The New Political-economy Analysis of China-ASEAN Free Trade Area

Analyzed by the new political economy and its theory of regional economic integration, China-ASEAN Free Trade Area (CAFTA) has the following characteristics: vulnerability in economic foundation, sensitivity of non-economic factors, duality of the effect of nationalism, absence of supremacy and high institutional-change cost, and interdependency and aspiration for cooperative game. Therefore, in order to promote the construction of CAFTA, it is imperative to give full play to the positive role of the government-oriented system, practice industrial cooperation and develop intra-industry trade; governments’ decision should surpass the requirement of interest group and take into consideration economic, political and state strategic goals; in the mean time, with the aim of reducing institutional-change cost, CAFTA can develop step by step, and efforts should be made to expand the scale and level of economic and trade cooperation.