A Quantitative Relationship Analysis of Industry Shifts and Trade Restructuring in ASEAN Based on Multiregional Computable General Equilibrium Models

Luyuan Xu,Wei Wang

doi:10.1155/2021/6642798

Abstract

This paper provides an in-depth study and analysis of the quantitative relationship between ASEAN industry transfer and nuclear trade restructuring through the multiregional computable general equilibrium (CGE) model and categorizes the ten major projects and 57 subprojects covered by the ASEAN Information Port project investment into construction, information technology, and telecommunications, according to the key directions of investment. We design and simulate the changes in production activities, trade activities, and the balance of payments behaviour of the national economy affected by the project’s investment under 10 types of investment amount scenarios and prepare the corresponding social accounting matrix (SAM). Increased trade openness increases external risks and instability of the economy and fiscal revenues. At the same time, it creates other potential problems for the country such as environmental pollution and leading to unfair competition. Under free trade conditions, some manufacturers may choose to produce inputs that are not environmentally friendly to reduce costs, thereby harming the environment. For infant industries, if the government does not provide them with short-term protection or supportive policies, these new or developing infant industries may not have strong international competitiveness and may be vulnerable to the attacks of mature industries in the world. Therefore, based on the study of the influence of tax policy on trade openness, this paper examines the impact of changes in trade openness on a country’s economic environment and takes tax revenue as an example to conduct an empirical analysis and improve the factors that need to be considered when adjusting tax policy.

Highlights

Most of the ASEAN countries are coastal countries, ASEAN is at the heart of maritime transportation, and the sea is an important link in building an ASEAN community of interests [1]
The national economy is divided into four major sectors based on statistical yearbooks and input-output tables, namely, primary, secondary, tertiary industries, and CAIH projects. e empirical analysis is based on the SAM table, a social accounting matrix of the CAIH-computable general equilibrium (CGE) model, which examines the impact of investment project “shocks” on the regional economy as a whole, and the SAM table contains the commodity accounts, activity accounts, factor accounts, resident accounts, enterprise accounts, government accounts, and other social accounts
Savings and investment accounts, and foreign accounts are the Complexity indicators examined in the model simulation, that is, the explanatory variables. e CAIH-CGE model is a complex solution to describe the economic system with multiple systems of equations to find the optimal solution, which includes input-output, linear planning, and nonlinear planning. e General Algebraic Modeming (GAMS) model is a complex solution to describe the economic system with multiple systems of equations to find the optimal solution

Summary

Introduction

Most of the ASEAN countries are coastal countries, ASEAN is at the heart of maritime transportation, and the sea is an important link in building an ASEAN community of interests [1]. With the advancement of construction, maritime connectivity is an important way to strengthen the development of regional economic and trade cooperation and to achieve the goal of mutual benefit and a solution where everyone benefits for both sides [2]. E goal of developing countries is to achieve trade liberalization by reducing tariffs and increasing trade openness [6]. In less-developed or developing countries, the revenue constraint on trade openness may affect the promotion of trade liberalization policies [9]. Tax policies that expand trade openness should be studied in conjunction with an analysis of government expenditures to maintain a balanced government budget [10]. Tax policies that expand trade openness should be studied in conjunction with an analysis of government expenditures to maintain a balanced government budget [10]. e domestic risks associated with trade openness can be adjusted by government spending policies to maximize the benefits of trade openness while minimizing its negative effects [11]. erefore, it is important to study the economic impact of trade openness on tax revenue, import and export trade, and social welfare in conjunction with other economic policy measures when examining tax policies to expand trade openness [12]

Methods

Results

Conclusion