A Study On The Policy Effects Of Trade Liberalization And Investment Facilitation Between Guangdong And Hong Kong

The establishment of Guangdong experimental free-trade zone is an important measure to establish a new system of the open economy in Guangdong by the trade liberalization and investment liberalization between Guangdong and Hong Kong.From the point of this goal,CEPA(Closer Economic Participation Arrangement)built years ago can be seen as "pre-experiment" of this process.And from the perspective of Guangdong experimental free-trade zone,the main point is the trade liberalization and investment facilitation between Guangdong and Hong Kong,to construct the new system of the open economy of Guangdong.Thus,based on the heterogeneous enterprise trade theory,using Chinese customs database and China's industrial enterprise database from 2000 to 2007 matching large sample micro data set,this paper studies the effect of CEPA to Hong Kong-Guangdong export,investment,investment and export integration relationship of preliminary experiment results using various methods.The result shows that:(1)As for Hong Kong export to Guangdong,CEPA significantly increase the growth rate of trade between Guangdong and Hong Kong by using the DID(Difference in difference)method to remove observation errors and control endogenous condition;(2)As for Hong Kong's foreign direct investment to Guangdong,we found that CEPA largely promote the times and strength of investment,using Poisson regression model and DID method,from investment "frequency" and "strength" perspective;(3)Firstly,to explore the internal interactive system of trade and investment between Guangdong and Hong Kong,we found that Hong Kong's FDI to Guangdong significantly boost the export to Guangdong,using PSM(Propensity Score Matching)method after solving the mixed "bias" and "selection bias".Secondly,using econometric model,this study examines the concrete relationship between Hong Kong's outward FDI and self-produced products exports to Guangdong over the period from 2001 to 2006 after CEPA being carried out,creation effect or substitution effect? The results show that it has significant creation effect overall.However,the relationship varies across three different industries and the effects to textile manufacturing industry(industry code from 13 to 24),resource processing industry(industry code from 25 to 34)and mechanical electronics industry(industry code from 35 to 42)are 30.22%,26.27% and 21.52% respectively.Underlying of the above research,as CEPA is the milestone of China(Guangdong)Pilot Free Trade Zone,this paper further discussed that important effect of "pre-experiment" CEPA to Guangdong experimental free-trade zone.Finally,from the point of speeding up the Guangdong new system of the open economy,we made suggestions to government on the construction of Guangdong experimental free-trade zone.