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The Impact of Free Trade Agreements on Business Activity: A Survey of Firms in the People's Republic of China

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  • Yunling Zhang

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    Abstract

    The People’s Republic of China (PRC) has emerged as a major player in the global economy and considers free trade agreements (FTAs) an important part of its global trading strategy. The PRC’s export industries are embedded in existing regional and global production networks and are reliant on foreign direct investment flows and external supplies of material and intermediate goods. Immediately after its accession to the World Trade Organization in December 2001, the PRC adopted a regional approach to trade and began negotiating and implementing FTAs. This paper analyzes the results of a survey undertaken across 232 Chinese firms with regard to FTA-related issues such as utilization, perceived costs and benefits, perceptions of multiple rules of origin, and policy and institutional support mechanisms. It was found that, of the firms surveyed, 45% were using FTAs to some extent. While this utilization rate appears relatively high, and reflects the assertive stance of Chinese firms when it comes to exploring market opportunities, the actual coverage of export value by FTAs is variable. In general, Chinese firms view FTAs as a way to increase their access to partner markets. [ADBI Working Paper 251]

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    Bibliographic Info

    Paper provided by eSocialSciences in its series Working Papers with number id:3015.

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    Date of creation: Oct 2010
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    Handle: RePEc:ess:wpaper:id:3015

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    Keywords: Republic; China; global trading strategy; export industries; support mechanisms; markets;

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    1. Kawai, Masahiro & Wignaraja, Ganeshan, 2008. "Regionalism as an Engine of Multilateralism: A Case for a Single East Asian FTA," Working Papers on Regional Economic Integration 14, Asian Development Bank.
    2. Dayaratna, Banda O.G. & Whalley, John, 2005. "Beyond Goods and Services: Competition Policy, Investment, Mutual Recognition, Movement of Persons, and Broader Cooperation Provisions of Recent FTAs Involving ASEAN Countries," Working Papers 24153, Canadian Agricultural Trade Policy Research Network.
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