Research On The Economic Effects Of China-GCC Free Trade Agreement

In the new era of economic globalization and regional economic integration,each country is actively seeking to establish good economic and trade cooperation with other countries or regions,so that it can better integrate into the world economic market.For the stagnation of the Doha negotiations and the difficulty in establishing a framework for multilateral cooperation in the short term,so many countries begin to seek to establish bilateral partners.The history of China's establishment of bilateral free trade areas with other countries is not long and it started relatively late,but in recent years china has paid more and more attention to this.At present,China has signed free trade agreements with 16 countries and regions and established free trade zones.In addition,11 free trade agreements are under negotiation and 11 free trade agreements are under study.At present,the GCC has signed free trade agreements with Syria and Lebanon.At the same time,the GCC is negotiating with Japan,India and China on free trade areas.The China-GCC Free Trade Area has been the focus of negotiations and studies between both sides.The trade between China and the GCC is highly complementary.With the development of China's economy,the demand for energy resources is also growing,and the dependence on energy is increasing.Domestic energy resources cannot satisfy China's.demand.As we all know,the GCC is the “world oil depot”,which has rich in oil,and a huge amount of natural gas storage.It is one of the world's largest oil and gas exporters.Building China-GCC Free Trade Area can not only meet China's demand for energy,but also help solve China's long-term trade deficit with the GCC.This paper uses GTAP9 to set up 8 possible scenarios for simulation,and quantitatively analyzes the GDP,welfare levels,imports and exports,terms of trade,and industrial output that are terms of effects that the China-GCC FTA brings to China,the GCC,and countries with greater trade links with China and the GCC.In addition,combined with the opportunities and problems faced by the China-GCC FTA under the new situation,it proposes countermeasures to accelerate the negotiations between the two sides.The overall grasp of the opportunities and challenges that China and the GCC are facing will help China make the right strategic choices in the negotiation of the FTA.As the world's largest developing country and the main leader and participant of the China-GCC FTA negotiations,China should play its due role in the process of advancement,so as to achieve economic and trade cooperation between China and the GCC countries continuedly develop and facilitate the early signing of the China-GCC FTA.The study finds that firstly,if China-GCC FTA establishes and reduces tariff,technical trade barrier and strengthens the infrastructure construction of both parties to enhance the degree of interconnection between the two sides,it will bring positive effects to both China and the GCC.Secondly,the contribution of tariff to economic effects is getting smaller and smaller.Thirdly,the contribution of technical trade barriers to economic and trade is getting larger and larger and it accounts for a high proportion of weights.Fourthly,the improvement of the interconnection between the two sides plays an indispensable role in the overall economic and trade effects of the two sides.Finally.international relations and national security still require attention.