Abstract

Nowadays, Economic Globalization and Regional Economic Integration are the two major trends of global economic development, which are widely and deeply influencing all the aspects of the world economic development. Free Trade Area（hereafter referred to as FTA）, especially bilateral FTA is one of the main methods of current regional economic cooperation.

With over more than thirty years of reform and opening up, the comprehensive national power and international competitiveness of China have been greatly strengthened. With positive attitude to join and advance regional economic cooperation, China has steadily promoted FTA development and achieved substantive progress. At this stage, China is drawing a FTA strategic map globally oriented to build the basic framework of FTA strategy, which is based on the countries around, extending the Silk Road Economic Belt and the 21st -Century Maritime Silk Road, or“the Belt and Road”for short, and eventually to all over the world.

The GCC appearing in China-GCC FTA refers to the Gulf Cooperation Council（GCC）. The direct trading relation between China and GCC has been longstanding, and ever since the 1980s it has been developing with a very fast pace. In July 2004, the General Secretary of GCC and six countries'financial ministers jointly visited China, signed the Cooperation Framework Agreement on Economy, Trade, Investment and Technology, and announced to start FTA negotiation, but unresolved. On September 232013, Chinese Foreign Minister Wang Yi at the United Nations headquarter in New York collectively met Khalid（the foreign minister of Bahrain）, Sabah（the Vice Prime Minister and Foreign Minister of Kuwait as the next rotating presidency of GCC）and Zayani（the General Secretary of Kuwait as the next rotating presidency of GCC）. Wang Yi said, the new session of Chinese government attaches great importance on developing relations with GCC; China would like to work together with GCC to promot the longterm, stable and sustainable development of cooperation relations, and push the early launch of China-GCC FTA negotiation. Later, accelerating the China-GCC FTA negotiation becomes one of the important works of bilateral efforts. On January 172014, China and GCC held the third round of strategic dialogue in Beijing. General Secretary Xi Jinping met the delegation of GCC. Xi Jinping said China is very serious about the bilateral relations with GCC, the China-GCC FTA negotiation has lasted for 10 years, which had finished much basic work. We should speed up the pace of bilateral negotiation for achieving the agreement as soon as possible. The press communique issued after the conference also highlights the importance on the acceleration of the China-GCC FTA negotiation. Although leaders of both sides agreed on speeding up the process of the China-GCC FTA negotiation, but the new round of negotiation has not started yet. Compared with the skyrocketing development of China-GCC economic and trade, the negotiation process seems to be farflung. But with the rapid growth of China-GCC trade value, as well as the success hold of China-Arab Cooperation Forum and China-Arab Economic and Trade Forum（which has been renamed China-Arab Fair）, it is the right time to restart the China-GCC FTA negotiation. The establishment of China-GCC FTA has important significance on both sides. It can not only enhance bilateral trade value, improve bilateral economic and trade level, but also bring a closer communication of bilateral politics, culture, society and other aspects. It is good for China's oil security, consolidating and enhancing our strategic position in the Middle East, avoiding the risk of being marginalized economically and politically, providing our country with wider developing space and helping China play a good leading role in the regional cooperation with other developing countries. Moreover, the establishment of the China-GCC FTA plays an important role in improving the global position of both sides and expanding the voice in global economy. In that context, the establishment of the China-GCC FTA has not only real economic significance, but also very important strategic significance.

On June 52014, the sixth ministerial meeting of China-Arab Cooperation Forum was opened in Beijing. General Secretary Xi Jinping delivered an important speech named Carry Forward the Spirit of the Silk Road, Deepening China-Arab Cooperation and pointed out that carrying forward the spirit of the silk road is leading us to the win-win cooperation; China-Arab are natural partners to cobuild the Belt and Road. The spirit of the abovementioned speech is the new central government's first policy proclamation for the relations between China and Arab countries. It is an important part of our comprehensive foreign policy，which stresses the key areas for China-Arab co-construction of the Belt and Road and further bilateral cooperation, so as to bring new energy for the future development of China-Arab relations. “Accelerate the elimination of the obstacles during the establishment of the China-GCC FTA, prepare for the establishment of China-Arab FTA”is also drawn in the China-Arab Cooperation Forum Action Plan for 2014—2016. We'd expect to speed up the progress of building China-GCC FTA as an important part of the Belt and Road.

China and GCC countries have extensive common interests on economy, politics and regional security. The trend of the establishment of China-GCC FTA is irreversible. Neo-institutional Economics and New Growth Theory think that system is the key factor for economic growth, and the endogenous variable in the new economic growth model. The rapid development of China-GCC relations and the improvement of political and diplomatic relations lay a good foundation on the institutional innovations of bilateral economic and trade relations, the proposal of China-GCC FTA concept is based onthe common strategic interests. At present, this system innovation still stays at the level of conception, and to put it into reality needs to eliminate economic, political, historical and many other constraints. However, building China-GCC FTA is of important strategic significance, so it's necessary to comprehensively study the related issues of the China-GCC FTA establishment.

