The Effects Of Free Trade Zone On The Regional Economy

Based on the experiences of Free Trade Zones of the world , establishing various forms of special opening regions is a basic feature of China's reform and opening-up experience. Whether they are development zones, export processing zones or bonded areas and bonded port areas, these opening areas have played a significant role, which can't be underestimated, in regional economic development and opening up. As China speeds up its integration into the global economy, China has set up 12 bonded port areas with the nature of FTZ. Therefor, how to learn the experiences from world's FTZ in order to maximize the regional economic effects of the bonded port areas is undoubtedly of great theoretical and practical significance, which is the purpose of this article.This article is taken in a logical way of gradually in-depth discussion. The basic thread of the paper is: Firstly,defining the concept of free trade zone, the bonded area,the bonded port area and elaborating the relative theories of FTZ. Secondly, analyzing the operating modes and economic effects of successful FTZ from a global perspective. Then through the creation of static and dynamic model , analyzing the general theory of the effects of FTZ on the regional economy. Thirdly, taking Tianjin port bonded area as an example, using the panel data and granger causality test, carrying out an empirical analysis about the economic effects on the FTZ. Finally, based on the study conclusion , proposing policy recommendations of promoting the construction of FTZ in China and maximizing its economic effects .Study on the development experience, operating mode and function evolution of FTZ in the world shows that even in a high degree of liberalization of trade and investment today, the construction of FTZ is still an important means for the macroeconomic effects and institutional innovation. Study on the Dubai model, the American model, Hamburg model and Hong Kong mode shows that these very active and successful models in recent years are most useful for the construction of China's FTZ.Theoretical model analysis indicates that net increase of exports and net capital inflow brought by FTZ, which are direct effects, are important, but from the sustainable development of regional economic point of view, its indirect effects are more important, that is, regional economic effects brought by the industry association and technology spillover are significant for the counties'economic development. In China, the construction of FTZ is more important for regional development and opening up, because it is an international logistics and shipping center, the "growth pole" and "engine" of regional economy, the first zone of trade liberalization and facilitation , financial liberalization and capital planning center and with its regional brand. From a regional economic point of view, the establishment of FTZ in China will be conducive to regional economic growth, boosting hinterland economy, promoting resource development and upgrading the industrial structure. Therefore, strengthening the external economic effects of the FTZ is the most important policy direction.The empirical analysis based on the development experience and data of Tianjin Port bonded area shows that opening to the outside world can not only promote economic growth of the bonded area , but has obvious external economic effects, which have an important role in radiating on the regional economy . With the openness of a particular region, the radiation of its external economic will be further strengthened. Thus, in the strategy transition of China's opening up, there should be a new concept to achieve the FTZ's opening to the outside world, and comprehensively improve the level of opening up, in order to maximize the economic effect of the FTZ.