Macro Economic And Industrial Effects Analysis Of Tariff Reduction To ASEAN In China

China and ASEAN signed the "Framework Agreement on Comprehensive Economic Cooperation between China and ASEAN" and established the basic framework of China-ASEAN free trade area, on 4th, November, 2002. According to the plan, both China and the six original members of ASEAN will carry out zero tariff rate to 8 species of agricultural goods in 2006, the free trade area between China and the six original members of ASEAN will come true in 2010, and the free trade area between China and the four new members of ASEAN will come true in 2018. How to evaluate the economic effect of tariff reduction to ASEAN, especially toward the six original members of ASEAN, under the China-ASEAN free trade plan, will benefit us to make decisions about the macro economy and industry economy.This paper, which related the resident consumption that was treated as residential variable in the original Chingem model, to the resident income on the basis of the Chingem model, improved the long-term macro closure, so that the economy growth will affect resident consumption, making the results more reliable. It analyzes the short-term economic effect of carrying out zero tariff rate to 8 species of agricultural goods and the long-term economic effects of complete zero tariff rate, toward the six original members of ASEAN, on the basis of Chingem model. The results concentrate on the macro variables and the prospects of industries. The macro side analyzes the changing trend and its reason of GDP, trade, employment and price level. The industrial side analyzes the changing trend and its reason of industrial output, employment and price level in manufacture, service and agriculture.The research shows that in the short-term when cutting tariff toward the six original members of ASEAN, China's economy will grow, the import and export volume will increase, the trade surplus will expand, and the output and export of the manufacture sectors will increase. In long term, China's economy will increase harmoniously, the structure of import and export good will be upgraded, service industry will benefit while some agriculture and manufacture industries will damage, and the employment of manufacture industry will fall while the employment of service and agriculture industry will rise.