Analysis On The Development And The Factors In Bilateral Trade Between China And ASEAN

90s in 20 centuries is the ages which trade liberalization and regional economic integration develop rapidly. Building up the China-ASEAN free trade area is not only the objective request to mix closely with the international economy after the rapid growth of Chinese economy, but also the necessary choice to fulfill all the promises and to develop the bilateral relation after China's accession to WTO. The paper tries to make researches into the trade development and factors on bilateral trade using theoretical and practical analysis, which has guiding significance for us to make the correct foreign trade policy .Based on the research of the bilateral trade status between China and ASEAN, this paper analyzes the competitive and complementary relations of the bilateral trade utilizing the revealed comparative advantage index, trade complementary index, trade specialization coefficient index and intra-industry trade index. Judging from various indicators, the products which have comparative advantage are different between China and ASEAN, and the products which have complementary relation are similar to the exports, which shows that the bilateral trade between China and ASEAN have solid foundation. Meanwhile, the results show that the trade between them is transferring from the inter-industry trade to the intra-industry trade. Then, the paper researches the factors on bilateral trade through theoretical analysis. The gravity model which is established using 2000-2005 panel data of nine countries in ASEAN and China on total and industrial level is used in analyzing the factors on bilateral trade. The result of this research shows that growth of the GDP, establishment of CAFTA and tariff concessions promote the development of the bilateral trade between China and ASEAN,but distance takes negative role in the bilateral trade, and the impact on various industry is slightly different. Furthermore, according to the analysis's results, this paper puts forward the suggestion to promote the development of free trade area by coordinating with trade relations,adjusting the industrial structure, strengthening cooperation and reducing competition.