Estimation Of Economic Effects Of Service Trade Liberalization In China’s Regional Trade Agreements

Since the 21th century, the importance of service industry has been improved every year, and major economies tend to pay more attention to service liberalization during the economic cooperation. Since the slow process of service liberalization in multilateral system, many countries such as EU and America try to include service liberalization into regional framework and consider it as an important issue during regional economic negotiation. For China, we have included service issue in the 14 free trade agreements (FTA) which we have assigned, but the high requirement of service liberalization in new regional integration brings challenges to China’s service liberalization.Based on this situation, this paper discusses the development and economic effects of service trade liberalization in China’s FTAs. Firstly, this paper summarizes service clauses in 14 FTAs and analyzes the development and insufficiency of service liberalization from the sign progress and clause setting. Then, this paper takes the ASEAN as an example, discusses the development of bilateral service liberalization and uses the frequency tool to quantify the openness of the two specific commitments of CAFTA. Subsequently, this paper includes the quantified index of openness into the Global Trade Analysis Project model, and assesses the effects of the second commitments, the upgraded CAFTA and full liberalization on macroeconomics, sectoral output, trade and some other economic variables of China and members of ASEAN.The results show that China’s service trade has a favorable development and an improvement in openness, but doesn’t improve a lot in the terms setting. Besides, there are some weaknesses compared to GATS, especially in the key definitions, coverage of specifications and the intensity of commitment. When comparing to the TPP, China’s service clauses have such shortcomings in chapters setting and commitments methods. Although the service liberalization has improved greatly between China and ASEAN since the CAFTA has come into force, the liberalization level is still very low and there exist big differences between members of ASEAN. The second commitments in 2011 improved service openness, which bring positive economic effects especially for China and Singapore. For the ungraded version of CAFTA and full-liberalization situation, China and Singapore benefit a lot and other countries’ effects have also been improved.