Research Of Chinese FTA Mode Under The Background Of "One Belt One Road"

Currently while the multilateralism represented by WTO is struggling, the regional economic integration is thriving, a developing trend with which the One Belt One Road advocated by China is precisely complied. The key for deepening mutually beneficial cooperation in One Belt One Road lies in realizing unimpeded trade, which is also a major focus of One Belt One Road Initiative. Therefore it is in urgent need to study and discuss in which mode and by what standard to promote unimpeded trade and to build high-standard free trade areas.Based on new trade theory, this thesis analyzed the welfare effect due to regional economic integration under boarder open and domestic open. Characteristic analysis as well as lateral comparison on the modes of 10 China FTA modes based on the developing achievements of existing free trade areas in China were also conducted. And quantitative description of tariff concession and non-tariff barriers reduction was conducted as well. Meanwhile, this thesis applied GTAP model to analyze the macroeconomic effects, industrial structure changes and import and export fluctuations from perspectives of comparative static analysis and dynamic analysis on the basis of the 10 FTA modes. Major conclusions are as follows.(1) The economy integration modes of boarder open and domestic open both will increase the welfare level of relating countries. But compared with boarder open, the welfare effect of economy integration under domestic open will be more significant.(2) By comparing the 10 existing free trade agreements in China, this thesis finds that China Korea Free Trade Agreement emphasizes more on the domestic open in reginal economy integration and is an agreement of the highest standards among the domestic open modes in China. Through simulation analysis, this thesis also finds that China and the countries along the Belt and Road can achieve the largest increases of GDP and welfare level in promoting the unimpeded trade in One Belt One Road under this China Korea FTA mode, with GDP increasing by around 2.9% and welfare level by 725.4 billion U.S. dollars.(3) From the perspective of China, the unimpeded trade in One Belt One Road in China and Korea FTA mode will enable GDP of China to increase by around 2.69%, and import by around 10.11%, export by 6.62%, as well as 0.95% in improvement of trade conditions. In terms of output, the largest decrease will occur in energy and mining industry by around 9.33%, while the largest increase will occur in public utilities and construction industry by around 3.89%, which manifests a tendency of industrial structure transformation from the first and second industries to the third industry.(4) From the dynamic perspective, the marginal effect of promoting unimpeded trade in One Belt One Road on GDP and welfare level of China appears to increase first and then followed by a decrease, the peak occurring in the seventh year with increases by 0.27% in GDP and 24.7 billion U.S. dollars respectively. Viewing from different stages, the accumulative effect of GDP and welfare level in the first 4 years will only account for 10% of the ultimate effect, while that of the first 15 years can account for 90%. It is suggesting that promoting unimpeded trade in One Belt One Road will be a triumph over adversity, with long-term interests highly surpassing the short-term interests.