Research On The Industrial Integration Of China - ASEAN Free Trade Area

ASEAN-China Free Trade Area (CAFTA) is the largest free trade area established by the developing countries. The full implementation of the CAFTA was from January 2010,and on November 2015 China and the Association of Southeast Asian Nations (ASEAN) sealed a deal to upgrade CAFTA, which meant CAFTA was further forward to a high level and the depth of the integration process of the CAFTA also started to advance.However, due to the differences of member countries’ natural resources, industrial bases, the size of the domestic markets and the level of economic development, the industrial development of all countries will be subject to different degrees of impact in the depth of the integration process of the CAFTA. We need to coordinate balanced industrial development across countries if wanting to realize the successful deepening and balanced industrial development of the CAFTA in the depth of the integration process.Therefore, the research focused on the problem of the balanced industrial development in the depth of integration of CAFTA had a good practical significance.Currently, the industrial cooperation of CAFTA is mainly trade-oriented and investment- oriented. Regional international trade and regional international investment is main industrial cooperation ways among the members of CAFTA.Therefore, this article mainly study industry balanced development of the CAFTA from three perspectives of industrial investment balance, trade balance and space industrial layout balance.The author first reviewed the development status of the CAFTA from industrial investment and industrial trade.Then based on a theory of new economic geography, author made a dynamic simulation analysis of industrial agglomeration spatial effect with a multi-national liberal Free Capitalist Model. The study found the overall level of CAFTA industrial cooperation was low, and there was an imbalance distribution between the country and industry. What’s more, with the increase of trade freedom,industrial development of small countries wil suffer a huge impact, which will intensify industrial development imbalances. We can conclude that obvious differentiation of each country’s economic development, centralization of industry cooperation on country and industry distribution and industry development agglomeration in the depth of the integration process are three main constraint factors of balanced development. So, the author proposed specific policy and advice to achieve balanced industrial development:firstly, each member countries could leverage the CAFTA cooperation framework to achieve their own development, what’s more they could conduct multi-dimensional industrial cooperation to achieve balance industrial cooperation, and last they could establish mechanisms for coordination and balance to balanced industrial development of small member countries.