Abstract: Based on the Chinese leading establishment of China-ASEAN Free Trade Area (CAFTA), CAFTA actively promotes free trade zone industrial agglomeration and balance development, and promotes Asian member countries industrials upgrading and balanced development through the integration of regional economy.On the base of spatial economics theory of industrial agglomeration, commonly used H index and model analysis are applied in this paper. With Empirical study is carried out in the process of regional economic integration of industrial agglomeration and industrial agglomeration to balanced development path. Research results show that: (a) the effective coordination mechanisms of integration is just the balance mechanism of the free trade area; (b) coordination speeds up industrial transfer; (c) the final results of industrial agglomeration will be towards the industry equilibrium.

Key words: CAFTA, industrial transfer, industrial agglomeration, equilibrium effect