What Is Economic Integration?

Economic integration is the economic union between nations. Economic integration is not only a phenomenon unique to the world economy, but also a phenomenon unique to the contemporary world economy. It reflects an important feature of the contemporary world economy. In a nutshell, economic integration has the following characteristics; first, it refers to the economic union of two or more countries; second, economic integration requires the state's joint adjustment of the economy; third, economic integration There are different degrees and different scopes. Fourth, economic integration may continue to develop on the basis of the existing, so it is a process. Different levels of integration are only a stage in the entire integration process; Fifth, economic integration The economic development will produce favorable results for member countries and new economic mechanisms. From the perspective of economic integration, there may be trade integration, currency integration, economic policy integration, and economic planning integration. According to the degree and level of development, economic integration can be divided into four types: free trade zones, customs unions, common markets, and economic unions. Generally speaking, economic integration can only be achieved between the same types of countries, and similar economic mechanisms and economic systems are the foundation of a new economy. Among countries that practice economic integration, the flow of products and factors of production is the most basic content. This process will have important influences inside and outside the integration organization and two different effects. Therefore, economic integration has become a unique mechanism in the contemporary world economy, and it has had a negligible impact on the world economy. ^[1]

Economic Integration

Depending on the specific conditions and conditions of each participating country and their target requirements, there are preferential tariff zones,

Economic globalization is an objective process of economic development in the world today, and economic integration is a historical stage that must be passed to achieve the goal of economic globalization. For decades, with the advancement of economic integration, many theoretical and practical cases have emerged at the historic moment, which has enlightened us to accelerate the development of China's economy and enhance China's international status in the new situation.

China Process

1. Economic integration has a deep economic foundation.

Economic integration has its inherent rationality in economics. The theory of international economics has proved that free trade based on the two major reasons of comparative advantage and increasing returns to scale can greatly promote the production efficiency of countries and the world's total output. At present, due to the rapid advancement of information technology, the cost of transmitting information used to coordinate and manage production around the world and its processing costs have dropped significantly, and the cost of organizing international division of labor has been drastically reduced. Because of this, countries have a strong incentive to participate in this international division of labor. Moreover, the more countries that participate, the lower the average cost can be. Because their products can face a larger market. Countries adopting a closed-door self-defence policy must only use their own country as the market. The output of various products cannot be very large, so the average cost must be high, and they cannot compete with the countries participating in the international division of labor. At the same time, with the deepening of the international division of labor, the dependence between countries will gradually strengthen, which will force the process of integration to move forward. In addition, countries are increasingly aware that although the world is artificially divided into many political units, from the perspective of ecology, environmental protection, resources, and humanities, the earth is a unified whole. Therefore, countries must work together to achieve sustainable development. Development, sharing limited resources on the earth and preventing further deterioration of the global ecology.

2. China's reform and opening up is actually a process of economic integration.

Since 1978, China has carried out reform and opening up, strengthened its economic strength, and continuously improved its overall national strength. At present, the prototype of the new market economy system has basically appeared, and the "short economy" that has long plagued us has basically disappeared. Reform and opening up for more than 20 years is actually a process of economic integration. First, foreign trade is constantly expanding. On the one hand, the trade volume has increased, and mainland China is now the world's tenth largest foreign trade country. On the other hand, with the expansion of foreign trade countries and regions and the increase in depth, the dependence on foreign trade has become greater and greater. Second, the number of capital flows has been increasing. At present, China is already the second largest capital inflow country in the world, and at the same time, China has also begun to invest appropriately. Third, join the International Economic Organization and participate in international economic coordination. At present, China has joined international economic organizations including the World Bank and the World Trade Organization. At the same time, China has joined the APEC, a quasi-integrated organization, and has continuously participated in the coordination of the world economy and regional economies. Therefore, on the whole, China's reform and opening up itself is also a process of economic integration. It is also because of the continuous advancement of this process that China's and the world's economic ties are constantly closer, forcing the reform and development efforts step by step.

3. The status quo in Asia determines that China should accelerate the process of integration. ^[2]

Looking back on the last century, we found that Asia is like a scattered string of pearls. Although the economic integration of the subregion has been quite high, the pace of economic integration in the entire Asian economy is still relatively slow, and there is a lack of an effective main line to guide them Link up. After 1997, the dangers of isolation in Asia are growing, and the pressure to integrate Asia is also increasing.

