Abstract
The bilateral trade relations between People’s Republic of China (PRC) and Thailand have considerably increased following the signing of the PRC—ASEAN Free Trade Agreement (CAFTA) on ‘Trade in Goods’ in July 2005, the ‘Trade in Services’ in 2007 and ‘Investment’ in 2009. The aim of this chapter is to explore the micro level comparative advantages between China and Thailand from the perspective of CAFTA. Revealed comparative advantages (RCA) indices have been estimated and tested for exports at SITC-2 digit level. PRC has RCA for 39 of the 60 industries at two-digital SITC in 2010–2013. This finding is useful to promote Regional Comprehensive Economic Partnership (RCEP) which is currently under negotiation.
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- 1.
For details, see Thailand China Economic Information—The Long-Stream Friendship, http://www.thailand-china.com/getdoc/3aab868f-0b9e-4b1d-bcf1-e93bb80ec7b8/The-Long-stream.aspx?lang=en-GB, accessed on September 16, 2014.
- 2.
In 1998, the China–Thailand subcommittee on cooperation in trade, investment and tourism was created to strengthen the cooperation. This committee was terminated in 2001 after the change of governments from Democrats to the Thai Rak Thai Party.
- 3.
In 1967, founder members—Malaysia, Indonesia, Thailand, the Philippines and Singapore—formed the ASEAN-5. By incorporating Brunei, the ASEAN-6 emerged in 1984. The ASEAN-10 countries include new members: Myanmar in 1997, Cambodia in 1999, Laos in 1997 and Vietnam in 1995.
- 4.
Heckscher–Ohlin (H–O) model says that comparative advantage of a country lies on its relative factor scarcity. Balassa (1965) advocates that comparative advantage is revealed by observed trade patterns and reflects through pre-trade relative prices.
- 5.
See Jakarta Post, March 09, 2015, for details (http://www.thejakartapost.com/news/2015/03/09/asia-pacific-strike-deal-year-end.html).
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Liu, Y., Jayanthakumaran, K. (2016). People’s Republic of China (PRC): Thailand Economic Relationship After Signing of Free Trade Agreement in 2005. In: Kim, YC. (eds) Chinese Global Production Networks in ASEAN. Understanding China. Springer, Cham. https://doi.org/10.1007/978-3-319-24232-3_5
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