Interests Analysis On China's Bilateral FTA And Strategic Tentative Plan

As the pushing effects of multilateral international trade system on the global trade liberalization are getting weaker and weaker, the Doha Round floundered, more and more countries turn to establish free trade area (FTA) to achieve trade liberalization. Bilateral FTA (bi-FTA) becomes the best choice for many countries because of its excellence.By the end of2012, there are354regional trade arrangements (RTA) that notified to the WTO. Only in2011and2012,27RTAs appeared, all of them were bi-FTAs. In2012, the number of FTA partners of the United States, European Union, South Korea and Mexico was20,56,48and44. While the number of China's FTA partners (except Hong Kong, Macao and Taiwan) is only8. After the financial crisis, The United States pushes the Trans-Pacific Partnership Agreement (TPP) and the Trans-Atlantic Trade and Investment Partnership Agreement (TTIP) that are US-led, and wants to build two largest organization of trade and investment liberalization in the world. But China is excluded. TPP and TTIP include almost the most important trading partners of China. TPP includes the U.S., Japan, ASEAN and so on, which are major trading partners of China. TTTP includes the U.S. and EU, which are the two largest export markets of China. If TPP and TTIP negotiations could be Successful, the major economies would participate into these two large FTAs, except for China and other BRICS countiies. By that time, China would be in a very passive situation. Only does China build her own FTA networks actively, could she avoid being marginalized.As the largest trading country, China has more than120trade partners. Bi-FTA strategy is a convenient way for China to change from a largest trading country to a greatest trading power. The Bi-FTA strategy could be the guide for China to develop Bi-FTA. As one of the national strategies, FTA strategy could be used to serve for one country's multidimensional strategic intention. Therefore, we must consider both economic factors and non-economic factors. China's bi-FTA strategy should consider five aspects that are trade-oriented, market-oriented, technique-oriented, resources-oriented and geopolitical security-oriented. We should consider traditional economic factors, such as trade scale, trade structure, trade cost, market scale, resources security factors, such as energy supply, geopolitical security factors and counter-terrorism.This paper could be divided into five chapters:Chapter one is the introduction. This chapter introduces the research background, research contents and ideas, defines the concept of RTA and bi-FTA and describes the differences and connections between FTA with the Shanghai Free Trade Zone (FTZ).Chapter two reviews the existed theories of regional economic integration and theories of FTA. Theories of regional economic Integration and theories of FTA provide a theoretical basis for this study. Existing research literature provides valuable references for the study of this article. However, the existing literature does not clearly propose an index system, how to select a bi-FTA partner.Chapter three describes the background and status, in which China participates in the bi-FTAs. Bi-FTAs with its unique advantages flourishes in the global, developed economies, emerging economies are actively involved in the construction of their FTAs. Implementation of bi-FTA strategy of the United States, European Union, Japan, Mexico, Singapore, South Korea, provides a useful reference for China's bi-FTA strategy. China's bi-FTA practice laid the practical foundation for the development of China's bi-FTA strategy.Chapter four analyzes the interests of China to participate in the bi-FTAs. Firstly, this chapter analyzes interest formation mechanism of China to participate in the bi-FTAs from the perspective of the basic theory. That is trade creation effect, trade diversion effect and investment promotion effect. Secondly, this chapter summarizes the successes and shortcomings in the three representative bi-FTAs, by analyzing the benefits of China-ASEAN bi-FTA, China-Chile bi-FTA, China-New Zealand bi-FTA, as a typical example of China's bi-FTA in the future.Chapter five proposes the bi-FTA strategic vision on the basis of the former. China should consider those factors in five areas that are trade-oriented, technology-oriented, energy-oriented, market-oriented, safety-oriented geopolitical factors when selecting a target bi-FTA partner. China should expand bi-FTA layout strategies from both the perimeter strategies and cross-regional strategies simultaneously.