Research On The Impact Of FTA On The Quality Of Chinese Export Products

Since the first free trade agreement signed with Chile,China has established free trade relation with twenty-one countries including the latest Regional Comprehensive Economic Partnership Agreement(RECP)signed in November 2020.Chinese government has continuously promoted the process of global free trade positively to realizing the sustainable expansion of trade scale.Under the provisions of multilateral trade policies,traditional tariff and non-tariff barriers have been continuously broken,and the standard of free trade relationship between China with other countries has dramatically improved.However,with chinese economic transformation and the deepening of international division of labor with other countries,labor-intensive and capital-intensive products has been losing competitive edge in international market.For sake of breaking the current development bottleneck,it is essential to improve the quality of Chinese products and upgrade the position in the international production value chain.In fact,Chinese government has been committing to improving the quality of export products to change the financial situation before.This dissertation focuses on the quality of export products from the perspective of the free trade agreements.Whether the implementation of free trade agreements between China and other countries has significant promotion effect on the quality of Chinese export products and its influence mechanism.The free trade agreement strategy plays significant role in the process of opening up.The statistics analysis in this dissertation are from CEPII-BACI public database,including the date of Chinese export products to one hundred eighty countries in the world form 2002 to 2017.The classification of export products used the HS2002 sixdigit code.Refer to National Economic Industry Classification"(GB/T4754-2002),all the statistic of export products in manufacturing industry in HS2002 was matched the national standard.In terms of survey of Chinese export product quality,this dissertation used the constant elasticity of substitution method(CES)to calculate Chinese export quality of 4139 types to 196 economies from 2002 to 2017 including 4105760 samples.By matching the HS2002 with Chinese industry classification standard,the analysis of the effect of FTA to the quality of Chinese export products was divided into different dimensions including manufacture industry level and the national level.Subsequently,according to Chinese implementation of free trade agreement policy,the multi-period double difference method(DID)was used to establish the model to study the impact of entry into force of free trade agreement on the quality of exports products.The 50 countries selected in the paper include 19 countries that have signed free trade agreements with China as the treatment group,and 161 countries that have not signed free trade agreements with China(including countries that are negotiating free trade agreements with China and those that are studying entry 11 countries at the negotiation stage)served as the control group.The parallel test and dynamic change test verify the trade creation effect of free trade signing on the quality of Chinese export products.Research shows that: the quality of Chinese export products has reaches an increasing trend year by year from 2002 to 2017.From the perspective of industry analysis: Chinese technology-intensive industries have higher quality,but products of capital-intensive industries were concentrated in low-tech segments such as tobacco manufacturing.Meanwhile,by means of dynamic change test,this dissertation found the implementation of free trade agreements has a significant time lag effect on the improvement of the quality of export products,which is manifested in the fourth year after the implementation of the policy.From the mechanism of effect: higher the economic level of the trading partner countries,greater the trade creation effect of implementation of Chinese free trade agreement on the improvement of its product quality.The product classification have heterogeneity in the impact of Chinese free trade agreement on the quality of export products.Such as export of Chinese product from capital-intensive and technology-intensive industries can have the positive impact of free trade agreements on Chinese product quality.The last but not least,it is understood that China’s export products mainly achieve trade creation through export product scale effects and export product prices,reducing costs and increasing profits.