Research On The Influence Of Preferential Rules Of Origin On China's Industrial Status In The East Asian Production Network

With the flourishing development of the Free Trade Area,the preferential rules of origin as the main features of the Free Trade Area are more and more important to a country's industrial status in regional.The preferential rules of origin change the way of enterprise resource allocation by stipulating the preferential tariff rates of origin,which has an impact on the regional production network and even the global value chain.How the preferential rules of origin play a role in the status of a country's industry is closely related to the development of the domestic industry.We calculated the GVC index and dominant comparative advantage of 16 industries in the manufacturing industry in East Asia between 1995 and 2011 with the help of the TIVA database released by OECD-WTO,which shows that the high-tech industry and medium high-tech industry are at the bottom of the value chain and it is urgent to upgrade.Moreover,the existing rules of origin are likely to cause trade friction and can not meet the needs of different industries.Then this paper explores the influence mechanism of preferential rules of origin on industrial status.The preferential rules of origin affect China's industrial status through three channels,namely trade costs?trade flows and investment flows.This is a major innovation in the theoretical level of this article.First,the rules of origin in East Asia is lacking of consistency,the cost of obtaining certificates of origin is relatively high,the using of regime-wide variable is limited,and the low level of Free Trade Area brings higher trade costs.The flows of trade reshaped regional value chain.The rules of origin will produce substitution effect and increasing effect of intermediate inputs.In this paper,the influence of the strict degree of origin rules on the trade flow is demonstrated by the econometric model.By comparing the differences in the trade share between the intermediate products and the final products of three Free Trade Area in East Asia,the economic effects of the rules of origin will have an impact on China's industrial status.Rules of origin will also affect China's industrial status by influencing investment flows.Finally,in order to give play to the role of strategic trade tools of the rules of origin and promote the upgrading of China's industrial status,this paper puts forward corresponding countermeasures.For example,we should actively strive for the rights to make rules of origin and build Free Trade Area with China as the axis country.Setting up different standards of obtaining certificate of origin according to the development status of different industries in China.Reducing the trade cost of rules of origin will enhance China's participation in the East Asian production network and further enhance China's industrial status in the East Asian production network.