Competition and cooperation on a global scale - regional economic integration theory revision analyzes China - ASEAN Free Trade Area is formed

Abstract: With the growing integration of the global economy and some of the emerging developing countries, all kinds of economic integration organization also ushered in their second spring, but the integration of the past are quite different, this article of China - ASEAN free Trade area for the extrinsic and intrinsic mechanism of formation, the use of traditional integration theory and the theory of regional integration as amended (the new economic geography, the new regionalism theory), respectively, were from China and ASEAN countries both were analyzed, and the conclusion was that although the field of economic integration is the trend, but certainly long-standing competition and cooperation.

Keywords: regional economic integration theory new regional trade protectionism theory of regional integration as amended

First, the preamble

Economics is to teach people how to use their hands to achieve the benefits of limited resources and maximize the effectiveness of a discipline. Research on International Trade of the starting point for this is, its purpose is to make between countries, exchange behavior between regions to achieve the elimination of trade barriers and barriers, can play the greatest degree of various factors of production most reasonable configured to meet the entire global welfare, utility maximization, at this level, the global integration is undoubtedly the best way and best purpose.

Since the global economy is so bright and beautiful, his process will be smooth and smooth, but the fact is that on the contrary, the process of economic globalization, very hard, I want to use 'hard' word to describe is not too much of it. Looking back to the establishment of the GATT and the WTO concerning the establishment of the GATT to eliminate all barriers to several rounds of negotiations, the Doha round of setbacks, the Seattle round of setbacks, not the people to ask why? Why then 'good' process but in reality the process is frustrated? Careful examination of the economic situation in the world today, vigorously promote economic integration is often the so-called economic power, we will call the core countries; these countries on the one hand from time to time in the global economy 'expostulation remonstrance policy', but in fact they are the global economic integration, the greatest resistance, they hinder the integration process. The United States as the representative of the Western countries not only in the world to sell their goods, but also to the world output their rules, which is demonstrated by the current world economic order, these rules subtle majority of developing countries so as to think this is globalization, which is before globalization 'feast' coming to be paid a little 'tip.' Their side trumpeted the benefits of liberalization, require developing countries to open markets to free trade; while on the other hand was in the way of the full integration process, for example, in Europe and other countries in a daze agricultural products, labor-intensive products aspect everywhere restrictions, discriminatory measures and retaliation policy that no matter from which level it is not a manifestation of economic globalization.

Just under globalization has yet to progress in the case, but as the trend of regional integration in general development springing rise. As we learned before, regional integration so far had experienced two waves, one in after World War II, and again after the end of the Cold War, we are here to refer to either the second climax. When in 1957, the predecessor of the European Union, 'European Community' was established, the US definitely did not expect it to develop to include in addition to this basic current Russia the world's second largest economy in the whole of Europe. Successful EU demonstration effect is such that other countries have followed suit, with the EU's current paper transportation development and growth, the US economic supremacy also felt the pressure of competition, which was formally established by the North American Free Trade Canada, Mexico and its composition in 1994 area, in fact, the United States can see the process of regional integration is actually out against the increasingly powerful European Union and Japan. Japan's economy entered the doldrums in the 1990s after after the US-Japan alliance has been largely unable to resist the economic EU's competition, then the establishment of NAFTA, its greater significance is out of balance on the EU economy economic force. One is the EU - the world's most integrated regional organization, is a NAFTA - the world's largest economic regional integration organizations, for each other, which means competition between them is particularly strong.

In developed countries, the competition of regional integration organizations, we can see the important place the entire Asia-Pacific region geographically, from the world map we can clearly see that the Asia-Pacific region in the heart of the European Union and North American Free Trade Area has a special geographical features. With the rapid situation 20 1960s and 1970s in East Asia's economic takeoff, the first rise of the Asian Tigers, then it is with China's reform and opening up, the whole world its attention on East Asia, competing in the pre-existing , the entire East Asia have become the focus of the world economic game. This conclusion is the most powerful argument is --APEC, APEC is not really set up a regional integration organization, said that the United States to a greater extent rely on the EU's balance of East Asian countries only a tool only, it is at best just a loose 've no substantive effect. Correspondence, the ASEM summit is also for this purpose.

30 years of reform and opening up, China's economic development every step of the walk is so difficult, only today for the world to see great achievements. However, because of the special nature of (power, economic strength, government effectiveness, etc.), most likely in the future we shall not face the EU and NAFTA strong competition. In this regard, the face of a situation like the US and EU, as well as on a global scale is bound to arise in the future of regional integration organizations of competition, we are bound to make a deal with - no doubt, actively join regional integration organizations is what we It must be done, but the choice of our partners must be considered from many aspects, through our regional integration from the perspective of traditional theory, new economic geography and new theory of regional analysis, China - ASEAN free Trade potential in imperative.

