Research On Economic Cycle Synchronization And Transmission Mechanism Of China-ASEAN

Since the1990s, the economic integration in East Asia began to accelerate, therelations between China and ASEAN have been strengthened, economic fluctuationshave influenced and conducted between each other, the economic cycle appeared tobe synchronous. The article use main method of economic cycle synchronization toexplore the phenomenon of economic cycle synchronicity between China and ASEANand studied the impact of trade intensity, intra-trade, bilateral direct investment,industrial structure on economic cycle synchronization.Firstly, the article analysed the general economic cycle synchronizationtransmission mechanism, from the eyesight of international trade, bilateral directinvestment and the industrial structure.Followed with the introduction of politicalcooperation between China and ASEAN, and then took advantage of datas between1992-2011, to measure and analyze the contacts and dynamic development of trade,investment and industry structure, research the problems existed between thecooperation.then used HP filter, Pearson correlation coefficient and the Grangercausality test to verify the synchronization of the China-ASEAN economic cycle.Then using mixed effects, GMM-IV estimate to analysis the panel data, to know thefactors affecting economic cycle synchronization between China and ASEAN.Through a series of qualitative and quantitative research, the conclusions are asfollows:(1) China and ASEAN have close economic ties，at the same time there existsome barriers in the cooperation. Bilateral trade between China and ASEAN has beenrapidly developed in the last20years, both China and ASEAN have a highdependence on trade, trade between China and ASEAN is an important part of eachother. ASEAN countries depend more on trade with China than China’s trade dependon the ASEAN countries. Secondly, since the set of free trade area, bilateralinvestment and technological cooperation between China and ASEAN have gained rapid development. China and ASEAN are each other’s main source of foreigninvestment. Besides, China and ASEAN are competitive and complementary in theindustrial structure, with the development of economic, competitiveness will be moresignificant. Besides, diverse Asia-Pacific strategy and imbalanced cooperationbetween the two sides hinder the deepening of China-ASEAN cooperation to a certainextent.(2) The real GDP growth rate of China and ASEAN appeared consistent cyclicalfluctuations, which means exist of economic cycle synchronization, and thissynchronization truely formed since the1990s. In addition, China’s GDP growth is thecause of ASEAN GDP growth, while, on the contrary, it not true. With the deepeningof China’s reform and opening up, China’s economic contribution to ASEAN’seconomy will be greater.(3) From analysis of factors in synchrony between China and ASEAN economiccycle synchronization of transmission channels, We can found that the trade intensity,FDI and industrial structure are the effective transmission channels.Trade intensitypromote economic cycle synchronization, while FDI, analogous industrial structure iscounterproductive in China-ASEAN economic cycle synchronization. Trade patternshave no significant effect on the economic cycle synchronization.Based on the above judgment and analysis, we learn that we need to expandeconomic and trade cooperation and economic policy coordination with ASEAN;secondly, we should selective use of foreign direct investment, control the capitalinflows effectively; Besides, make full use of mutual opening markets to deepentrade cooperation, create complementary chain and achieve mutual benefit.