Research on CAFTA Bilateral Trade Potentials:An Analysis Based on Trade Complementary and Modified Gravity Model

This research conducts a calculation on trade complementary index from the product level based on trade data during 1995-2009 between China and ASEAN countries.The result shows that great potential of trade exist between China and ASEN countries with an ever growing bilateral complementary trade.In the meantime,the establishment of free trade zones will trigger further development on bilateral trade in these areas.Moreover,the research,based on the Gravity Model,makes a quantitative analysis on bilateral trade factors by using Panel data during 2000-2009,and shows that both the economic scale and population of ASEN countries have an obvious effect on bilateral trade flows.Whereas,the financial crisis of 2008 has relatively feeble effect on the bilateral trade,indicating a much closer trade dependency between both parties.