Research On The Construction Of The EU Free Trade Area In China

Regional economic integration has become an important way of international cooperation.Almost all of the country are involved in regional economic integration.The free trade zone has become an important means of inter country cooperation and competition.November 2013,China and the EU leaders reached important achievements.China and the EU will explore the feasibility study of FTA construction.Under the background,China and the EU should promote the construction of the free trade area.Firstly,the paper analyzes the realistic foundation and the existing problems of China-EU free trade area construction.We put research on trade in goods,trade structure and investment between China and EU.Secondly,we analyzes the necessity and feasibility of China-EU Free Trade Area construction.Thirdly,we analyzes the economic effects of the China-EU FTA,including static and dynamic effects.Then we use the gravity model to simulate the impact of China-EU Free Trade Area construction.Finally we put forward measures of promoting China-EU free trade area construction.Based on the above analysis,we draw the following conclusions: The trade structure is complementary between China and EU.China-EU Free Trade Area construction has the practical establishment foundation.We use the export similarity index(ESI)to measure products similarity index of China and South Korea and India.There are great competition between China-South Korea and China-India.China-EU's trade will fall by 0.79% if trade between the EU and South Korea increase by 1%.Promoting the construction of China-EU FTA is particularly necessary.Through the use of comparative advantage index,trade index and foreign trade dependence index to analyze the feasibility of China-EU FTA construction.The products between China and EU are complementary.The trade combination between China and EU is higher.EU's import dependence is higher than the export dependence.The construction of China-EU FTA is feasible.By constructing a model of gravity,China and other countries construct FTA and the trade volume will increase 0.76%.Finally,through the empirical equation test,the trade volume between China and the EU is greater under the construction of China-EU FTA.