The Analysis Of Border Effect Based On China And ASEAN Free Trade Area

This article is amied to analysis the border effect based on China and ASEAN Free Trade Area(CAFTA). Border effect is usually refers to the block effect made by the boundary for the national and regional trade. CAFTA develop rapidly, ASEAN has become China’s third largest trade partner, China is the largest trade partner of ASEAN in2011.We all know that country border is inevitable, but it is also benefit to promote the trade activities through declining the border effect. This article analysis the border effect between China and ASEAN by positive analysis, with Gravity Model of Trade.Then we found that the border effect block the international trade significantly,and also get the result as" The lower trade barriers, the smaller border effect."In the final part, we discuss the reason of border effect,like the differences of National economic development, transaction cost, domestic consumption preferences and so on. At last, this paper puts forward some methods to reduce the border effect,such as playing the positive role of government, strengthening sub-regional economic cooperation, promoting trade develop levels, expanding the monetary cooperation.