The Opportunities And Challenges Of Yunnan In Vision Of China-ASEAN Free Trade Area

For a long time the global economic development and its evolution pattern have been suffering all kinds of challenges, especially the current euro zone debt crisis and the Occupy Wall Street aggravate this challenge, however, no matter how the trend of economic globalization and regional economic integration are irrevocable. As a member of WTO, during the process of integrating into the international economic system, it seems actively joining into this trend is it the best choice for China.China and Southeast Asian nations have a long and friendly communication history. And since the ancient time to today, there are thousands of Chinese have been migrating to Southeast Asian countries and making tremendous contributions to these countries. At the background of the rapid development of the economic globalization and regional economic integration, the cooperation between China and Southeast Asian nations in politics, economy and culture also show new development trend. On November 4,2002, the subscription of the Framework Agreement on China-ASEAN Comprehensive Economic Cooperation signed the economic and trade cooperation between China and ASEAN entered into a new stage. The main purpose of this Framework Agreement was improving and strengthening the economic, trade and investment cooperation among different nations; the main content of it was gradually reducing and eliminating the tariff and non-tariff barriers, and achieving the liberalization in service trade and investment filed; from the schedule angle, the normal products would reduce the tariff since 2005, and the tariff of the normal goods among China and ASEAN six should be reduced to zero in 2010, but among China and another 4 members can be achieved zero in 2015. Besides, the Framework Agreement also made some material rules about the Early Harvest Program, according to the rules, China and ASEAN countries should reduce those listed goods' tariffs of Early Harvest Program since January 1,2004, but the 188 agricultural products' tariffs between China and Thailand should implement the zero tariffs since October 1,2003. On August 15, 2009, along with China and ASEAN signed their last agreement about the establishment of China-ASEAN Free Trade Area, which was the Investment Agreement on China-ASEAN Free Trade Area, signed China and ASEAN have finished their major negotiations about establishing China-ASEAN Free Trade Area. On January 1,2010, the biggest free trade area—China-ASEAN Free Trade Area (CAFTA) formally achieved its establishment, this area includes 1.9 billion people, and it is over 1400 million square kilometers, the total GDP and trade volume are 6 trillion and 4.5 trillion dollars, it's not only the area has the most population, but also the largest area composed by developing countries. Further more, it has become the third largest regional economic organization after the European Union and the North American Free Trade Area.Without questions, the establishment of China-ASEAN Free Trade Area will have tremendous effects both on the economic and trade of China and also on the global economy. On the one hand, the establishment of China-ASEAN Free Trade Area can promote the economic and trade contacts between China and Southeast Asian nations. Along with the elimination of tariff barriers, the effects of Trade Creation will get more and more conspicuous. Since the implementation of Early Harvest Program and the Agreement on Goods Trade, China has became the fourth trade partner of ASEAN, and the bilateral trade volume also increased from 130.4 billion dollars of 2005 to 292.8 billion dollars of 2010. Due to Asian nations have the cost and undercapacity problems in consumption goods and mechanical equipment manufacturing, so it offers a huge market for China export enterprises. Meanwhile, China is the main importer of ASEAN countries'oil, natural rubber, wood, minerals and other resources products, etc. so China and ASEAN countries have their complementary advantage, and just because of this advantage, the establishment of China-ASEAN Free Trade Area will offer an tremendous development space for China and ASEAN countries in agricultural goods trade and agricultural technical cooperation, etc. On the other hand, the establishment of China-ASEAN Free Trade Free Area not only can accelerate the process of RMB internationalization, but also can accelerate the development of the trade and economic integration of East Asia. For a long run, along with Japan, South Korea and Indian carry their negotiations with ASEAN to establish their own free trade area, a larger East Asian Free Trade Area or East Asian Economic Community with more participants will come to sight.Because of historical and other reasons, although Yunnan has made some achievements in recent years, however, its economic development level is still fall behind those domestic developed cities. Fortunately, the establishment of China-ASEAN Free Trade Area and the implementation of the national bridgehead strategy bring historic opportunities for the striding development of Yunnan, because form the angle of geographical advantage, Yunnan is linked with ASEAN countries by the same mountains and rivers, so it has been an important traffic route for the communication between China and Asian nations since ancient times, what's more, it is also the forefront of the open policy of China to ASEAN. Therefore, if Yunnan can grasp the opportunity and combine the construction of China-ASEAN Free Trade Area and the bridgehead strategy, and make full use of its location advantage to improve the role of Yunnan in China-ASEAN Free Trade Area, then we do believe that Yunnan can grasp this historic opportunity to promote its economic and social development.However, even the establishment of China-ASEAN Free Trade offers opportunities to develop Yunnan, it also brings challenges to Yunnan. Therefore, this thesis will take the opportunities and challenges of Yunnan in China-ASEAN Free Trade Area as the researching subject, and comprehensively adopt the document analysis and mathematical analysis to analyze the factors which influence the development of Yunnan at the background of China—ASEAN Free Trade Area. Firstly, the first chapter not only elaborates the background and the significance of this thesis, but also states some related research status at home and abroad; and in the following chapter, this paper gives some general introductions about Yunnan, the Association of Southeast Asian Nations(ASEAN), and it also introduces the establishment of China—ASEAN Free Trade Area; as an important chapter, the third part focuses on reviewing the history of border trade between Yunnan and its ASEAN neighboring nations, what's more, it detailedly analyzes the current trade status and characteristics of Yunnan and ASEAN; in the fourth chapter, it elaborates what's kind of effects the China-ASEAN Free Trade Area brings to Yunnan's economic development, meanwhile, the SWOT analysis is adopted to analyze how Yunnan can develop itself rely on the China-ASEAN Free Trade Area; without questions, the establishment of China-ASEAN Free Trade Area is a good opportunity for Yunnan's social and economic development, but how can Yunnan grasp it and make full use of this opportunity is a question. So in the fifth chapter, the author gives some countermeasures on how Yunnan can develop itself based on the mentioned SWOT analysis.Through researching how Yunnan can grasp the historical opportunity of the establishment of China-ASEAN Free Trade Area to develop its own economy and society, the conclusion of this paper summarized are:the strategy and weakness of Yunnan; the trend of intra-trade of regional economy, the establishment of China-ASEAN Free Trade Area and tariff factor, the opportunity of RMB settlement in Yunnan border trade and the implementation of the Bridgehead Strategy; the possibility of trade diversion and border trade dwindling, and the challenge from domestic provinces, especially from Guangxi province, can affect the trade and economic development of Yunnan. Based on these analyses, three countermeasures are supplied to solve these issues, namely are adjusting and optimizing trade structure, improving competitiveness; vigorously promoting the development of border trade of Yunnan, and enhancing the competitiveness of Yunnan at home.