Analysis on Relevance of Economic Fluctuations between China and ASEAN
|School||Shanxi University of Finance|
|Keywords||Sino-ASEAN FTA Economic Fluctuation Relevance International Transmission Mechanism|
With the speedup of economic globalization, the mutual transmission mechanism among world economies is becoming increasingly faster that the economic fluctuations of a country can be passed to other countries in a very short period of time. Thus, new regional even global economic cyclic fluctuations are formed. In an open economy, there are three transmission channels for economic fluctuations: international trade, foreign direct investment and international capital markets. With the establishment of Sino-ASEAN FTA, the trade between the two sides will be freer, the investment will be more convenient, and the economic ties will be tighter. The economic fluctuation of a country in the region may affect the economy of other countries easily through trade, direct investment and capital market changes, which can lead to a certain degree of convergence of economic fluctuations in the member states.As the level of China’s current capital market liberalization is low, and the relationship with the capital market of ASEAN is not so close. Therefore, on the basis of the normative analysis, this paper makes an empirical analysis of Sino-ASEAN economic fluctuations in terms of international trade and direct investment. The outcome shows that: the relationship of economic fluctuations between China and ASEAN experienced a synchronization process, from a small to big and finally to a complete synchronization. In terms of trade, the economic cooperation between China and ASEAN is a win-win deal, the greater the volume of bilateral trade is,the faster the economic growth rates. By comparison, the effect transmitted on economic growth of ASEAN is more evident. From the perspective of direct investment, the role of ASEAN’s direct investment plays in the bilateral economic fluctuations is not significant.To avoid the negative impact on China’s economy which may come from economic fluctuations of ASEAN, it is better not only to continue to strengthen and deepen the bilateral cooperation in the fields of trade, direct investment, finance, politics, culture, technology and energy, but also to establish and improve risk warning and prevention mechanisms. The bilateral economic operations should be regulated, and the overall ability to withstand external shocks should be improved, reducing the frequency of bilateral economic fluctuations and the degree of mutual influences.The two economies, China and ASEAN, play a vital role not only in East Asia but also in the whole world. The economic ties between the two are tight and the economic complementarities are high, so it is an objective reality that the two economies are influenced by each other through the opening channels. It can be expected that, as the establishment and development of Sino-ASEAN FTA, the bilateral economic ties will inevitably become tighter, and the synchronization features of economic fluctuations between the two sides will also become more evident.