compare the relationship between
macroeconomic indicators and cross-border services in China and the United States, as
well as China and the United Kingdom. We can select relevant macroeconomic
indicators, such as GDP and lending mentioned above, and use correlation analysis or
regression analysis to explore the correlation between these indicators and cross-border
services. Through statistical inference, we can judge whether these indicators have a
significant impact on cross-border services.
In addition to existing data, additional external data and materials should be sought to
complement the analysis. These external data can include macroeconomic indicators,
epidemic data, industry statistics, etc., to further validate and support the analysis
results.
Finally, according to the analysis results and thinking, investment suggestions can be
put forward to fund management. Based on macroeconomic indicators and the impact
of the epidemic on cross-border services, the development potential and risks of this
sector can be assessed. Based on these evaluations, targeted investment
recommendations can be provided for fund management, including increasing
investment, continuous observation and portfolio adjustment.