Research On Economic Cycle Synchronization And Transmission Mechanism Of China-Five ASEAN Countries

With the economic globalization development,the mutual transmission mechanism of the global economy has become smoother;a country's economic will be transferred to other countries in a short time.At last,it will form the regional even global economic cycle fluctuations.In an open economic situation,there are three main channels for international economic transmission mechanism: international trade;international direct investment and international capital markets.In addition,as the China-ASEAN Free Trade Area established the economic and trade cooperation between China-ASENA will be more free and convenient.In this regional,the economic fluctuations of a country will be transmitted to the other countries by these three channels,meanwhile it can affect those countries' economic operations.This paper starts with results of predecessors' research and summarizes the research of scholars at home and abroad,at last,the author conclude that the two transmission mechanisms of international trade and international capital market have a significant promotion to the synchronization of economic cycle.Based on this conclusion,this paper analyzes how the two transmission mechanisms affect the synchronization of the economic cycle and prove it by using data evidence.This paper uses the GDP gross rate of 1970-2017 and the GDP,trade data of 2003-2017 and FDI data of 2003-2016 to measure and analyze the connection of trade and investment and also the dynamic development trend between China-ASEAN.First,this paper uses HP filtering and Pearson correlation coefficient to calculate the economic cycle of China and ASEAN countries by using the annual GDP growth rate of 1970-2017 and the results prove that in 1970-1991,the economic cycle between China and the five ASEAN countries was completely out of sync.Since 1992-2017,the economic cycle between China and the five ASEAN countries has begun to synchronize.At the same time,the Pearson correlation coefficient also confirmed the results of HP filtering.From 1970 to 1991,the correlation coefficient between China and ASEAN countries was negative,but,in 1992-2017,the correlation coefficient between China and ASEAN countries was positive,and there is still much room for improvement.Second,the paper uses GDP from 1995-2017 for ADF test and Granger causality test to test the causality between China and the ASEAN economy,and the analysis shows that China's economic growth is the cause of economic growth in the five ASEAN countries.Finally,the paper uses the structural vector autoregressive(SVAR)model and impulse response to analyze,and the results find that Chinese economic fluctuations have a positive impact on five ASEAN countries' economic and the trade,and also,the effect of foreign direct investment is same as the economy.Since China's economy volume is larger than five sample countries selected in this paper,and China's economic and trade cooperation field is more extensive than them,so,this paper mainly studies the one-way transmission of economic fluctuations from the perspective of China.In addition,China's capital market has not been deeply open,and the effect of capital connection is also one way.According to the analysis,China's economy has a positive effect on ASEAN countries,and also,the impact is becoming more and more important,meanwhile,foreign direct investment needs to be deeper cooperation.Based on the above judgments and analysis,this paper thinks that China as a big country,because of the spillover effect of its development on neighboring countries,China should expand economic and trade cooperation with ASEAN countries,and strengthen coordination economic policies with ASEAN,as well as,China also should expand foreign direct investment,especially ASEAN countries.In addition,from the perspective of ASEAN countries,they should play their own advantages on trade and industrial complementarily with China so that they can have a deep cooperation.On the other hand,ASEAN countries also should accept Chinese investment to deepen the exchanges of technical experience between the two sides.And then,they must trust each other so that they both can enhance the ability of resisting risky to achieve a win-win situation.