Empirical Research On The Trade Effect In China-peru FTA

In twenty-first century, In order to promote the development of domestic trade, the establishment of bilateral free trade area has become the mainstream of the world. Especially the economic crisis make The trade protectionism in many countries around the world continue to appear. China government also hopes to creat a free zone with more countries. In April 2009,China and Peru establised the FTA.This is China and Latin American countries signed the first comprehensive package of FTA which covers trade in goods, services,investment and so on. It not only promoted the economic and trade cooperation, but also provides a good reference to sign with other developed countries for China.This paper consists of 5 parts, the first chapter is mainly to introduce the background, significance, research mothods and frame etc. The second chapter mainly introduces the related theory of free trade zone. Including the concept of free trade zone and a bilateral free trade area. These paper also includ the theory comparative advantage, Factor endowment theory, intra-industry trade. The third chapter, using the related theroy to explain the causes of china-peru free trade zone establishment. Then starting from the background of china-peru FTA and with ites proceeding and present situation, the thesis reviews the development of china-peru FTA studies the reason of its establishment and its framework. By analyzing the present trade situation, the thesis observes each country’s economic situation and its trade status on the word, the relationship between china and peru, and the competitive trade effect and the complementary tarde effect of china and peru FTA. The result indicates that the relationship between china and peru is getting closer. Since the establishment of the china and peru FTA in 2009, the total trade between China and Peru have relatively substantially growth, the relationship between china and peru is getting closer. Bilateral trade has both competition also exists complementary.Trade complementarily in Textiles and raw materials, mineral products, food, beverages and tobacco products. and trade competitively in base metals and their products. In the part of empirical research,this article examines the trade effect of trade liberalization on the china and peru through the gravity model. The import and export model shows that,Free trade zone increased exports also increased imports. Both the trade creation effect and trade diversion effect are produced. The results of the model agree with theory. And improve the reliability of this paper studies.According to the results of the study, Combining with the situation of trade China - Peru FTA, The paper finally puts forward five countermeasures to promote the development of Peru and China FTA. Continue to Promote regional liberalization of trade, use the complementary advantages to promote the development of traditional trade, explore new ways of cooperation to expand economic and trade cooperation channel, Handle the secret both competition and complementarity problems. In the last, china enterprise use the policy and resources to increase investment in peru.