Dissertation > Economic > The world economic profiles,economic history,economic geography > The world economy, international economic relations > International economic relations > International economic cooperation > Economic relations between the region

China and Regional Economic Cooperation of East Asia

Author WangFangHua
Tutor LuoXueZhong
School Xiangtan University
Course International relations
Keywords China Asian Regional economic cooperation Positive externalities Negative externalities
CLC F114.46
Type Master's thesis
Year 2011
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Externality theory as an important concept in economics is to analyze a country’s economic actors within the transactions between the costs. Because development of economic globalization. Especially after joining WTO, China has come into the world economy, China’s participation in the world economy increases the transaction costs and economic risks; participation in regional economic cooperation is an inevitable choice for China.Externalities are the main contents of public economics, is a so-called external actors of the additional revenue or additional losses. The externality can be divided into positive externalities and negative externalities. At present, how to solve the externality problem including three methods: One is the externality problem internalization; The second is Pigou who proposes the compensation mechanism which lets the government intervene, named“Pigou Tax”; The third is Coase proposes“Coarse Theorem”, he believed, the government intervenes not necessarily is most effective, the government should avoid directly carrying on the ruling as far as possible to the externalities, the most important choice should provide externalities the law and the system rule, to clear about the property right, to reduce the transaction cost, to create the condition of the market mechanism normal operation. No matter what kind of solution, to solve the problem of externality should be based on the principle of choosing the most favorable institutional arrangements. This text extends the externality theory to political externality and international externality, to put the externality theory of regional economic cooperation, from the perspective of the externality theory to analyze China’s participation in regional economic cooperation in East Asia bringing the positive externalities and bearing the negative externalities. According to the analysis of externalities, the government will also have externality behavior, that is, outside of politics. A country’s economic growth, social change, political events and government actions against other countries will produce such externalities, externalities beyond the range of countries, it is an international externality. For not existing a world government or a global or regional fair adjustment of the interests of national distribution of economic activities, the international community, international organizations, the externality problem is difficult to solve by“Pigou Tax”, only between the interests of all countries to seek coordination and cooperation. The regional economic cooperation and the existence of the externality, in which interaction in the establishment of cooperation mechanisms is more important.There are inevitable impact of externalities in China’s participation in regional economic cooperation in East Asia, China’s positive externalities has not been actively used, resulting in a waste of resources and the negative externalities by the impact of an increase of invisible China’s participation in the costs of regional economic cooperation in East Asia. As regional economic cooperation and externality interaction problem exists, so the active participation of China in East Asian regional economic co-operation take appropriate measures, through the establishment of regional economic cooperation mechanisms to coordinate the resolution of China’s participation in regional economic cooperation in East Asia, reducing it’s cost and protecting China’s economic security.

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