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Impact of China‐ASEAN Free Trade Area on China's International Agricultural Trade and Its Regional Development

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  • Huanguang Qiu
  • Jun Yang
  • Jikun Huang
  • Ruijian Chen

Abstract

This study aims to examine the impact of the China‐ASEAN Free Trade Area (CAFTA) on China's international agricultural trade and its regional agricultural development, using the Global Trade Analysis Project model and the China Agricultural Decision Support System. Our analysis showed that: (i) CAFTA will improve resource allocation efficiencies for both China and ASEAN and will promote bilateral agricultural trade and, hence, will have positive effects on the economic development of both sides; (ii) CAFTA will accelerate China's export of the agricultural commodities in which it has comparative advantages, such as vegetables, wheat and horticultural products, but at the same time bring about a large increase in imports of commodities such as vegetable oil and sugar; and (iii) CAFTA will have significantly varying impacts on China's regional agricultural development because of large differences in the agricultural production structure in each region. Our results indicate that agriculture in the northern, northeastern and eastern regions of China will benefit from CAFTA, whereas agriculture development in southern China will suffer. Those regional specific impacts are quite different from the effects brought by multilateral free trade treaties, such as those of the WTO, which usually have positive effects on south China but negative impacts on the northern and western parts of China.

Suggested Citation

  • Huanguang Qiu & Jun Yang & Jikun Huang & Ruijian Chen, 2007. "Impact of China‐ASEAN Free Trade Area on China's International Agricultural Trade and Its Regional Development," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 15(5), pages 77-90, September.
    • Handle: RePEc:bla:chinae:v:15:y:2007:i:5:p:77-90
    DOI: 10.1111/j.1749-124X.2007.00083.x
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    References listed on IDEAS

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    1. Chirathivat, Suthiphand, 2002. "ASEAN-China Free Trade Area: background, implications and future development," Journal of Asian Economics, Elsevier, vol. 13(5), pages 671-686.
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    Cited by:

    1. Shanping Yang & Inmaculada Martínez-Zarzoso, 2013. "A Panel Data Analysis of Trade Creation and Trade Diversion Effects: The case of ASEAN-China Free Trade Area (ACFTA)," Ibero America Institute for Econ. Research (IAI) Discussion Papers 224, Ibero-America Institute for Economic Research.
    2. Nie, Fei & Li, Jian & Bi, Xiang & Li, Gucheng, 2022. "Agricultural trade liberalization and domestic fertilizer use: Evidence from China-ASEAN free trade agreement," Ecological Economics, Elsevier, vol. 195(C).
    3. Schaak, Henning, 2015. "The Impact of Free Trade Agreements on International Agricultural Trade: A Gravity Application on the Dairy Product Trade and the ASEAN-China-FTA," 55th Annual Conference, Giessen, Germany, September 23-25, 2015 211619, German Association of Agricultural Economists (GEWISOLA).
    4. Kun‐Ming Chen & Meng‐Chia Tsai & Chia‐Ching Lin & Chaw‐hsia Tu, 2009. "Impact of Cross‐Strait Trade Liberalization: A Computable General Equilibrium Analysis," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 17(6), pages 106-122, November.
    5. Yang, Shanping & Martinez-Zarzoso, Inmaculada, 2014. "A panel data analysis of trade creation and trade diversion effects: The case of ASEAN–China Free Trade Area," China Economic Review, Elsevier, vol. 29(C), pages 138-151.
    6. Ariyasajjakorn, Danupon & Gander, James P. & Ratanakomut, Somchai & Reynolds, Stephen E., 2009. "ASEAN FTA, distribution of income, and globalization," Journal of Asian Economics, Elsevier, vol. 20(3), pages 327-335, May.

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