The Analysis Of China-ASEAN Free Trade Area: Its Trade Effect And Influencing Factors

This paper investigates relevant problems of Chinese regional liberalization from two aspects at the basis of the research on China-ASEAN Free Trade Area (CAFTA).At one aspect, quantitative analysis is made to discuss the trade effect of CAFTA in scope of macroeconomics. The theory of regional integration and relative research on CAFTA are presented in the first part. In order to test whether the foundation of the CAFTA is in accordance with the aim of WTO, which is promoting economic globalization, a series of index which had already been applied in evaluating the effect of regional integration, is used to test in the CAFTA. The result shows that the implementation of CAFTA is consistent with the principle of promoting trade and investment liberalization which is sponsored by the WTO. On the trade effect of establishing CAFTA, it does not only improve bilateral trade and investment of China and ASEAN, dig potential development, provide more convenience and capacious room, but also is in accordance with the developing law of realizing global free trade. Realistically, it makes the future of establishing bilateral free trade area between China and other countries more brighter.At another aspect, this paper also discusses the factors that affect the trade effect of the CAFTA. A comprehensive analysis of tariff and non-tariff, industrial relevancy, revealed comparative advantage (RCA) and intra-industrial trade that are influenced by the economic development of China-Asean, is carried out to discuss whether the establishment of CAFTA is efficient under the framework of WTO. The result shows that CAFTA maximizes the economic effect of regional free trade. Owing to the rich relative labor advantage, the transform from traditional gift diversity to intra-industrial trade as well as making corresponding liberalized international trade and investment policy, these greatly enhanced the efficiency of CAFTA and lessened the chance to collide with the WTO. Thus, the research on CAFTA provides not only similar feasible operation between China and other kinds of regional trade liberalization in the future, but also policies that help deal with the relationship with the WTO.