The Impact Analysis Of The Distribution On China’s Industry Under ASEAN Overlapping Free Trade Area

Overlapping free trade area is also called "wheel-spokes" free trade area, it is composed of the "star" structure. As countries partic ipate in increasing the number of regional trade arrangements, a country can take part in many established multiple free trade areas, at the same time. From the point of view of a country, it can form one country as the center gathered around the multinational "wheel-- spokes" structure. Viner’s analys is based on the theory of customs union, where exist trade creation effect between member states and may exist the trade diversion effect between non-member countries. In the overlapping free trade area, trade creation effect and trade diversion effect exist between members and non-members. Due to overlapping free trade area is special "wheel spokes" structure, making the industry of the spokes countries transferring to wheel country.It calls wheel effect. This will produce adverse effect on position of national industrial development in the spokes countries.In this paper, in order to study the influence of the different size countries(especially the status of the small axle countries and the status of the big spoke countries) of overlapping free trade area, this artic le relaxes assumptions between countries under the Capital Flows model and joins the different size of the market factors. This paper uses the method of general equilibrium analys is to analysis the effect of size of the different position of wheel country and spokes countries’ industrial development. The study found that the industry share of the country of the shaft and the spokes in specific trade openness in cases is influenced by their share of spending. In given freer trade, small axle countries have superpower wheel effect produced by the influence of the difference between the two countries by expenditure share. In given trade freedom, axle shaft effect between small and spokes superpower is influence of between the two countries. As the expenditure share difference is beyond a certain range, axle small countries will no longer wheel effect. Axle small countries share among countries with the spokes industry tend to be more consistent with their respective share of the spending.In reality, the association of south-east As ian nations(ASAEN) and China, Japan, South Korea, India, countries such as Australia and New Zealand free trade area is established. ASAEN is in position of axle countries in many countries, and China is in the spokes. So in theory the analys is of the effect of the new type structure of China will be necessary. This paper is from two aspects of theory and reality to confirm that as the impact of China’s huge market scale makes the ASEAN has not been more obvious effect of shaft. Therefore, the CAFTA overlapping free trade area is conducive to the development of China’s economy, and China can expand their spending to exert influence on the development of industry.