The Research On Intra-industry Trade Of China-ASEAN Free Trade Area

China-ASEAN Free Trade Area is the first regional economic integration organization built to conform the trend of regional economic integration. From signed the "The Comprehensive Economic Cooperation Framework Agreement" in2002to fully completion in2010, China-ASEAN bilateral trade volume increased from$78.5billion to$400billion with average annual growth of about40%; ASEAN rose to third place from China’s fifth largest trading partner, and China rose from ASEAN’s sixth largest trading partner to the first. During the decade of construction, China-ASEAN Free Trade Area has become the third largest FTA in the world followed by the EU and NAFTA. The trade between China and ASEAN develop rapidly, meanwhile the share of bilateral intra-industry trade has been increasing. According to New Trade Theory, the development of intra-industry trade can reduce the economic adjustment costs of trade liberalization among trade partners, can expand the intr-regional trade and can improve the welfare of intra-regional trade partners. If the theory is true, then what’s characteristics of the intra-industry trade of China-ASEAN Free Trade Area? Based on this, we analyzes the characteristics of intra-industry trade of CAFTA with the G-L index and adjusted GHM method from the perspective of the general, the country, the industry category and the product category. The result shows there are the characteristics of intra-industry of CAFTA as a whole. From the perspective of countries, China and the more developed ASEAN countries(Indonesia, Malaysia, Philippines, Singapore, Thailand) take on characteristics of intra-industry trade, while, China and the less developing ASEAN countries(Brunei, Cambodia, Myanmar, Laos, Vietnam) present the characteristics of inter-industry trade. From the perspective of industry category, there are mainly intra-industry in primary product industry and manufactured product industry between China and the more developed ASEAN countries, while there are mainly inter-industry trade in primary product industry between China and the less developing countries. From the perspective of product category, there are mainly intra-industry trade in skill and technology intensive manufactured products between China and the more developed ASEAN countries, while there are mainly inter-industry trade in labor and resource intensive manufactured products between China and the less developing ASEAN countries. Shortly thereafter, the paper analyzes the factors which influence the intra-industry trade of CAFTA and make an empirical test with Gravity Model. The results imply that the scale of national economy, the income level per capita, the degree of trade liberalization have the significant positive effect, while the foreign direct investment, geography location have the none-significant effect. Finally, the systematic policy recommendations to promote the development of inta-industry of CAFTA are put forward according to the characteristics and influencing factors of intra-industry trade between China and ASEAN.