Study On How Foreign Trade Of China Influenced By Preferential Duty Of CAFTA

In order to promote national economic development and enhance their international competitiveness, China and the ASEAN countries establish a China ASEAN Free Trade Area (CAFTA). Through tax cuts, a wide range of economic cooperation, CAFTA establish a comprehensive economic cooperation framework for trade liberalization. Through 13 years of construction of CAFTA and the development of bilateral trade, currently CAFTA has entered into a new stage that the vast majority of products have achieved the zero tariffs. With the development of CAFTA and the tariff cut, China and ASEAN bilateral trade volume grows in a rapid speed, China has become the largest trading partner of ASEAN, and ASEAN has also become China's third largest trading partner. China and ASEAN countries have kept friendly relations and cooperation, which not only have promoted the development of bilateral trade, generated economic benefits, improved the comprehensive competitiveness, but also conducive to promoting their friendly diplomatic relations, strengthening international cooperation and safeguarding regional peace and stability.CAFTA's tariff reduction policy began in 2004, in accordance with trade agreements, tariff cut in China was finished after 2010. Except for sensitive commodities, the tax rate of other commodities has decreased to zero; ASEAN countries have gradually completed from 2011, only Cambodia and Thailand bilateral tariff reduction policy will complete until 2018. To protect their own national industry, infant industries, countries listed a series of the sensitive products according to its own national conditions and agreement, under normal circumstances the product on the list may not cut rates to zero, and the amount of import products have to be within restrictions, but tariffs is reduced on certain extent. Currently CAFTA 0 tariff has covered both 90%-95% of tariff lines of products. CAFTA has received significant effect development, and trade products among CAFTA focused on labor-intensive tools, bilateral complementary products and so on. In recent years, bilateral trade volume increased steadily, total trade in 2014 has reached 480 billion US dollars, accounting for total trade between China and other Asian countries more than 20%, which has been an important position in China's foreign trade; since 2012 from China to ASEAN by the trade deficit into a trade surplus, a large number of products are exported overseas. Empirical analysis on China and ASEAN bilateral trade volume and trade volume of electrical equipment products reflects that GDP should promote the development of the commerce, while the distance between the countries and the import tariff should do harm to the bilateral trade. CAFTA tariff cuts policy has played a positive role in promoting the bilateral foreign trade, but gradually weakened; some sensitive products failure to achieve zero tariffs on bilateral trade impediment, so they have to play a negative role in trade.Through the analysis of CAFTA and North American Free Trade Area's development, it can provide a large amount of experience for the establishment of trade agreements of China, Japan and South Korea free trade area, and others in the future. For the establishment and future development of a free trade area, they should establish a proper Tariff Concession targeted, according to the economic size of the countries, the basic national conditions, development potential and other factors. The policy should be formulated against various countries and industries, to facilitate countries of its development of trade, the greatest trade effects, and to reduce the adverse effects of tariff cuts on domestic industries. In addition, countries should strengthen non-tariff barriers for trade policy development, establishing an effective mechanism. Timely strengthen the free trade agreement and relevant policies to ensure that all enterprises can make full use of the advantages of free trade zone and tariff rates.In recent years, with the rapid development of trade, China has already established an important role in global market. China has actively taken part in the development of regional economic integration. CAFTA has entered into a new stage of development, and it lays a solid foundation to update. When China establishes the free trade area with Japan, South Korea or other countries, we will take all the experience from CAFTA and NAFTA into consideration. Tariff reduction policy and the development will lead to a large trade creation effect and achieve the China's foreign trade and investment liberalization.