Rebalancing The Structure Of Intra-Regional Trade In East Asia Based On Regional Cooperation

The 2008 global financial crises did not affect the financial system in East Asia, but it posed great impact on its real economy by severely hitting the export sectors. In late 2008, the volume of export started to shrink dramatically and the growth of real economy dropped sharply. By studying the intra-regional trade in East Asia during the past twenty years, the author finds out that the volume of intra-regional trade has been enlarging while import exceeds export and the trade on components and parts is larger than that on the final goods. So the structure of intra-regional trade in East Asia presents a feature of imbalance. And the imbalance can explain why the increase of intra-regional trade in East Asia becomes independent of outer-regional demand. Besides, these years has seen the increasing accumulation of trade surplus and foreign exchange reserve in East Asia. This is one of the major factors causing global economic imbalance, as well as the fundamental reason for the real economy of East Asia to be seriously affected by the global financial crisis.Many scholars have studied the imbalance of intra-regional trade structure in East Asia, and gave explanations from different perspectives. Beginning with the institution starting international trade theory by North, this paper combs product specialization system in East Asia and establishes an institution-specialization framework to explain the imbalance. Further, this paper examines the negative effects that imbalance has posed on the welfare of East Asia, and the scope and mechanism of the global financial crisis. Next, the paper discusses how to rebalance the intra-regional trade structure from both the supply and demand aspects, meanwhile, emphasizes the necessity of a complimentary way: Regional Cooperation. Promoting the intra-regional trade of final goods by enhancing regional cooperation in trade, finance and trade facilitation. Finally, as one of the major economies in East Asia, China has to play an important role in the regional cooperation.