China’s accession to the WTO has profound implications for East and Southeast Asian trade relations, and many of the more established regional agreements (ASEAN, etc.) are being re-examined in this light and even challenged to include China directly. From another perspective, the commitment of such a prominent Asian economy to WTO standards for globalization calls into question the basic tenets of regionalism, even as an intermediate step to full multilateralism.
In this project, we examine these issues empirically, using a multi-country dynamic CGE model to appraise a variety of East Asian trade regimes as they might evolve over the next fifteen years. Our results two salient features. First, we predict the emergence of a Trade Triangle that will leverage regional exports via China’s expanding exports and induced domestic growth. Second, we find that for China’s neighbors, the greatest national, regional, and global, gains would accrue if all countries in the region followed China’s example and, more generally, pursued globalism through more comprehensive regionalism.