China - Asean Free Trade Area: Background, Interests And Prospects

Since late 1980's, especially in 1990's, with the emergence of an integrated European market and the changed attitude of United States towards the regional economic integration, there has been a new upsurge in regional cooperation with the development both in cooperation depth and extent. Under this international background, China brought forward the notion of establishing China-ASEAN Free Trade Area (CAFTA), and signed with the ASEAN, in November of 2002, the "Framework Agreement on China-ASEAN Free Comprehensive Economic Co-operation", a project of establishing CAFTA before 2010. This is the first time of China to take part in a regional integration organization, and the strategic decision will surely have far-reaching influence not only on bilateral trade and economic development of the both parts, but also on the progress of Asia regional integration, and even that of the global integration. Why has the ASEAN chosen China as a partner to establish an FTA? What is the cooperation foundation for CAFTA? Will CAFTA bring China and the ASEAN all the remarkable economic results expected? And what will be the difficulties in realizing the cooperation objects? All these questions are being followed with interest. This thesis is going to analyze, using positive analyzing method and plentiful economic and trade data, the static and dynamic welfare effects of China and the ASEAN possibly to be benefited from CAFTA, followed with the multidimensional analysis of the economic competitiveness and complementarities between China and ASEAN, and then based on which, discuss the possibility of the appropriate international specialization within CAFTA. Besides, other than the study only on the Sino-ASEAN free trade itself, , the article also tries, as being a breakthrough, to analyze from various angles the mutual influences between CAFTA and APEC on the level of Asia-Pacific integration, and between CAFTA and WTO on the level of global integration, in order to make deeper discuss of the significant of CAFTAThe paper consists five parts: Firstly, it explains the theory of regional economic integration, as a foundation of the following analysis.Secondly, it expounds the background of CAFTA and the progress of the agreement. Thirdly, it analyzes the static and dynamic benefits in the view of economic complementarities, trade structure and competitiveness. In the last part, based on preceding analysis, it looks forward to the future of CAFTA and its positive role in the progress of East Asia, Asia-Pacific and even the global economic integration.