Compared with the integration of Europe and the Americas, Asia is undoubtedly behind. Asia has so far no institutionalized regional integration arrangements. For a long time, Asia's cooperation for integration has consisted only of informal leaders' meetings, ministers' meetings, and senior officials' meetings. There has been a lack of effective negotiation mechanisms. Although the Seoul Declaration formally established the purpose and goal of APEC as "interdependence, common interests, adherence to an open multilateral trading system and reduction of regional trade barriers." But in a strict sense, APEC is not yet an economic integration organization. The characteristics of APEC are recognition of diversity, emphasis on flexibility, gradualness, and openness; adherence to mutual respect, equality and mutual benefit, consensus, and autonomy. This aspect has given APEC the advantages of seeking common ground while shelving differences while being flexible and pragmatic, but at the same time it has also brought the disadvantages of an overly clear atmosphere of negotiation, lack of multilateral negotiations and institutional constraints to formulate a multilateral action program. The benefits of integration are directly proportional to the costs that participants pay for them and the risks they take. There is no free lunch in the world if Asia wants to accelerate its integration. It is necessary to enhance the color of the negotiation mechanism and institutional constraints. "Eastern Asian miracles" have emerged in Asia, and the "Chinese miracles" are now being talked about, but regional economic integration has made little progress. There are various subregional plates within Asia, such as the ASEAN plate. The Australian and New Zealand plate, the "Chinese economy" plate, the South Asian plate, and so on. Socio-economic cooperation in the subregion is also becoming more frequent, but there is a clear lack of promoters in Asia. If this situation continues, Asia may still be Churchill half a century ago. Once said, Asia? That's just a geographic concept!

4. The advancement of the integration process will help increase China's international space.

Although the United States also participates in APEC, it has two obvious intentions: one is to deal with the EU through Asia-Pacific integration; the other is to use its pivotal role in APEC to contain China. At the same time, the United States has spared no effort in advancing the integration of the Americas. First, the establishment of NAFTA resolved its leadership in North American integration. In addition, the United States actively promoted economic integration throughout the Americas. The Western Hemisphere Trade Conference announced that January 1, 2014 was set as the deadline for completing the goal of establishing the world's largest free trade zone from Canada to Chile. The integration of the Americas is a very delicate level. There are intricate inheritance relationships between Europe and the United States in terms of race and humanities, while the major economies in the Americas and Asia are simultaneously covered by APEC. Therefore, if the regional economic integration is smooth, it will Pressure to catch up with Europe. And the pressure on demonstrations in Asia. This is very detrimental to China's expansion of its international space.

How to speed up

For now, China needs to deepen its economic integration from both external and internal perspectives.

1. On the external front, through various means, we will accelerate the economic integration of East Asia, mainly China and Japan.

One of the main reasons for the slow development of Asian economic integration is the lack of strong promoters in this region, which makes regional competition and regional integration not synchronized. The core of Germany and France exists in the European Union and the core of the United States and Canada in the Americas, but Asia lacks a "cohesive core" that promotes regionalization.

In terms of economic strength, China and Japan are leading in East Asia. Although the Japanese economy has been struggling for more than a decade and the Japanese national wealth is shrinking rapidly, such shrinkage is mainly caused by the evaporation of real estate and stock market values. For example, in 2000, land assets shrank by 76 trillion yen The stock market value has shrunk by 88 trillion yen, which has not harmed the fundamentals of the Japanese economy. Today, the per capita GDP is still as high as 37,600 US dollars, ranking second in the world. Its manufacturing industry has also emerged a series of industries, such as liquid crystal displays and light-related technology products, which have grown by more than 20% in 2001. It still leads the world. After more than 20 years of reform and opening up, China currently ranks seventh in the world in terms of GDP. In addition, although ASEAN has been established for more than 30 years, the overall strength of the ten members of this integrated organization is relatively weak, and there are great similarities in the industrial structure. Therefore, it now appears that the economic strength of this organization is still Not too strong. In this way, the integration of Asia, especially East Asia, should be centered on China and Japan. However, because some Japanese forces have not completely regretted the history of aggression against Asian countries during World War II, this has left Asian countries very wary of Japan, which is very detrimental to the integration of East Asia. In addition, Japan seems to be becoming a competitor rather than a partner in the Asian regional economy. Looking back at the Asian crisis in 1997, in order to meet the requirements of the Basel Accord, Japan's large banks tried their best to withdraw loans from Asia, especially the "Gentlemen's Agreement" loan. As a result, Asia suddenly faced huge liquidity difficulties. One of the important reasons for avalanche disaster. Since 1997, Japanese loans to Asia have fallen sharply by 80%, while foreign direct investment in Asia has halved. From this perspective, the Japanese economy is not increasingly integrated into the Asian economy, but is lonely outside the Asian economy.

