The Analysis Of Political Economy On The Foundation Of ASEAN-China Free Trade Area

How to make the trade policy choice becomes a very important aspect, when Chinese government's facing the increasing multilateral or bilateral negotiations. On the basis of new political economy theory, the content of this dissertation is mainly about the case analysis between ASEAN-China Free Trade Agreement, making a conclusion of political economic factors in the ASEAN-China trade negotiation, which is also the innovation of this paper. By making use of the model in Grossman and Helpman(1993b), the political economic facts, when the trade negotiation between ASEAN-China in 2003, are analyzed, and the general equation of political economy are found. The results are as following:First of all, significant effects of four factors, i.e. labor efficiency, ratio of export to domestic production, final proportion of consume, and the average pay per person year, are existing in the negotiation and treaty between ASEAN and China.Secondly, other factors, such as added value rate of industry, capital density, number of manufacturer, ratio of import to domestic consume, index of intra-industry trade and industry policy, have a correlation with trade policy choice, too.Finally, social welfare are put a certain ratio of power in policy choice by Chinese government.The use for reference is shown in the final part, which simply is that trade policy choice in the following trade negotiations is influenced by many aspects of political economic factors, such as government objectives, lobbies and social welfare, and so on. And the extention of these influences is going to be embodied in the process and final treaty of the trade negotiations.