On Jan 1, China and ASEAN Free Trade Area (CAFTA) was established, which leads to a liberalization developing period for bilateral goods trade, service trade and investment. CAFTA is the first foreign Free Trade Zone of China. Zero of duty and no quota on the bilateral textiles and apparel trade will promote china’s textiles and garment export to ASEAN countries, on the basis of which China will play a more important role in the international division of labour.