A Research Of The Trade Effect Of China-Singapore Free Trade Area

Singapore is the most developed country in Southeast Asia and the second developed country in Asia.China-Singapore Free Trade Zone(CSFTA)was formally established in the year of 2008.Compared With the establishment of China-ASEAN FTA in 2010,CSFTA was earlier,covered the wider range of products and services.In the past analysis of China and Singapore's industrial structure of the literature,the authors argued that the industries of the two countries are more complementary and less competitive.Complementary industrial structure is more able to promote trade development between the two countries.At present,the two countries not only have economic and trade links,but also have more strategic relations in the complex international politics.At present,the establishment of CSFTA has been more than eight years' time.Did CSFTA play a role in promoting trade between the two countries? In the end,did it produce a net trade creation effect or a net trade transfer effect? Was it more effective in China,or more effective in Singapore? These issues require us for further analysis and research.This paper will study the trade effect between China and Singapore from the aspects of theoretical research and empirical measurement,and put forward the corresponding suggestions and countermeasures according to the results of the analysis.The theoretical analysis of this paper uses the theory of customs union.The empirical analysis is divided into two parts.First,the two indices of RCA index and TCD index are used to analyze the trade effect brought by the establishment of the free trade area.Secondly,the trade creation effect and trade transfer effect of the two countries are analyzed by the Balassa model.Finally,according to the relevant analysis we propose the corresponding recommendations.The results show that the establishment of CSFTA to a greater extent to expand China's exports,and has created a more significant impact on imports of trade creation in Singapore.