China-ASEAN Free Trade Area Development Status Quo and Trade Effect Analysis

Abstract

From the starting of CAFTA in 2002, the economic and trade contact between China and ASEAN has become increasingly frequent . Both sides have achieved good development, which actively promoted the development of free trade area. First of all, this paper introduces the current situation of trade of China - ASEAN Free Trade Area, including the general situation of trade of China and ASEAN, the balance trade of China and ASEAN and key trade industry between China and ASEAN. And secondly, this paper analyzes the Trade Creation Effects through the share of Chinese exports to ASEAN in Chinese total export volume, which finds that the proportion of Chinese exports to ASEAN has increased steadily and that generated a certain trade creation effects. And also the paper analyzes the outside trade diversion effect through the share of Chinese imports and exports with ASEAN in China’s total trades , which show s that China has also created a certain extent Trade Diversion Effect. What’s more, this paper selects the data from China, ASEAN countries and China’s important trade partners, and establishes the panel data from 2003 to 2016. It carries on an empirical analysis on China’s trade creation effect by using the econometric model. Finally, this article puts forward some promoting development countermeasures of China-ASEAN free trade area by the obstacles in the developing process of CAFTA at present, according to the study results.