A Partial and Counterfactual General Equilibrium Analysis for Three Different Trade Agreements Signed by China

This study examines how three trade agreements affected China’s economy between 1990 and 2020. Using the gravity model, we investigate the following three free trade agreements: the ASEAN–China Free Trade Agreement, the China–Pakistan Free Trade Agreement, and the China–New Zealand Free Trade Agreement. We also explored (a) the partial effect and (b) the counterfactual general equilibrium consequences of these partnerships. Moreover, this research examines how these nations’ trade, salaries, and welfare have changed. With an average 80% increase in trade between members, the partial equilibrium effect of the China–New Zealand Free Trade Agreement indicates that it has had a large beneficial impact on both parties. In contrast, trade among members of the China–Pakistan Free Trade Agreement and ASEAN–China Free Trade Agreement has increased only moderately. However, the study of counterfactual general equilibrium indicates that the welfare impacts of the agreements are essentially insignificant, particularly in the case of the China–Pakistan Free Trade Agreement.