China And East Asian Economic Integration Under The Background Of One Belt And One Road

In 2013, President Xi Jinping proposed the strategy of "one belt and one road", which will serve as an important platform for regional economic cooperation that China gives priority to. As we all know, the strategy links the most dynamic economic zones in the world-East Asia and Europe, making them more closely related concerning infrastructure, investment and trade. Ancient land and ocean silk roads are given new meanings by the time.With the establishment of Asian Infrastructure Investment Bank and Silk Foundation that stimulate regional economic integration, East Asia close to China will experience a new development trend. However, the emerging of TPP and RCEP would reshape the East Asian integration process. In this paper, we will take advantage of comparative advantage theory, flying goose model and new Economic Geography to discuss the rationale behind economic integration. Therefore, discussing the mechanism of the economic integration, analyzing how China, East Asia and the World affect each other and exploring the factors that spur or impede integration process would mean a lot.Regional integration is an important feature of world development, and East Asian economies have make some progress in the economic integration through extensive time and efforts. In contrast to EU, East Asian integration needs to be furthered. In fact, economies within EU have similar political regimes, balanced economic development levels and cultural similarity, all of which contributed to its integration. However, huge economic development gaps, different political systems and territorial disputes make it impossible to be united in the trade, monetary and diplomatic polices. It is worth noting that, since the second half century of the 20th century, regional economic integration has been all the rage in the international economic activity; it draws world attention and inspires many people. With the establishment of EU and NAFTA, they bring huge benefits to their members. When realizing that cooperation is lacking and trying to keep up with the development trend, East Asian economies have expressed their interest to reinforce their relations to further the economic integration.The primary goal of this paper is to analyze the present and its future development trend of East Asian integration. Based on data concerning trade and investment integration,we will analyze the progress made in this region from the perspective of quantitative analysis. The empirical analysis indicates the factors affecting the economic integration, which paves the way for future conclusions. This paper is comprised of six chapters:the first one is a brief introduction of the background, theoretical and practical meanings and analysis tools of this paper. The second chapter focuses on literature review, which is a through analysis of results from other scholars. The following one concentrates on theoretical analysis. In this chapter, we will discuss the flying goose model, international investment theory, regional economic integration theory etc. By linking these theories, we will deeply understand the rationale behind East Asian economic integration.The next chapter is descriptive statistics,which is very important to the whole paper. We will analyze the economic integration in East Asia from the perspectives of regional trade share, trade intensity index, trade growth rate, FTAs and investment treaties, in an attempt to show the progress made by East Asian economies. The fifth chapter is about empirical model. In this chapter, we will group different nations and use VAR model to indicate the present and the future development trend, examine mutual contributions to each country and discuss China’s position and influence in the process of East Asian economic integration. The last chapter is centered on some conclusions and recommendations. We will come up with candid advice on how to further East Asian cooperation in the future. It concludes that East Asia should give priority to open regionalism, free trade agreements, political dialogue and policy.