The Structure Of The East Asian Regional Economic Integration And Its Evolution

Facing the trend of the world economic integration, the economy bodies in East Asia also promote the economic integration. After years of development, East Asian economic integration has formed the "Hub-Spoke" structure with ASEAN as the hub, and the economic integration is pushing forward under this dominant structure. Why can this structure be formed, and which structure will be in the future? These problems are important to the future of the East Asian economic integration. This paper will analyze the structure of the East Asian economic integration, and try to explain the basic logic of the structure formation and its evolution, indicate the direction of the East Asian economic integration.Taking the economic welfare and political factors into account, after having tested the effect of the international political factors by a probit model, this paper developed a three-country TU cooperative game model, analyzed four basic economic integration structures-"Bilateral","Network","Hub-Spoke"and "Unified Multilateral" structure, defined the stability conditions of each structure.Based on the theoretical model, the paper simulated the economic welfare effect of three economic integration structures-"Bilateral","Hub-Spoke"and "Unified Multilateral" structure, among the economy bodies China, Japan, Korea and ASEAN. Through the welfare comparing, it concluded that the "Hub-Spoke"structure with ASEAN as the hub is instable. It has the motivation of evolution to the "Unified Multilateral"structure. But the international political factors, by the form of transaction cost, named"political threshold", hindered this process.In the process of structure evolution, the hub country-ASEAN will facing the deterioration of its economic welfare, in order to eliminate the ASEAN’s worry to the structure evolution, this paper analysis the necessary and conditions of the compensation mechanism, pointed out a feasible roadmap for promoting the structure evolution and improving the East Asian welfare as a whole.