The Study Of Comparison Of The Trade Effects Of Guandong Province And Jiangsu Province On The Framework Of CAFTA

With the development of regional economic intergration in the world,more and more countries begin to corporate with each other to build a free trade area,CAFTA which play an important role is the first a free trade area that China joined in these years,with the early harvest plan implemented from 2004,trade relationship between China and ASEAN increase closely.From the former establishment of CAFTA,China which overpassed Japan and has a potential future in development has been the largest trade parterner of ASEAN.Guangdong and Jiangsu province has been the vanguard of economic development in China,the trade data with ASEAN between every province shows that Guangdong and Jiangsu province occupy an significant position,they accounted for more than 1/3 of total trade between China and ASEAN,so the research on the trade effect of two provinces and realizing their difference is very important.The paper based on the regional integration theory,begins from trade situation of China in CAFTA and leads to the study.Then based on the level and the structure of trade,we found that the difference existed.On the level,the trade scale of Guangdong province was larger than Jiangsu.On the structure,Jiangsu and Guangdong had the same market structure and product structure.Then we found two provinces had a complementary relationship with ASEAN countries in resource-tensive products,they had a competitive relationship between ASEAN countries in labor-intensive and technology and capital intensive products,they have huge space in future.Guangdong had a higher product competitiveness than Jiangsu.Then we analyzed the static trade effect of two provinces.With the comparison in and gravity model,we found that Guangdong province had a higher net welfare effect.Then we based on the investment angle to analyze the dynamic effect,although Jiangsu had a higher investment creation effect and more competitive effect in the first years,but Guangdong had more space in future.At last,we provided some suggestions from Jiangsu perspective to learn the advantage of Guangdong.Firstly,Jiangsu province should grasp the development oppturnity because political and economic relationship have been improved,the government should take the lead and promote the corporation and actively integrate into the construction of the fta;secondly,Jiangsu province should promote FDI and speed up the promotion in service industry or manufacture industry in higher degree;thirdly,Jiangsu province should take their own advantage with the Internet market more and more prosperous;lastly,it is easy to increase the friendship between China and ASEAN countries when there are more and more small and medium enterprises,so they should build a system of electric trade to promote the establishment of free trade area,they can also reduce administrative intervention cost.