The Effect Analysis On China's Economy By Tariff Reduction On Electromechanical Products From ASEAN Using Computable General Equilibrium Model

In the end of 2000, the Chinese government and the Association of Southe ast Asian Nations (ASEAN) sign an agreement that the Chinese-ASEAN free tra de area (FTA) were be established in 2010. According to the agreement, in th e process of FTA establishing, China and the ASEAN have to reduce the bilate ral trade customs duty, erases no-customs duty trade barrier, and finally realize the trade liberalization. A direct effect of FTA is the cutting of customs duty, which can stimulate a country's export and indirect influence to the whole macro economy. The electromechanical products are key point of the Chinese-ASEA N bilateral trade. In experience, the cutting of import customs duty of the elect romechanical products from china will stimulate the exportation, and influence t he correlate industries and macro economical trend. However, we can not makesure how big influence of FTA will lead to be and have no idea to give an a ccurate conclusion. The paper attempts to build a Chingem model, which based on the CHINA-ASEAN FTA. Then set an appropriate simulate scene and operat e the model and get a series of result. After that, the paper researches the resu Its from three perspectives: the macro-economic, the industry, and the area. Res earch findings indicate that ASEAN cutting the import tariffs of China's electro mechanical products is good to China's long-term economic growth, the real GD P will grow by 0.067% and 0.131%.will promote the sustained increase in the volume of exports and imports, and will be benefit to the improvement of social welfare. China's electromechanical industry and its upstream industries will de velop in this process, but not conducive to the development of agriculture and t extile industries; It is conducive to the developed provinces and cities, but is lit tle harmful to the agricultural and developing areas.