The Trade Effect Of CAFTA On Guangdong Province

In 2015,CAFTA has completed the upgrade,the relationship between the two sides runs into a new level.As the hub of trade,Guangdong has actively developed the exchanges and cooperation with ASEAN countries and now has been the largest province of economic and trade cooperation between China and ASEAN.In the background of “one belt one road”,It becomes more and more important for Guangdong to take full advantages of the bridgehead and further strengthen the trades with the ASEAN countries.In this paper,we analyze and evaluate the trade effect from CAFTA to Guangdong regarding Guangdong as a vital regional economy and a trade strategy executive.Firstly,this paper summarizes the work of previous experts and scholars,secondly,we use the RCA index and TI index to analysis the products' market competitiveness and the changes of trade degree of two sides.Thirdly,based on the gravitational model,we test the trade creation effect and trade diversion effect from CAFTA to Guangdong and the export trade potential from Guangdong to five ASEAN countries.Finally,according to this empirical structure,we put forward some proposals which are in line with the development interests and the national strategic needs of Guangdong.Based on the above ideas,this paper gets the following conclusions:Since the establishment of CAFTA,the bilateral trade between Guangdong and ASEAN has been increasing,now ASEAN has occupied an increasingly important position in Guangdong's foreign trade.And the trade deficit between Guangdong and ASEAN has gradually narrowed.The industrial structure between Guangdong and ASEAN are both similar and complementary.Similarity is mainly reflected in the labor-intensive products and technology-intensive products,complementarity shows mainly in resource-intensive products and capital-intensive products.From the perspective of trade integration,ASEAN's economic dependence on Guangdong is higher than Guangdong's on ASEAN,the trade relationship between Guangdong and ASEAN is growing closer while that between ASEAN and Guangdong is growing sparseBy introducing the gravitational model,we find that the establishment of the free trade area has brought significant trade creation effect to Guangdong,and Guangdong's export trade creation effect is greater than import trade creation effect.At the same time,the imports from Guangdong to the countries outside CAFTA have a certain trade diversion.But on the whole,the trade creation effect and trade diversion effect didn't reach the expected level of significance,and the trade between Guangdong and ASEAN was in an insufficient state which show that CAFTA didn't play a full role in Guangdong Province.The exports from Guangdong to ASEAN still have considerable growth room.The upgraded version of CAFTA and the 21 st century Maritime Silk Road are two major opportunities to improve the trade relationship between Guangdong and ASEAN.So from the industrial structure adjustment,infrastructure construction and government cooperation these three aspects I give some recommendations.Guangdong should use the national Good measures to coordinate the complementary development of key industries and optimize the bilateral trade structure.