The Trade Effects Of China's Participate In RTAs

The two major trends of world economic development are Economic globalization and regional integration; however, the global economic crisis in 2007 brings about global trade-protectionism. What is more, the implement of various of trade protection measures restricts the further deep in globalization. On the contrary, it can provide an opportunity for the development of regional integration. At the same time, the plight of multilateral trade negotiations also contributed to the cooperation in regional trade, participating in regional trade is an important component of foreign trade policy for many countries. China is accelerating the pace of regional economic cooperation so as to conform to the development trend of regional integration. In order to measure the trade effects and welfare effects of China's participation in regional trade arrangements (RTAs) and also find the problems and shortcomings in the RTAs, the paper firstly modified the Viner model and provides theoretical basis for empirical analysis. Then, the paper uses the above model and measures the effects of the trade creation and trade diversion in china's participation in RTAs based on regression of balance data. The result indicates that the trade creation effect is greater than trade diversion effect on the whole. It is for this reason that participation in RTAs can improve China's welfare level. Secondly, the paper measures and compare the trade effects of south -north and south-south RTAs which china participates in. The conclusion is that the states which sign to China have the higher level of economic development, it can better improve the level welfare of china, this is to say, the type of south to north can better enhance the level welfare of china than the type of south to south. Finally, based on the above analysis, the paper provides some recommendations for China's participation in constructing the regional trade arrangements in the future.