Research On The Impact Of Deepening Free Trade Agreements On Financial Opening

At present,the global economy is gradually diverging.since 2001,the Doha Round of negotiations of the World Trade Organization(WTO)has stalled,undermining the multilateral trading system and damaging the process of globalisation.At the same time,the relatively flexible regional free trade agreement(FTA)is increasingly favored by WTO members.Since China’s accession to the WTO in 2001,China has also been actively promoting the negotiation and conclusion of FTAs.The growth in the number of FTAs has been accompanied by an increase in the number of topics covered and a deepening of the content of their provisions.On the other hand,the global financial market has been continuously integrated,more and more countries have implemented financial opening policies,and the trend of world financial integration has continued to develop.China’s active integration into global financial integration is also an important element in further deepening reform and opening up.At the same time,the growth in the number of FTAs has been accompanied by a deepening of the content of their provisions,with some agreements gradually breaking away from traditional trade and beginning to involve liberalization of financial opening.The deepening process of FTA heterogeneity and its relationship with financial opening has become a new phenomenon to be supported by evidence and a new problem to be theoretically explained in international economics.This paper uses FTA deepening as an entry point to study its impact on financial opening.This paper uses the WTO’s Deep Agreement database to construct horizontal and vertical deepening indicators of FTA and matches them with the financial openness dataset to construct a regression sample for the purpose of empirical analysis.The empirical results of this paper show that first both the FTA signing and the level of FTA deepening have a significant facilitating effect on financial opening.Both FTA signings and deep FTA signings have a catalytic effect on financial opening.Second,in terms of the impact of vertical deepening of FTAs,there is a significant promotion effect of vertical deepening of financial opening provisions on financial opening,and the number of financial opening depth provisions and financial opening depth sub-clauses signed in FTAs has a more significant impact on the degree of financial opening.Third,FDI is an important influence mechanism between FTA deepening and financial opening,and the empirical results of this paper show that FDI plays a mediating role in the influence of FTA deepening on financial opening.Forth,China’s FTA deepening and financial opening are both at a low level,lagging behind the average level of emerging economies in East Asia.On the basis of this research conclusion,this paper puts forward targeted strategies for China to build a network of high-standard free trade zones and achieve high-quality financial opening in combination with the current situation of China’s FTA and financial opening.First,increasing the level and depth of FTAs and building a global network of high-standard free trade zones.Second,promoting the vertical deepening of the financial opening provisions of FTAs and improving the cross-border capital trading environment.Third,giving full play to the financial opening driving effect of FDI.Forth,actively corresponding to RCEP to enhance China’s discourse in international financial opening rule-making.