IRAQ-CHINA TRADE EXCHANGE AND ITS IMPACT ON IRAQ'S TRADE BALANCE AND ECONOMIC GROWTH: AN ECONOMETRIC ANALYSIS USING THE ARIMA METHOD

Abstract

The research examines the impact of Iraq-China trade relations on Iraq's trade balance as well as economic growth in the period 2000-2023. By adopting the Autoregressive Integrated Moving Average (ARIMA) technique, it evaluates time series data in order to identify patterns and make discriminating projections. The conclusion identifies that China has emerged as Iraq's leading trade partner and that the partnership has had a great influence on the nation's trade balance. Nevertheless, the reality that Iraq has over-reliance in exporting crude oils coupled with the seriousness of economic diversification has bound the partnership's hands and made it impossibility to enhance long-term economic development. The researcher advocates that the policy needs to initiate policies aimed at increasing the size of the Iraqi economic base as well as solidifying the gain accrued in its Chinese trade. The evidence identifies that in as much as the reality that crude petroleum export has improved Iraq's trade status in relation to China, the trade balance remains getting worse as the import rises in China. The crude oil prices remained the main determinant shaping both Iraq's trade balance as well as overall economic development for the period. In an attempt to overcome these challenges, the research posits that the Iraqi government needs to strive in increasing value-added production, diversification of the export categories, as well as better Chinese trade agreements. Furthermore, the research adds in identifying China's Belt and Road Initiative economic effects in the region of the Middle East as well as providing information for South-South economic cooperation dynamics.