The Economic Effects Of FTA And China's Strategy Of FTA Partner Selection

Economic globalization and regional economic integration are the main characteristics and trends of the world economy since 1990s. As the basis and the manifestations of regional economy, free trade agreement (FTA) developed rapidly in 1990s with the active participation of some developed countries and some developing countries. The rapid development of FTA had a profound impact on China's international trading environment. However, we lack systematic grasp about the factors and mechanisms of the trade, investment and growth effect of FTA. And that's the topic what we are trying to study. In addition to introductory, the dissertation is divided into five chapters.Chapter I reviews the existed theory of FTA. We discover that though the existed literature has an adequate research and summary on the influence factors of FTA trade effect, the theory research on the influence factors of FTA investment effect and growth effect is piecemeal rather than systematic.Chapter II specifies the economic effect of FTA in three aspects, trade effect, investment effect and growth effect. The corresponding influence factors are also summarized. Then, a FTA growth effect model is set up.Chapter III is the part of empirical analysis. The cross country panel data includes 39 countries,19 years covering the period between 1988 and 2006. Test results showed that:first, the influence factors of FTA trade effect include:the scale of integration, the economic scale of the partner countries, the distance between the host country and the partner country and their similarity of the economic structure; further more, the FTA FDI effect and growth effect will be influence the trade effect indirectly. Second, the influence factors of FTA trade effect include:the scale of integration, the similarity of the economic structure, the economic growth rate of the host country, tariff rate, the differences of economic scale, further more, the FDI effect will be influenced by FTA growth effect. Third, The influence factors of FTA fixed investment effect include the scale of integration and the differences of developing levels between the host and partner countries, further more, the fixed investment effect of FTA will be influenced by FDI effect and growth effect indirectly. Fourth, the economic growth effect of FTA is mainly achieved by the channel of fix investment effect and the technology effect.Based on the empirical regression results, the fourth chapter carries out an assessment of the size of FDI effect, trade effect and GDP effect, both China's signed FTA and potential FTA are considered. In addition, we calculate the contribution of various factors to each effect, based on which, we put forward some suggestions on China' FTA partner selection.The final chapter summarizes the main conclusions of the dissertation, and also points out the shortcomings and the further research directions.