Business Cycle Synchronization Between China And RCEP Member States And Its Transmission Mechanism

As of March 18,2022,the Regional Comprehensive Economic Partnership(RCEP)has entered into force for seven ASEAN countries including Brunei,Cambodia,Laos,Singapore,Thailand,Vietnam and Malaysia,and five non-ASEAN countries including China,Japan,New Zealand,Australia and South Korea.RCEP covers a population of about 2.27 billion,accounting for about 33% of global GDP and 30% of global exports.RCEP is currently the largest free trade area in the world,with the largest membership structure,the largest economic and trade scale,and the most promising free trade agreement.The official implementation of RCEP will make trade and investment in the region more convenient as more than 90% of the commodities trade in the region will eventually achieve zero tariff.This will bring a whole new opportunity for the deeper development of the region and a strong force for the development of the global economy,as well as for China’s economic development.The interaction between countries in the economic field becomes closer.One country can transmit the economic cycle fluctuations of that country to other countries through various ways such as trade,finance,and industrial structure differences,thus leading to a certain degree of mutual influence and resonance of economic cycle fluctuations.The linkage between countries will be more obvious,and at the same time,their own economic development will be influenced by external factors,and this linkage will lead to the gradual strengthening of the economic cycle linkage between countries.the RCEP member countries have a more important position in the world economy,so in the open world economic situation,the RCEP economic cycle linkage and its transmission mechanism becomes a very worthy of discussion.This provides a basis for China to avoid the impact of external factors through macro-control instruments under the trend of gradually increasing the degree of economic cycle linkage of RCEP member countries.This paper mainly studies the linkage of economic cycles of RCEP member countries and the transmission mechanism of the factors influencing the linkage of economic cycles,so as to encourage RCEP member countries to seize the strategic opportunity of the Regional Comprehensive Economic Partnership Agreement and avoid the impact of the global economic crisis.Starting from the transmission mechanism of economic cycles,this paper measures and comparatively analyzes the overall degree of economic cycle linkages of RCEP member countries using the consistency index,and analyzes heterogeneity in four aspects: economic development stage,trade intensity,financial integration degree,and industrial structure differences.Along the economic cycle transmission paths of trade,finance and industrial structure differences,the 3SLS method is applied to analyze the degree of role of these transmission factors on the economic cycle linkages,and the differences in the transmission factors and the strength of the impact level of the overall economic cycle linkages of the RCEP member countries are analyzed comparatively and the corresponding policy recommendations are finally proposed.Based on these studies,the main conclusions of this paper are as follows.First,the analysis from the perspective of RCEP member countries finds that there is a positive linkage in RCEP member countries in general,and the economic cycles are in the same stage more than half of the time in general.Since 1990,the overall economic cycle linkage of RCEP countries has gradually increased,and the path of economic cycle linkage through trade and financial integration of RCEP countries is smooth,and the effect is relatively significant.Second,the analysis from the perspective of China and RCEP member countries reveals that there is a positive economic cycle linkage between China and RCEP countries in general,but the degree of positive linkage between China and RCEP countries has slightly decreased in the past 30 years.The degree of economic cycle linkage between China and developed countries is higher than that between China and developing countries,and the increased financial integration between China and RCEP member countries has directly contributed to the increase of economic cycle linkage over the past 30 years.China and RCEP countries can directly and negatively affect the international economic cycle linkages of China’s RCEP countries through industrial structure differences.Finally,on the basis of the empirical findings,this paper addresses the research results on the characteristics of economic cycle linkages and the transmission mechanisms of influencing factors in RCEP member countries,and gives suggestions on the countries with high degree of economic cycle linkages that RCEP member countries should focus on,as well as how to avoid risks in economic development for the main transmission channels of economic cycle fluctuations by establishing an early warning mechanism to prevent external shocks,establishing domestic and foreign economic The study also gives suggestions on how to avoid risks in economic development by establishing an early warning mechanism to prevent external shocks,establishing a mechanism for domestic and foreign economic equilibrium,expanding diversified trade targets,adjusting industrial structure and export structure,and strengthening international policy coordination to jointly resist the impact of world economic fluctuations.