Abstract

The process of Economic Integration accelerates the merge of different countries in order to maximize the benefits and to realize best allocation of resources. January 1 st,2010, China-ASEAN Free Trade Area officially starts and initiates. China-ASEAN Free Trade Area is the third largest economic integration organization around the world and it contains largest number of population. It is constructed by mainly developing countries, including almost 1.9 billion customers, and its aggregate GDP reaches 6 trillion dollars and total trade volume is 4.5 trillion dollars. The construction of China-ASEAN Free Trade Area will foster the regional economic integration development. This is the first FTA for China which plays an important part in the strategy of China's participation in regional economic cooperation. The establishment of China-ASEAN Free Trade Area could accumulate the experience for other FTA negotiations.

2009 global financial crisis leads to the dump of China's export, which shows the weakness of single and concentrated export destination distribution. Moreover, the over reliance on intensive margin of trade growth and unreasonable trade construction make the trade income is vulnerable to fluctuation and business cycle. In addition, solely increasing the trade income by intensive margin—the increase of trading volume and quantity could deteriorate the trade condition. China is a big exporter of commodities, in order to take great advantage in global competition, gain steady increase in trade income and improve trade condition, the measures taken by the regional economic integration are necessary and will be helpful. Since ASEAN is an important trade partner to China, the construction of Free Trade Area could be helpful to realize the diversification of export destination, improving the model of trade growth. How to utilize the opportunity of China-ASEAN Free Trade Area in order to accelerate the change of China's export construction; how to utilize the measures of trade liberalization by the sign of bilateral agreements in order to guarantee the steady increase of China's export income are what we focus in this book.

The book mainly contains six chapters. Chapter 1 is the introduction, which mainly introduces the background of the thesis, the core problems need to be solved and the analysis framework. The innovations and methods are also included in this part. Chapter 2 reviews the literatures and summarizes the relative theory, including the traditional trade creation and trade diversification effects. The review especially focuses on the firm heterogeneity trade model which lays a ground for the later discussion and analysis. Chapter 3 conducts the fact of China-ASEAN Free Trade Area bilateral trade. Change of trade growth, trade construction and trade direction after China-ASEAN Free Trade Area could be detailed described by statistical data. Especially this chapter focuses the discussion of the fact that China's export to ASEAN countries showing the characteristic of two margin—intensive margin and extensive margin. The pattern of trade growth reveals different features among trade partners and throughout the discussion time span. Chapter 4 offers theoretical model supporting the whole study. The heterogeneity firm trade model combines the micro-level differences between exporting firms with macro-level national characteristic. The variable trade cost, fixed trade cost and the index of firm heterogeneity are all taken into consideration for explanation of extensive margin of trade growth. Chapter 5 utilizes the STATA、EVIEWS and ACCESS and panel econometric method to do the empirical test. The empirical study shows the test results are highly unanimous with the judgment and conclusion summarized by the statistics analysis. The study estimates the effect of two margins by different influencing factors individually. Chapter 6 basically makes a comment and evaluates the achievement after the establishment of China-ASEAN Free Trade Area. The author makes a clear judgment of developing pattern of China-ASEAN Free Trade Area and points out the promotion for trade facilitation negotiation could be a key issue for its long-term steady development and improvement. Relating measures should be taken into force in order to foster the bilateral cooperation further.

Key Words: China-ASEAN Free Trade Area; Trade Growth; Intensive Margin; Extensive Margin