The Economic Impact Of The China-ASEAN Connectivity In The Context Of "Belt And Road" Initiative

The "Belt and Road" initiative opens a new chapter in the history of world connectivity. One of the connotation of the "One Belt One Road" initiative is to create a modern version of connectivity, which well complements the Master Plan on ASEAN Connectivity. Both China and ASEAN now manifest a strong interest on connectivity. This paper firstly analyzes the concept and visions of the connectivity, and reviews the current connectivity cooperation, including policy coordination, facilities connectivity, unimpeded trade, financial integration and people to people bonds. Secondly, the paper explores the dynamic of the China-ASEAN connectivity cooperation, and concludes four major economic effect:Economies of Scale Effect, Trade Creating Effect, Competition Effect and Normative Behavior Effect. Thirdly, the paper analyzes the impact of the connectivity on China economy from both qualitative and quantitative perspectives. The Gravity Model is applied to testify the economic benefits brought by China-ASEAN connectivity. Fourthly, a short discussion about ASEAN's strategic stake is followed. The research indicates that the China-ASEAN connectivity significantly promotes the bilateral trade exchanges and provides more economic benefits. As a result, the connectivity cooperation between China and ASEAN is in the interests of both sides. Meanwhile, the process of connectivity cooperation will inevitably encounter some challenges, especially from political side. In response to these challenges, the paper proposes certain corresponding countermeasure in the last part.