Analysis Of The Economic Effects Of The China - Asean Free Trade Area

The signing of the《Framework Agreement on Comprehensive Economic Cooperation between China and ASEAN》in November 2002 means the establishment of the China-ASEAN Free Trade Area within ten years. CAFTA has population of 1.9 billion, eleven countries, GDP of 6 trillion and trade volume of 4.5 trillion. It will have far-reaching impact on the healthy development of world economics. As the biggest developing country in the world, CAFTA is the first Free Trade Area that China have established with other countries or area in the world. The establishment of CAFTA will help China and ASEAN develop bilateral relationship more comprehensively, deeply and quickly and promote the status of the two sides in international economics and trade. It's an important decision that it can make true China and ASEAN develop a win-win relationship. It can also bring us two many economic benefits. CAFTA has come into a new stage and a new starting point since 2010. It is necessary to summarize and analyze its economic effect conscientiously and it's significant for the further development of the two sides'economic and trade relationship.This paper has six parts. Linking theory with practice, this paper utilize the theory of economic integration to analyze CAFTA's economic effect from static effect and dynamic effect. This paper concludes that the CAFTA have made some trade and investment enlarging effect and its has large scope of trade creating effect. China and ASEAN are important trading partner while not important investment partner. Directing the problems of further development CAFTA faced, China should enlarge trade with ASEAN through upgrading the industrial structure and developing division and cooperation with ASEAN by agreement. In order to promote Chinese enterprises'FDI in ASEAN, Chinese government should improve the function of service and Chamber of Commerce should serve as a bridge between China and ASEAN. Chinese enterprises should improve market research and put more emphasis on the building of brand and so on.