The Study On The Potential Impact Of TPP On China’s Export Trade

Since the US announced its determination of joining TPP in November 2011, people around the world began to pay more attention to TPP. TPP expanded rapidly due to the active promotion of the US. TPP contains 12 member countries so far, namely Singapore, Chile, Brunei, New Zealand, the US, Peru, Australia, Vietnam, Malaysia, Mexico, Canada and Japan. However, as a major economy in Asia-Pacific, China hasn’t accepted an invitation or expressed its intention to join TPP, so China is excluded from TPP at present. As we know, China is a big trade country and export plays an important role in national economy, while most TPP member countries are China’s very important export partners. Thus, if TPP comes into effect, it would impact on non-member China’s export. TPP negotiation is closely related to China although China is outside TPP. Therefore, it’s meaningful to study TPP’s potential impact on China’s export.The research method of this paper is a combination of theoretical analysis and empirical analysis. On one hand, this paper analyzes theoretically based on Customs Union Theory, on the other hand, this paper analyzes empirically by the use of GTAP model.This paper is divided into six chapters. The first chapter describes the background and significance of the study, the relevant literature reviews, the research methods and overall framework and innovation and inadequacy of the paper. The second chapter analyzes the current situation of China’s export to TPP member countries from the four aspects of total export volume, export commodity composition, trade combination degree and RRCA index. The third chapter is the theoretical part, analyzing TPP’s potential impact on China’s export from the perspective of static and dynamic mechanisms. The forth part is the empirical part. Firstly, describing the fundamental principles and data processing of GTAP model. Secondly, analyzing GTAP model results in order to estimate TPP’s impact degree on China’s total export volume, categories export volume, export volume to TPP member countries and export commodity composition. At last, explaining the results of empirical analysis. The fifth chapter proposes the appropriate policy recommendations for China from the domestic and international perspectives. The sixth chapter summarizes the paper’s conclusions systematically.Through theoretical analysis, the following conclusions are achieved:for TPP member countries, it will bring many positive effects after TPP becomes effective, such as static trade creation effect, dynamic investment incentive, competition effect and scale economies effect. For non-member China, it will bring more negative influence. In static effect, it will cause trade diversion; in dynamic effect, it will cause direct negative influence and make China face more direct pressure. However, in order to reduce the negative influence, China has to carry out technological innovation, optimize and upgrade the industrial structure to enhance product competitive advantage, which is an indirect positive effect.Through empirical analysis, the following conclusions are achieved:After TPP becomes effective, firstly, China’s total export volume will decrease while TPP member counries’ total export volumes will increase; secondly, most categories export volumes of China will decrease and only mechanical and electrical products and other industrial products remain to increase, while TPP member counries have different changes in different categories; thirdly, China’s export volume to TPP member counries will decrease while to other countries in world will increase; fourthly, the changes of China’s export commodity composition are similar to the changes of categories export volumes.Some suggestions are here proposed:In domestic perspective, thirdly, transform the economic growth mode and expand domestic demand; firstly, consolidate the export of competitive advantage products and upgrade industries; secondly, support competitive disadvantage industries and speed up industrial structure adjustment; fourthly, speed up domestic related reform and draw close to TPP rules. In international perspective, firstly, deepen economic and trade cooperation with America; secondly, strengthen CAFTA; thirdly, promote the development of RCEP.This paper makes a significant study on TPP’s potential impact on China’s export, laying a good foundation for future research.