ASEAN–China Trade Flows: moving forward with ACFTA

Abstract

There are claims that China's influence on ASEAN is direct in that she has encouraged more exports to flow into her huge markets and changed trade flows amongst member countries. Demand and supply are deemed to have therefore become more China-centred. This paper looks at the plausibility of China as a ‘factor’ that influences bilateral intra-ASEAN trade flows through demand (exporting country) and supply (partner country). The key finding of the study is that China's trade association with the region increases intra-ASEAN exports. China is therefore the most practical choice for the ASEAN+1 FTA to initiate deeper trade integration within the region. China, as the ‘core’ country of the ACFTA can provide complementarities in the export performance of ASEAN.