China’s Integration with the Global Economy

China’s Integration with the Global Economy

WTO Accession, Foreign Direct Investment and International Trade

Advances in Chinese Economic Studies series

Edited by Chunlai Chen

China’s accession to the World Trade Organization (WTO) in 2001 was widely regarded as a major milestone in the development of the Chinese economy as well as the multilateral trading system. This book provides a remarkable background of information about China’s economy after WTO accession and analyses many important issues concerning China’s economic growth, international trade, transparency of trade policy, regional trade arrangements, foreign direct investment, banking sector liberalization, exchange rate reform, agricultural trade and energy demand.

Chapter 5: What Does a Free Trade Area of the Asia-Pacific Mean to China?

Tingsong Jiang and Warwick McKibbin

Subjects: asian studies, asian economics, economics and finance, asian economics, international economics


Tingsong Jiang and Warwick McKibbin INTRODUCTION A Free Trade Area of the Asia-Pacific region (FTAAP) has been proposed for many years. As early as in the Bogor Declaration of 1994 the APEC (Asia-Pacific Economic Cooperation) economies committed themselves to the achievement of free trade and investment in the Asia-Pacific region through a three-pronged programme of trade and investment liberalization, trade and investment facilitation and economic and technical cooperation (APEC, 1994). The call for achieving an FTAAP was renewed in recent APEC Economic Leaders’ Meetings. In 2006 in Hanoi, it was proposed as a long-term prospect (APEC, 2006), while in Sydney in 2007, the leaders declared, ‘[t]hrough a range of practical and incremental steps, we will examine the options and prospects for a Free Trade Area of the Asia-Pacific’ (APEC, 2007). While supporting such a call for an FTAAP in general, China has been following other countries in paying more attention to regional trade agreements (RTAs) and free trade agreements (FTAs). China has signed six free trade agreements, with the China-New Zealand FTA being the latest one, and is currently negotiating with six partners for such an agreement. In addition, China is conducting joint feasibility studies with four partners, of which the joint feasibility studies for China-India RTA and China-Norway FTA have concluded (see Table 5.1). Among many proposals of regional economic integration, the East Asian Free Trade Area (EAFTA), which is based on the proposed ASEAN-ChinaJapan-Korea FTA (ASEAN+3), is particularly favoured by the Chinese leaders, in contrast to the...

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