East Asia Free Trade Area Of ​​the Path Selection

With further globalization process, the East Asian countries are in great needs of building a unified regional economic organization to deal with the economic crisis and other challenges brought by globalization. However, the process of building East Asia Free Trade Area (EAFTA) has been held up recently. The reasons lie in the possible national interest disputes concerned by different methods employed in building the FTA.Among several on-discussion methods, the"ASEAN+1"model has taken the fastest development, but it is difficult to put several different"ASEAN+1"settings together. Meanwhile ASEAN, Japan and some other countries are less interested in supporting the"ASEAN+3"model as a result of their own consideration of national interests. Under this context, the design of"ASEAN+6"model is now becoming a hot topic. Compared to the other models,"ASEAN+6"model takes less cost for better outcomes, and is seen as a new method to resolve the disagreement of the leadership of East Asia corporation. In applying the computable general equilibrium model (CGE), results show that"ASEAN+6"model is a strategic choice with relative advantage, which could bring a 4.93% increase of welfare effect to the sixteen countries within the region, and increase the world welfare by 0.54% at the same time.The"ASEAN+6"could also be a better choice of China."ASEAN+6"could increase China's welfare effect by 1.33%, and increase Chinese un-skilled workers'wages by 1.8%. Meanwhile, the potential further corporation with India and Australia is also in China's best interest. China should improve its understanding and recognition to"ASEAN+6"model, initiate bilateral and multilateral economic corporations, regard the efforts of enriching the content of East Asia Corporation as development priority, and build up a well-formed foundation for East Asia Free Trade Area.