To cultivate the core of China and Japan, we can proceed from two aspects. First, relying on various circles in Japan, urging its government to thoroughly reflect on the issue of aggression and integrate it into the process of East Asian economic integration as soon as possible. But the author estimates that this process will be very slow if there is no other external force. Second, China and other East Asian countries should simultaneously strengthen their own strength and force Japan to follow suit. Specifically, on the one hand, China should strengthen cooperation with ASEAN. The "10 + 3" (ASEAN + China, Japan and South Korea) summit was held in Brunei on November 5, 2001. In response to China s Prime Minister Zhu Rongji s proposal to establish the China-ASEAN Free Trade Area (CAFTA) within ten years, Singapore s Prime Minister Goh Chok Tong agreed with CAFTA, saying that the opportunity to establish a China-ASEAN Free Trade Area is a golden opportunity, we must not miss it Of the ASEAN countries have basically no strong objections to this proposal, which proves that the ASEAN countries have agreed on the complementarity with China's economy. Moreover, ASEAN has begun to seek further political cooperation and regional security cooperation with China. Thailand's Foreign Minister Surajji agreed with and supports CAFTA's proposal, and looked forward to "by strengthening cooperation with China, the drugs produced in the Golden Triangle will no longer flow through China to the world." In contrast, at the same summit, the resolution sponsored by Japan to fully support the United States' condemnation of world terrorism was rejected by ASEAN. On the other hand, China and South Korea should strengthen the process of integration. If the economic integration process between China, ASEAN and South Korea accelerates and the benefits of all parties increase significantly, it will force Japan to join the economic integration of East Asia.

2. Internally, China should promote internal economic integration and continuously strengthen its own economic strength.

To truly become a core member of an economic integration organization, its own economic strength must be stronger than non-core members. At present, the total amount of China is still quite different from that of Japan. From the perspective of per capita economic indicators, not only is it worse than Japan, but it is also inferior to that of the four primary schools in Asia. Therefore, China should continuously strengthen its own strength through internal integration in the process of actively promoting foreign economic integration. Specifically, you can proceed from the following two aspects.

First, actively promote economic integration across the Taiwan Straits

Mainland China, Hong Kong, Macau, and Taiwan are all one country with similar cultures and the same language. Due to historical reasons, there has been no substantial economic integration. Since Hong Kong and Macau have returned to the motherland, many trade barriers have now been reduced. For Taiwan, the two sides of the strait should first "three links" and then gradually realize economic integration on this basis. As the Taiwan issue is more difficult, efforts should be made to expand cross-strait trade and investment through various channels, so that the economic relations between the two sides are continuously strengthened. Based on this, Taiwan's civilian forces are exerting pressure on the Taiwan authorities to promote cross-strait, four-place Economic Integration.

Second, the mainland should achieve economic integration in this region.

At present, the regional disparity in the mainland is relatively large, which is not conducive to the integration of East Asia. Judging from the practice of the European Union, since some member states have more poverty-stricken areas, the share of these countries in the common fiscal budget is relatively large, which has caused dissatisfaction in other member states and is not conducive to the rapid advancement of integration. Therefore, to reduce the regional differences and reduce local protectionism, it is necessary to realize the integration of the mainland itself.

At present, the economic integration of the mainland can be achieved in the following ways: (1) Strengthening the development of the western region. The economic strength of the western region should be improved mainly by means of technology import. (2) Strengthen sub-regional integration in border areas and develop economies in border areas. In order to accelerate the economic integration of the Yangtze River Delta and Pearl River Delta subregions, strengthen the economic development of relatively developed regions, and make more contributions to the increase of the total economic volume.

Strengthen the study of globalization, come up with solutions, and clear theoretical obstacles for the development of economic integration

With the development of economic integration and globalization, its disadvantages have become increasingly apparent. For example, the "Matthew Effect" appears, the poorer the poorer, the richer the richer, and the gap between the rich and the poor is widening. At some of the current worldwide conferences on integration and globalization, there have been many calls against economic integration and globalization. This is a discordant voice in the process of economic integration. Recently, as this noise has increased, the obstacles to integration have also increased. Therefore, how to deal with objections is an issue in the current integration process. At home, although there is no such strong objection, as long as China unswervingly pursues economic integration, it is equally important to think ahead about this issue. The author believes that in order to carry out an in-depth study of this problem and find a solution, we should pay attention to the following two principles.

First, take a dichotomy to find the real crux. At the Genoa conference, one group of demonstrators strictly adhered to the code of conduct and truly opposed the injustice caused by integration and globalization; the other group was completely opposed to integration and globalization and Use violent means to express their desire for wealth. For the former, we should listen to their voices and find a solution to the injustice; for the latter, we should firmly oppose it.

Second, we should seriously study how to deal with the weak in the process of integration. The challenges facing integration and globalization are inequality, including inconsistencies in wealth and asymmetries in political, social, and economic power. However, for the weaker party, whether to use "blood-forming" (combination of technical and financial factors) or "blood transfusion" (direct funding, etc.), the total cost must be estimated, and different effects must be measured for different subjects ^{[2] [2]}