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Based on the basic trade gravity model and Xinjiang’s practical situation, new explanatory variables (GDP, GDPpc and SCO) are introduced to build an extended trade gravity model fitting for Xinjiang’s bilateral trade. From the empirical analysis of this model, it is proposed that those three variables affect the Xinjiang’s bilateral trade posi- tively. Whereas, geographic distance is found to be a significant factor influencing Xinjiang’s bilateral trade negatively. Then, by the extended trade gravity model, this article analyzes the present trade situation between Xinjiang and its main trade partners quantitatively in 2004. The results indicate that Xinjiang cooperates with its most trade partners successfully in terms of present economic scale and developing level. Xinjiang has established successfully trade part- nership with Central Asia, Central Europe and Eastern Europe, Western Europe, East Asia and South Asia. However, the foreign trade development with West Asia is much slower. Finally, some suggestions on developing Xinjiang’s for- eign trade are put forward.
Based on the basic trade gravity model and Xinjiang’s practical situation, new explanatory variables (GDP, GDPpc and SCO) are introduced to build an extended trade gravity model fitting for Xinjiang’s bilateral trade. From the empirical analysis of this model, it is proposed that that Whereas, geographic distance is found to be a significant factor influencing Xinjiang’s bilateral trade negatively. Then, by the extended trade gravity model, this article analyzes the present trade situation between Xinjiang and its main trade partners quantitatively in 2004. The results indicating that Xinjiang cooperates with its most trade partners successfully in terms of present economic scale and developing level. Xinjiang has established successfully part-nership with Central Asia, Central Europe and Eastern Europe, Western Europe, East Asia And South Asia. However, the foreign trade development with West Asia is much slow er. Finally, some suggestions on developing Xinjiang’s for-eign trade are put forward.