The Rise of China in the International Trade Network: A Community Core Detection Approach

TL;DR

This paper analyzes the evolution of the International Trade Network using community detection, revealing dynamic shifts in regional dominance and the influence of preferential attachment mechanisms over time.

Contribution

It introduces a multilevel community detection approach to study global and regional trade dynamics, highlighting the rise of China and the changing core structures in the ITN.

Findings

Asia-Oceania community disappeared and reemerged

Leadership shifted from Japan to China

Global dynamics driven by preferential attachment

Abstract

Theory of complex networks proved successful in the description of a variety of static networks ranging from biology to computer and social sciences and to economics and finance. Here we use network models to describe the evolution of a particular economic system, namely the International Trade Network (ITN). Previous studies often assume that globalization and regionalization in international trade are contradictory to each other. We re-examine the relationship between globalization and regionalization by viewing the international trade system as an interdependent complex network. We use the modularity optimization method to detect communities and community cores in the ITN during the years 1995-2011. We find rich dynamics over time both inter- and intra-communities. Most importantly, we have a multilevel description of the evolution where the global dynamics (i.e., communities disappear or reemerge) tend to be correlated with the regional dynamics (i.e., community core changes between community members). In particular, the Asia-Oceania community disappeared and reemerged over time along with a switch in leadership from Japan to China. Moreover, simulation results show that the global dynamics can be generated by a preferential attachment mechanism both inter- and intra-communities.