Second, China and the ASEAN Free Trade Area of intrinsic motivation

We know that the traditional regional integration theory is based on the tariff theory Waggerl (1950) and the proposed Free Trade Area theoretically Robinson (Robson.P1984) proposed further analysis of trade creation effect and trade diversion effect of economies of scale obtained that the greater the league, the more conditional customs union to improve their terms of trade, after the alliance, within the Union State welfare will be improved; and later joined Kojima protocol division of labor theory to supplement the conclusion that regional integration five types: preferential trade arrangements, free trade area, customs union, economic union, complete economic and political integration. But when the time came the wheel after the mid-1970s, it was discovered that traditional theory has been unable to explain the current trade and economic integration, for example, can not explain the significant increase in trade in similar products after the establishment of the European Community, which makes people gradually begin the pursuit of new ideas, focusing on economies of scale and product differentiation interaction (Krugman 1979, Dixit & Norman1980) and with imperfect competition and incentive to actively market segmentation to explain this phenomenon (Brander & Krugman 1983) and amended the regional economic integration theory appeared at this time, there are new economic geography (Dixit & Stiglitze 1977) and the new regionalism theory. Here are from China and ASEAN countries to use both as amended inherent mechanism of regional integration theory to analyze the formation of free trade zone

1, from the Chinese point of view

China - ASEAN Free Trade Area, the first is based on the needs of China's own economic development, after joining the WTO, although China's terms of trade than previously has been greatly improved, but our people need a stable market as a backup, before the presence of tariffs, making the export advantage of our products has been greatly restricted here, and also making China ASEAN trade has been able to come up. November 2002, China and ASEAN (ASEAN) signed the 'China - ASEAN Framework Agreement on Comprehensive Economic Cooperation', decided in 2010 to set up China - ASEAN Free Trade Area (CAFTA). And according to the forecast, then, according to trade terms, China - ASEAN Free Zone will be after the EU and NAFTA is the world's third largest market, the world's largest free trade zone, covering about 17 million people, the entire gross national product of about $ 2 trillion. This is not only the establishment of ASEAN since 1967, in terms of regional cooperation in the most significant breakthrough in Asian countries in recent years is one of the most important international economic cooperation activities in China.

For a deeper understanding of China - ASEAN Free Trade Area of the establishment of the reason, has been compared to the more familiar traditional trade theory, we are more focused on non-traditional trade theory from the point of view to look at. First, according to the new theory region, China and the ASEAN free trade area was established for the outside world is a 'signal', this 'signal' indicates that China is willing to take the initiative to break the barriers, open markets, and thus for the world, this ' signal 'for the elimination of so-called' China threat theory 'sentence with a great deal of convincing the outside world that our determination to lock in domestic reforms. Second, you can also bring more countries and China for regional economic cooperation - economic integration appear 'domino effect', this effect refers to a regional integration will lead to the emergence of the next regional integration occur. This is due to the larger trading blocs, and he gave part of the cost of its periphery countries brought about by the higher, and when the multilateral process when the lack of motivation, domino-style regionalization will provide further impetus. Again, this integration can enhance the bargaining power of China's foreign, especially in Europe and the United States, since the region unified tariff and a common external economic policy, so that other countries must cooperate to take on more risk in order to achieve the interests of the entire welfare of the region, access to ownership.

2, from the perspective of ASEAN

From the perspective of traditional trade theory point of view, because China and ASEAN are all developing countries, both industrial structure has similarities to remove trade and tariff barriers after the creation effects are obvious, with the huge Chinese market, the ASEAN countries open this market due to the scale effect brought about by the ASEAN countries have the advantage of industry has brought great impetus to the development, economic management thesis thus promoting trade enhancement. Kojima agreement in accordance with the division of theory, on a competitive basis to achieve industrial restructuring and economies of scale, thereby providing differentiated goods for the diverse needs; in addition there is a large investment creation effect, fully configured in factors of production ( such as labor, capital) and reduce unnecessary costs, it also further attract FDI to lay a more solid foundation. (We do not deny the important role of FDI in the current economic development in the process)

From non-traditional perspective, the establishment of China-ASEAN Free Trade Area, the ASEAN perspective, with this regional powers China, will lead to greater self-insurance effect, such insurance has its effect in the outbreak trade war, when the most obvious. According to Walley (1998)) concluding a CGE model used and then put forward for a trade war can bring welfare losses, loss of large economies will be smaller, and even benefit, while others will suffer serious losses. Join Trade Group to solve this problem is a fundamental solution, but also at increased risk of a trade war, when power is added, the stronger trading blocs.

So why is China? I think there is a certain objective necessity. First, compared with South Korea, Japan, China has a greater potential for economic development, it is known, the Chinese economy gradually started, per capita GDP of just over $ 1,500, has a huge market of 1.3 billion people who can not be ignored, its immeasurable power consumption so that any country in the world today wants a reform and economic development in China to grab a slice, compared with Japan and South Korea, China's economic development is more vitality, and the life cycle theory, China and ASEAN is basically in the same stage of development, the transaction cost is bound to be a lot better than Japan and South Korea. Second, from the culture, the ground point of view, the natural border between China and ASEAN, Southeast Asian countries and Chinese culture culture is the same strain, but the Chinese played an indelible role in the whole course of development of ASEAN, Japan and South Korea even more so compared with affinity especially in China coupled with the performance of the Asian financial crisis, ASEAN countries more Chinese feel more reliable than Japan and South Korea. Again, according to the new theory of regionalism, regional integration among the region span should be as small as possible, and preferably living in such industrial complementarity between countries, the stronger of two different geographical features, while mainland China and ASEAN is just this relationship with the ocean, in this case, the establishment of free trade with China has become ASEAN's own inevitable choice. To chase the vast Chinese market, in order not to fall behind the others.


In short, China - ASEAN Free Trade Area is established trend trend. Faced with the current development trend of world economy has become increasingly complex, we can not fear competition, we can not refuse to cooperate, China must take the initiative to join the wave of regional integration to better preserve our economic interests.


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[2] China - ASEAN Free Trade Area and Asian Dollar Peace Week 2002

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[5] 5th edition of International Economics Paul Krugman Paul R. Krugman People's University Press, November 2002

[6] The World is Flat by Thomas Friedman Hunan Science and Technology Press, 2006

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