The Empirical Analysis on Changing Comparative Advantage between China and ASEAN

The process for establishing Asian Free Trade Area of China-ASEAN has been started since 2002. Actually this approach is the breakthrough for economic relationship between China and ASEAN, and is the important measure for the economic cooperation of South Asia as well. Following with this changing situation, this paper not only validates the development of industry hierarchy of South Asia, as called “flying geese model”， but also analyzes the changing situation of export comparative advantage on both China and ASEAN. As a matter of fact, although there is enormous potential for developing their economic cooperation, the closely relationship and detailed industry division between them have not been set up so far. So China and ASEAN shall harmonize their adjustment of industry structure to facilitate their trade relationship to intra-industry instead of inter-industry in the near future.