Analysis On The Feasibility And Economic Effects Of The FTA Established By China-Eurasian Economic Union

In order to expand our scope of cooperation and mineral resources as well as under the "new normal" economy to seek new growth point,in order to steadily promote the development of China's economic stability and high quality,China put forward the "area" initiative,at the same time the Eurasian economic union with the Chinese economy "silk road" on the strategic positioning highly fit,based on the bilateral trade demand,to realize the complementary development,economic and trade cooperation between China and the Eurasian economic union is likely to be towards a new step.Therefore,this paper simulates and analyzes the economic effects of establishing FTA between China and THE Eurasian Economic Union through empirical methods.This article through to China and the Eurasian economic union economic and trade cooperation on the basis of analysis of the status quo,analysis of the feasibility of bilateral FTA,China and the Eurasian economic union trade potentiality,and by applying GTAP model to simulate the bilateral FTA,with each part of the gross domestic product,social welfare,the terms of trade,output changes to illustrate the effects of bilateral and other countries and regions of the world.Firstly analyzes the economic and trade status quo between China and eeu from three perspectives: the scale of bilateral economic and trade cooperation,the structure of economic and trade cooperation,and the fields of economic and trade cooperation.In terms of trade mode,the traditional trade in goods,service and small amount of border trade has also been transformed into a wider range,more levels,more openness and diversification.Secondly,the expounds the feasibility of establishing FTA between China and Eurasian economic union from four aspects: geographical basis,political basis,economic basis and policy basis of economic and trade cooperation.In terms of geographical factors,the border between China and the Eurasian economic union is long,which provides a favorable natural condition for the economic and trade cooperation between China and the Eurasian economic union.In terms of political foundation,the Eurasian economic union has a deep political foundation with China,which has maintained close ties with the former Soviet union countries after the collapse of the Soviet union.In terms of economic basis,China has an important trade position among the countries of the Eurasian economic union.At present,China is the largest trading partner of Russia and Kyrgyzstan,the second largest trading partner of Armenia and Kazakhstan,and the third largest trading partner of Belarus.With the deepening of economic exchanges,strengthening the construction of free trade area is the objective need of bilateral improvement of terms of trade and promotion of bilateral development.Through the simulation and analysis of the GTAP model,this paper concludes that the establishment of the FTA between China and Eurasian economic union can significantly improve the economic and social welfare effects of both sides,among which the economic effect of the Eurasian economic union is more significant than that of China.With the establishment of FTA between China and Eurasian economic union,the optimization of bilateral industrial structure will be accelerated and the allocation of resources will be more reasonable.In terms of the impact of trade barriers,in terms of economic welfare,China's welfare is mainly affected by tariff barriers.However,the Eurasian economic union is more vulnerable to the impact of technical trade,that is,the reduction of technical trade barriers,the Eurasian economic union gains more significantly.In this paper,the theories of geoeconomics and regional economic cooperation are incorporated into the analysis method,which provides a new way of thinking for the systematic analysis of the establishment of bilateral free trade area,and also enriches the application of the theoretical system of regional economic integration to a certain extent.Through the construction of GTAP model,the paper analyzes the economic effect of establishing FTA of China-Eurasian economic union,and provides some reference for the country to implement reasonable policies.