Study On The Regional Economic Integration In East Asia

One of the purposes of this research is to response to the proposal of EAC proposed by Japanese government. Before the proposal raised by Japan October2009, the initial conclusion has been made in this thesis was that EAC or other institutions alike, have no real feasibility in the near future but is as a long-range objective. The generally purposes of this thesis are:Firstly, to analyse Integration De Facto theoretically and prove it as the model of regional economic integration as well as the Insititutional Integrtion represented by EU; Secondly, to prove that Functional Integration is the appropriate way for East Asia, meanwhile to give some suggestions for China’s strategy.Overviews based on the early researching literature of East-Asia Integration and researching in recent ten years, combined with form, development and the latest progress of the region integration theory, herein consider that the traditional regionalism and new regionalism are all influenced and restrained by the paradigm of EU. Alike lacking of micro basis in traditional Macro-economics, in the long term, the movement of economic integration is narrowly understood only as macroecnomic polices and governmental behaviors, featuring by sovereignty transferring and supro-national organization’s establishment. Economics of International Integration is lacking of micro basis too. Our analysis suggests that the nature of economic integration is self-organizing economic activities from market itself based on the specialization and transaction relations, due to asymmetry in the space of economic activities, economic integration has the regional characteristics.The government could have the function of positive or negative on regional economic integration, none-economic elements also could have positive or negative influence on regional economic integration, but the primary and fundamental driving-force forming and developing regional economic integration is economic factors and market power. Based on the influence of government and none-economy factors, there are two modes of regional integration development: institutional integration and integration de facto. Insidious integration of the TNCs belongs to the integration de facto, it is also an important part of East-Asia integration.East-Asia integration just is the integration de facto. The early formation of East-Asia integration is flying geese mode, as Japanese economy has been slow down and the globalization surges, East-Asia integration has been changed into FDI integration and trade integration based on production integration commonly dominated by American, Japanese and European TNCs, East-Asia integration is derived from economy globalization exogenously.The exogenous of East-Asia integration restrains the development of east-Asia’s integration. Although the resuts in Gravity Model and GTAP Model based on CGE suggest that FTA of China, Japan and Korea has positive economical effects, but external restrains practical economy effects are not notable. The structure as China-Japan-Korea, Eastasia-NAFTA-EU, double layer and triple game playing, is doomed to unsuccessful progress of China-Japan-Korea FTA and institutional integration. Under the global financial crisis and the rebalance in world economy, East Asian countries should strive to maintain, strengthen, reform the multilateral trade system dominated by WTO and move forward to deepen East-Asia’s integration through trans-regional bilateral integration involvement.Both external and internal restrains exist in east-Asia integration. It is common to reach an agreement that economical difference and none-economy factor’s sensibility are not the main factor which resists East-Asian countries reunite more tensely. The main factor that resists East-Asian countries integration and endogenous development of integration is national strategic diversity among East Asian countries. There is no strong desire to set up institutional integration among East Asian main economies, it is destined that there is no essential significance in promoting the construction of China-Japan-Korea FTA,’10+3’FTA and institutional East-Asia integration from interior restrains perspective. Under the condition of globalization adjustment and regional groups tensely competition, although it is not necessary to promote east-Asian institutional integration, but it is compulsory to strengthen tense corporation and regional endogenous of integration. A practical path is to start corporation in concrete fields and lead to a further development of whole east-Asia endogenous integration through the way of showing economic effect of benefits from concrete cooperation, this is a developmental direction of functionalism in east-Asia integration. According to functionalism integration theory, regional corporation fields are chosen from low political sensitive areas where exist common benefits to institutional cooperation in those areas which have comparatively high political sensation. The cooperation areas in Science and technology, new flying geese mode, currency finance, energy and resources, standard, environment protection are prior chosen areas at present and in the days to come for east-Asia functional integration.China is one of main leaders in East-Asia integration, in the same time China is also a strong economical country in the world. To a certain extent, global financial crisis, rebalance of world economy, would have negative influence on Chinese economy, but the progress of globalization will not be reversed, the basic world economic pattern will not change either. In accordance with dynamic changes of Chinese factor endowments, extensive and intensive connection to the world economy Chinese foreign trade strategy applies to global cooperation, Chinese east-Asia region strategy should be set up within the world strategy, reaching the target of interaction and complementary between east-Asia region strategy and world strategy. China should cooperate with east-Asian main economies, to maintain, strengthen and reform multilateral system under WTO. In the same time, at the request of domestic economy integration, the core of Chinese economical strategy should be moderately internal and western orientated.