Establish A Study On The Economic Effects Of The China-India Free Trade Zone

China and India are the two largest developing countries in the world.In recent years,both countries have maintained high speed of economic growth.Especially in the face of the world economy is growing weak,India's economy has bucked the trend,the growth of GDP in the past two years,7.3% and 7.6%,the growth rate surpassed china.At the same time,trade complementarity between China and India is strong,industrial development in different stages,and broad prospects for cooperation.With the increasing bilateral high-level visits,deepening bilateral cooperation in various fields,Sino Indian trade is showing a high growth trend,the bilateral trade volume from $1 billion 163 million in 1995 increased to $71 billion 650 million in 2015,the annual compound growth rate of 23%.China has overtaken the United States and the United Arab Emirates as India's largest trading partner and the largest source of imports.The importance of trade between China and India is becoming increasingly prominent.Economic globalization makes the economic ties between the countries and regions of the world have become increasingly close.Establishing free trade area and promoting regional economic integration,has become an important means for countries to develop trade,deepen economic and trade cooperation.Although in the past year,some developed countries have shown the trend of counter globalization and could lead to a new round of Global trade war.However,from the trend of world economic development and the developing countries,the establishment of free trade zones and the development of foreign trade are still an important way to promote economic development.As an important emerging economy in the world,the study and construction of the Sino Indian free trade area is of great significance for deepening Sino Indian Economic and trade cooperation and promoting world trade liberalization.This paper starts from the current situation and problems of China and India's trade development,and analyzes in detail the economic and trade cooperation between China and India.Then,through the analysis of the theory and examples of the FTA,the paper discusses the feasibility of the Sino Indian free trade area from two aspects: the construction of the Sino Indian free trade area and the obstacles.In the two part of the basis of the above,put forward several possible schemes for China and India FTA,FTA was simulated by the eighth edition of GTAP software,so it can draw the conclusion that.Finally,some suggestions and prospects are put forward to strengthen the economic cooperation between China and India,and to promote the process of regional integration in China,India and Asia.The basic conclusion is: the establishment of China India FTA foreign trade volume between the two countries increased Chinese output and the level of social welfare promotion,but India's output and the level of social welfare will decline slightly;the establishment of China-SAARC FTA can make both countries benefit,China output and social welfare level significantly high,India's output was essentially flat,the level of social welfare will increase.Although the establishment of free trade zones has different impacts on the two countries,China and India are world powers and need to shoulder the responsibility of continuing to promote world economic growth.At present,the economic development in both countries is good,and it is a powerful engine for world economic growth".Both countries have a huge market and abundant labor force,and the economy has the potential to maintain high growth.With the continuous improvement of bilateral relations in recent years,promote the establishment of a free trade area between China and India,deepen economic and trade cooperation,not only can benefit from the economic globalization,but also to the two ancient civilizations to carry out deeper cooperation and achieve win-win cooperation and build a community of destiny has important role.