China's Free Trade Agreements with ASEAN, Japan and Korea: A Comparative Analysis

19 Pages Posted: 2 Aug 2012

See all articles by Gemma Bolotaulo Estrada

Gemma Bolotaulo Estrada

Asian Development Bank - Economic Research

Donghyun Park

Asian Development Bank - Economic Research

Innwon Park

Korea University

Soonchan Park

Kongju National University

Date Written: July‐August 2012

Abstract

The role of China in East Asia's recovery from the recent global financial and economic crisis highlights China's position as an engine of growth for this region. From the viewpoint of China, there are many potential gains from entering into free trade agreements (FTAs) with its neighbors, who collectively form a large and fast‐growing market. In this paper, we qualitatively and quantitatively assess the four main permutations of China's FTAs with East Asian major economies: China–ASEAN, China–Japan, China–Korea and ASEAN+3. We compare the effects of these FTAs on China's output and welfare. Our comparative analysis shows that China will gain from all three bilateral FTAs, while gaining the most from the ASEAN+3. Because forming a region‐wide FTA, such as the ASEAN+3, is expected to be gradual and difficult, China should continue to engage in bilateral FTAs as a medium‐term and alternative strategy. However, in the long term, China should pursue a region‐wide FTA.

Keywords: ASEAN, China, computable general equilibrium model, East Asia, free trade agreement

JEL Classification: F10, F14, F15

Suggested Citation

Estrada, Gemma Bolotaulo and Park, Donghyun and Park, Innwon and Park, Soonchan, China's Free Trade Agreements with ASEAN, Japan and Korea: A Comparative Analysis (July‐August 2012). China & World Economy, Vol. 20, Issue 4, pp. 108-126, 2012, Available at SSRN: https://ssrn.com/abstract=2122237 or http://dx.doi.org/10.1111/j.1749-124X.2012.01298.x

Gemma Bolotaulo Estrada (Contact Author)

Asian Development Bank - Economic Research ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Donghyun Park

Asian Development Bank - Economic Research ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Innwon Park

Korea University ( email )

Soonchan Park

Kongju National University ( email )

527 Yesan
340-800 Choongnam
Korea

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