The Game Analysis On China-Asean Economic Cooperation

The globalization of the world economy and regional economic integration are the two trends of the development of the world economy. Practice has proved that regional economic cooperation and trade agreement are the useful supplement in the multilateral trading system. China and ASEAN established the free trade zone, which has made the most significant breakthrough in the regional economic cooperation of the Asian countries. Not only it will promote the common development of both China and the ASEAN in Asian future, but also it will change the entire Asian economic structure and have a far-reaching impact to the world economy in 21st century. The exploration model in China and the ASEAN economic cooperation is of great significance for reference not only to China, but also to the other developing countries'economic development.Based on game theory, this thesis attempts to analyze the necessary condition, sufficient condition and constraint in China and the ASEAN economic cooperation. With the Index Measure of Degree of Trade Integration and the Drysdale's Degree of Trade Complementarily, it also attempts to prove that trade complementarities between the two sides is the necessary condition for the economic cooperation. The sufficient condition for economic cooperation is the effective consultation between countries, which distributed the interests of countries and eventually reached a binding agreement to restrain the economic cooperation of member countries. It established an effective mechanism for compensation benefits for different degrees of countries and it guaranteed the countries that benefit more from regional economic cooperation to give profit to the countries that have relatively little from regional economic cooperation. More importantly, the countries that give profit must benefit more than before. Through credibility restraint mechanism and government coordination mechanism in concept and operation, they could solve the "Prisoner's Dilemma" that was made by the new trade protectionism and change non-cooperative game into a cooperative game. Making use of mechanism design and system optimization, it has proven that China and the ASEAN economic cooperation will achieve a win-win result in both theory and practice.