Research On The Effect Of China-Peru FTA In Trade And Direct Investment

After the 1990 s, countries have taken to establish a free trade area of their way to promote the development of foreign trade, along with the global economic crisis, trade protectionism is gradually on the rise, the world also began to seek new economic and trade development mode my Government is also active in the negotiation of a free trade area with the rest of the world, the hope that more countries to establish free trade zone. April 28, 2009, China and Peru FTA, the parts of the agreement include trade in goods, trade in services, investment and other comprehensive package of free trade agreements, to further promote the development of bilateral economic and trade relations.Article consists of five main parts, the first chapter introduces the background, content, significance, research methods, as well as innovation and shortcomings like this article. The second chapter is literature review related to this article as well as the theoretical basis, including trade diversion effect theory, trade creation effect theory, theory of comparative advantage and factor endowments theory and other theories. In Chapter III of the China- Peru FTA causes are analyzed, starting with China and Peru Trade of the respective status of economic development and the development of bilateral trade Situation analysis and business characteristics before and after the establishment of the FTA on Situation in China and Peru trade analysis, summarized the problems in bilateral cooperation, bilateral investment then analyzed the status quo, summarizes the problems in bilateral investment. Empirical part of Chapter IV of this article, the first part of the business by measuring Competition and complementarity index, analysis of trade effect after the establishment of China-Peru FTA, and then measured the gravity model by China- Peru FTA between the two countries was established to Peru resulting trade effect, it had concluded that both trade creation effect also produced a trade diversion effect. Secondly, the introduction of investment component in the model estimates and found that the model test is not significant, according to China- to give a reasonable explanation of the development phase of Peru FTA. In the fifth chapter summarizes the conclusions of the empirical art, combined with China- trade and direct investment in Peru free trade zone status quo and the existing problems, propose appropriate policy recommendations to promote China- Perfection upgraded Peru FTA.