Analysis Of The Economic Effects Of China-ASEAN Free Trade Area

In today's world economic climate, regional economic integration is the path to economic prosperity. Past examples such as the EU and the NAFTA have proven its viability. An important characteristic and trend of economic development after World War II is the swift development of the regional economic integration. By the end of 2003, there were about 240 FTAs in the world. Regional economic organizations are gaining importance in our world economy.ASEAN has achieved great economic success and has been looked upon as the most successful FTA by developing countries. Since it was established in 1967, ASEAN has made great progress in economic development. China and ASEAN are neighbors. Mutual reliance between them paves the way for common economic progress. In the November of 2001, China brought forward the notion of establishing China-ASEAN Free Trade Area (CAFTA) in the next 10 years. This notion has been met with positive response from the ASEAN countries. If this FTA is established successfully, it will contain 1.8 billion consumers, have a gross domestic product of USD 2 trillion and annual foreign trade amounting to USD 1.3 trillion. It will be the third largest FTA in the world, after the EU and NAFTA. CAFTA, a regional organization consisting mainly of developing countries (except Singapore), will be the first regional economic organization that China joins formally. This thesis analyzes the economic relationship between China and ASEAN countries, explores the economic effects of CAFTA, and is of practical importance in promoting the establishment of CAFTA.The thesis is divided into four parts. Section one: The proposal and background of CAFTA establishment.