The Study On Chinese Economic Security Under The Economic Cooperation In East Asia

In the 21st century, it is an indisputable fact that China became an important force to promoting the economic growth. For 25 years, the GDP of China is to 9% annual growth rate, it is the fast growing economic entity in the history. In 2005, if measured by the amount of market exchange, China has become the world's fourth largest economy; if measured by consumption, China has become the world's second largest economy. The GDP of China is 2.697 trillion US dollars in 2006. In the past four years, Chinese International trade increases at an annual rate of 29.5%. In 2005, the export has accounted for 7.3% of the world and the import has accounted for 6.3% of the world. In 2010, Chinese import and export completed the total 2.97 trillion US dollars, and became the world's second largest trading nation. It is reported that in 2011 Chinese total foreign trade volume expected to reach 3.5 trillion US dollars, surpassing the U.S. as the world's largest trading nation. Chinese foreign exchange reserves at the end of 2010 reached 2.85 trillion US dollars, marked a record high. It can be said that the rise of China has attracted most of the countries other than China alert. Both developed countries and developing countries look China as a threat, so they will stop or prevent. This is bound to prevent Chinese economic development and pose a serious threat to Chinese economic security.Participating regional economic integration has become an important safeguard to each contry's economic security, how to maintain the economic security for China? In practice, it is obviously unrealistic and not feasible to consider the regional economic integration with Western countries to seeking the protection, then whether to consider all the surrounding countries in Asia? For China, at this stage it is difficult to do. Can be said that in the context of globalization with Chinese economic development and the world the status of regional economic integration, actively participate in the East Asian regional economic cooperation and common develop with East Asian countries and regions is the only way to protect Chinese economic security.This paper argues that economic security is the security of the economy itself. Emphasis on economic security of their own is to see the economic security as a worthy goal and an important content to national security. National economic security includes physical and virtual economic security. The physical security includes investment security, industrial security and trade security; the virtual economic security includes financial security. In this paper, physical economic security is as the starting point, from the theoretical and empirical perspective to discuss the economic risks in Chinese participation in the process of economic cooperation in East Asia.This paper argues that both in trade, industry and investment there are risks when Chinese participation in the process of economic cooperation in East Asia. In the trade area, China and ASEAN will compete for a trade market, and trade friction will be gradually increased with the other East Asian economies outside of the ASEAN. In the determination of trade complementarity index between China and East Asian economies we found their trade relations emerged as competition. Besides the trade complementary between China and ASEAN is gradually emerging, the trade competions are gradually emerging between China and South Korea and Japan. Trade competition will inevitably lead to more trade frictions which also increase Chinese trade security risks.In the industrial safety, the risks of industrial impact from the ASEAN and the solidification of Chinese industry are everywhere. China still belongs to the division of labor in East Asia, namely the industrial chain leading by Japan and South Korea. If taking 0.5 as an critical value between industry and inter-industry trade, in accordance with the division of intra-industry trade index, China and Japan, South Korea are still in the dege of industry and inter-industry trade, which also can be understood that China still engaged in low-end producting and provide spare parts and semi-finished products for both Japan and Korea. Though according to the comparative advantage theory, China has advantage in parts production, and it is very consistent with theoretical requirements, but the long run, Chinese industry will be solidified in the stage of the industrial division of labor, and difficult to gain and upgrade the technology, which is not consistent with the requirements of long-term industrial development.In the investment security, ASEAN and China compete for foreign investment, and the change of investment has affected China and East Asian countries relations.There is a characteristics that the foreign capital inflows and trade competition are opposite between China, ASEAN and Japan. With China, ASEAN and Japan trade complementarity index and the investment changes between Japan to China and ASEAN, in 2006 and 2007, Japan reduced the amount of foreign investment to China, while the trade complementarity index of China and Japan dropped from 0.86 to 0.84, that is trade competition enhanced. The same period, Japan increased the amount of foreign investment to ASEAN, ASEAN and Japan trade complementarity index rose from 1 to 1.01, reflects the trade competition increased.From an empirical point of view, this paper will quantify the above mentioned economic risks, and using gray relational model to quantitatively analyze the risks of Chinese participation in the East Asian Economic Cooperation. The conclusions are the following:First, the parts industry will face competition from ASEAN countries but is not as a threat to Chinese manufacturing industry when China participating in the process of East Asian economic cooperation.Second, China and ASEAN will copetite for the FDI which comes from East Asia, and the competition is very prominent.Third, the amount of Japanese investment to China directly affect on the competition between China and Japan. If Japan reduces its investment to China and instead of increasing investment to ASEAN, the trade competition of China and Japan will intensify.Fourth, the trade competition of China and Japan gradually increased, the trade friction is bound to exacerbate.Fifth, China is still among the industry chain in East Asia, and China faces the risk of industry technology to obtain.