Financial Tactics To Promote China-Asean Trade Facilitation

The impact of the U.S. subprime mortgage crisis shown that China depending on United States, Japan and Europe market led China’s economy to be vulnerable. With seeking sustainable and stable development, China needed to expand the scale of trade with other countries. It could gradually reduce the dependence of China’s economy on the single market. China-ASEAN Free Trade Area covered11countries and a quarter of the world’s population, whether geographic advantage or market potential in this huge market, China and ASEAN should have closer economic and trade relations.Although the trade volume of China-ASEAN Free Trade Area increased, due to the competition in the industry, transport, customs clearance, settlement and other aspects friction, the dependencies of trade between China and ASEAN alienated increasingly. Beside watching the success of a free trade zone,we should be aware that the enhancment to trade scale by lower trade barriers is reducing.The bilateral trade needs more direct measures to promote up.Finance is a key sector in the economic development, and is the fundamental part in the process of constructing the free trade zone. Because of this, it leads the main issues in this article.With the certain development of finance and economy, what kind of financial measures, or how to use financial resources, can enhance bilateral trade facilitation and economiy cooperation in short term. The whole article is to answer this question.Firstly,it summarized the basic operating mechanism from financial promotion measures to trade scale and trade facilitation.Secondly, it used China—ASEAN trade data in latest10years, to explain how tight the trade between China and ASEAN.And then it summarized the undertaken financial promotion measures between China and ASEAN.So that it can overview the outline of financial cooperation and trade situation. After that, Johansen cointegration analysis methods and the VAR model with cointegration constraints, gave out the relationship about China—ASEAN trade tightness, financial scale in ASEAN,exchange rate indicator and government expenditures.And Impulse Response model and Variance Decomposition gave out the transmission mechanism among the four indicators.It can identify the weak link of the current financial cooperation effectively.Finally, based on the empirical analysis and the mechanism of enhancing international trade and trade facilitation by financial sectors,it builded up a systemic financial recommendations to enhance the level of trade facilitation.The results of this study showed, that the expansion of RMB assets in the ASEAN countrieS,stabilisation of the exchange rate between China and ASEAN countries, enhancment of trade-related infrastructure,can enhance the trade facilitation between China and ASEAN.But the three conditions required wider cooperations between governments.