The significance of this book is to analyze how to make full use of China-GCC economic complementarities and the solid political foundations under the situation of the rapid development of the economic trade relations between China and GCC, to discuss the feasibility, modes, expected effects, obstacles and impetus strategy of the China-GCC FTA establishment, so as to realize the strategic upgrading of China-GCC economic trade relations, offering some reference to facilitate China-GCC FTA establishment. From another perspective, the economy integrated cooperation between developed countries（such as European Union）, between developed countries and developing countries are relatively successful, but the process between developing countries is comparatively slow. Therefore, the extended study of this book for regional economic cooperation between developing countries is also of theoretical significance, which is beneficial to promote the related study of regional economic integration.

The book includes eight chapters.

The first chapter is introduction. It systematically introduces research background and significances, basic research content, research idea and methods, the focuses and difficulties and expected innovation, deficiencies, and the related concepts are also defined.

Chapter two includes theoretical basis and literature review. In the theory part, systematically combs Classical Trade Theory, Modern Trade Theory（includes: New Trade Theory, Strategic Trade Policy, New-new Trade Theory）, the Regional Economic Integration related theory, and the FTA revenue related theory. In the review part, collects and analyzes the existing literature about the study of regional economic integration, the study of related FTA, the study of China's establishment of FTA and the study of China-GCC economic and trade relations development and the establishment of China-GCC FTA. The book suggests that as the China-GCC FTA establishment is scheduled today, the research status and limitations of domestic and foreign literatures in this field, on one hand, constrain the support and guidance of the practice of the China-GCC FTA establishment; on the other hand, it has clearly demonstrated the direction for the research of this book, Which means that subject has theoretical and practical values, and is also an urgent subject in the frontier research area.

Chapter three describes the negotiation process of China-GCC FTA and the international competition. Firstly, this chapter introduces the development process of global bilateral FTA. Secondly, this chapter analyzes the FTA participate process, present status and strategic intention of China and GCC countries separately, and also explores the realistic thinking of China-GCC FTA object selection, shows that our country regards FTA strategy as a breakthrough point, seeks mutual collaboration, gradually builds up globally around-based high standard FTA network, while the GCC FTA object selection considers more about the national security and economic trade development, pays more attention to the balanced development of the different economic and political powers. With the gradually collapsed negotiation between European Union and GCC, the EU countries still discriminate GCC countries in some degree. In recent years, America's Middle East Policy boosts the regional war instead of stabling, and all of these are good for the China-GCC FTA negotiation. Thirdly, this chapter analyzes the feasibility of establishing China-GCC FTA based on the H&S structural theory. Fourthly, this chapter analyzes the background of China-GCC FTA establishment and negotiation process, concludes that the negotiation will step into a fast traffic lane. But during this process, there will still face strong competition from developed countries and emerging countries such as India. Therefore, the last part of this chapter specially analyzes the economic trade relations between GCC and its main trading partners such as America, EU, India and Japan, as well as FTA negotiation, suggests it is very important for accelerating the process of China-GCC FTA negotiation.

Chapter four is the development of China and GCC bilateral economic trade relations. On one hand, this chapter systematically analyzes the present situation of China-GCC economic trade development, and focus on the situation of goods trade, services trade, and foreign direct investment and so on. On the other hand, this chapter analyze the economic foundation of China-GCC FTA establishment based on the analysis of bilateral tariffs, goods trade relationship，service trade relations, investment relationships, energy cooperation and so on.

Chapter five is expected effects analysis for China-GCC FTA establishment. Firstly, the book theoretically analyzes the expected effect analysis for the China-GCC FTA establishment, specially analyzes the China-GCC trade effects formation mechanism, China-GCC FTA static effects and dynamic effects. Secondly, it analyzes China-GCC FTA trade creative effects based on the trade index. Thirdly, it predicts the trade creative effects of the China-GCC trade FTA based on the Trade Gravitation Model. Fourthly, it pre-analyzes the effects of the China-GCC FTA based on the GTAP model. Fifthly, it analyzes the nontraditional gains produced by the establishment of the China-GCC FTA based on the New Regional Theory. Finally, this thesis discusses the the adjustment cost and coordination cost after the establishment of the China-GCC FTA.

Chapter six tries to analyzethe obstacles of the China-GCC FTA establishment. The thesis starts the analysis from the differences of China-GCC bilateral preferred partners, the bilateral differences of economic development level between both sides and the unbalanced character of China-GCC trade structure. Secondly, it analyzes the existing handicaps on politics, including the different bilateral political systems, the lack of core interests, the support in regional affairs and powerful countries'influences. Lastly, the thesis analyzes other handicaps factors, including the shallow foundation of China-GCC cooperation, GCC unsteady surrounding areas, the dilemma of our country's goods trade and labor export. As a whole, the establishment of still China-GCC FTA faces a number of obstacles.

Chapter seven is the strategic thinking of promoting the establishmerit of the China-GCC FTA. Firstly, analyzes the necessity and advantages of building China-GCC FTA. Secondly, it puts forward the principles of China-GCC FTA institutional arrangement that should be followed. Lastly, it offers proposals on how to enhance the establishment of China-GCC FTA.

Chapter eight is the conclusion and prospect. This Chapter systematically summarizes the research of China-GCC FTA and refines the main conclusions, namely, there is a good economic foundation for China-GCC FTA construction. China-GCC FTA can produce expected trade effects, but there are also some handicaps. The establishment of the China-GCC FTA will become an important content of the“One Belt and One Road”strategy.