Chinese processing trades and FTA strategies
2010
Kawahara, S., Japan. Ministry of Agriculture, Forestry and Fisheries, Tokyo. Policy Research Inst. | Akashi, K.
This paper analyzes and clarifies the actual circumstances and the structure of Chinese processing trades, and is considering the relation between FTA and processing trades as well as FTA strategies through the measurement of the economic effect of Chinese FTA by the GTAP model. Processing trades which are chiefly practiced by foreign companies, especially by those of 100 % foreign funds, have played a major role to the economic development and the foreign currency acquisition of China. In Chinese processing trades, half-finished goods or parts are mainly imported from Japan and ASEAN, and end-products are exported to the United States. The trade structure of China is based on processing trades, and also is composed of importing minerals and resources from regions where are abundant of those and of exporting leather and fiber goods to the world on the other hand. According to the result of the GTAP model analysis on Chinese FTA, FTA between China and the United States will not be preferable for both sides, although FTA between China and ASEAN in China will bring comparatively sufficient results to both sides. Chinese FTA has been used as means for the achievement of various national purposes or national strategies, while processing trades should be maintained in future because of their large economic merits for China.
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