China and East Asia: An appraisal of regional economic integration

Three Taiwan-based economists evaluate regional economic integration in East Asia, using trade indicators to analyze the degree of trade concentration among East Asian nations, and employing the gravity model to identify key factors influencing bilateral trade flows among them. China is expected to play a key role in East Asia's economic development, and empirical analysis for the period 1990-2005 indicates that East Asia has already evolved into a trading block, expected to become one of three dominant blocks in the global economy. The study, which highlights the key role played by geographical distance and market size, suggests that the impact of the Association of Southeast Asian Nations (ASEAN) for East Asian trade will remain limited in the future.