Research On Standardization And Trade Development In China

With the development of economic globalization, the world economy is in a situation with increasing standardization. However, there appears a diversification of standards in the world standardization process because of the differences of the countries or regions involved. This diversification makes competition in international competition more and more fierce. However, how does standard affect international trade? To what extent will China's standardization affect international trade? How to promote mutual benefits in China's international trade through standardization? It has important theoretical and practical implications to explore these issues systematically.According to the existing literature, it is widely accepted that standardization has an important impact on international trade. However, the existing research mostly focuses on theoretical assumptions and empirical analysis, with few attempting to analyze its theoretical mechanism. In this paper, we explore from three perspectives the mechanism through which standard acts on international trade, enriching the theoretical research in standardization and international trade.First is the impact of standardization on scale of international trade. Scale of international trade is an indicator measuring the overall development of trade. To explore the impact of standardization on trade scale is in fact to treat standard as a factor affecting trade development and then to analyze the mechanism. In this paper I first explain this using the theory of scale economy. Standard promotes the development of scale economy from the technological and institutional perspectives, while scale economy which was introduced into international trade theory after World War II, is a very important factor affecting trade development, therefore standard is a factor promoting trade development. Then we introduced the concept of network externalities, since standard has a typical characteristic of network externalities which changed the consumers'and producers'practice of evaluating product value merely from the technical perspective without taking into consideration of the user base. The user base of a product is enlarged from domestic market to international market through international trade, increasing product value based on network externalities. Empirical evidence using China's standard and trade statistics indicates that standard is really one of the important factors promoting China's foreign trade development.Second is the impact of standardization on international trade structure. Trade structure is an important indicator measuring the quality of trade development. Whether the trade structure can be optimized continuously and whether it suits the domestic economic characteristics or not are both important issues when considering a country's foreign trade. Technologically, standard can advance the international trade structure with high technological standard being able to raise the technological content of the exported products, hence the structure advancement of exported products; on the contrary, product with low technological content will check the quality jump of the exported products, inhibiting the structure advancement of the exports products. Standard can help increase the intensity of production process division, deepen the international division of labor and development of trade in intermediate products. However, the constraint of standards on product diversification is an unfavorable factor. China's experience indicates that increase of standards has a significantly positive impact on optimization of export structure and trade in intermediate products.Third is the impact of standardization on international trade benefits. Trade benefit is the major indicator assessing the results of trade development. Differences in standards result in profit transfer in the manufacturing process. Therefore, whether viewed from the perspective of final product, intermediate product, or value chain governance, who takes the initiative and has control right over the promulgation and implementation of the standards, who then can gain more benefits in the international trade. The empirical testing of China's standard stock, China's price terms of trade and the terms of trade by production process division show that increase of national standard stock is conducive to improvement of China's price terms of trade.After comparing the development status of standardization process and its economic effect among China, Britain and Germany, we found that although China's standardization has made some progress, compared to the developed countries, whether considered from the promulgation and its implementation and modification, or from the perspective of the role of standardization on economic and trade development, there still exists a large room for further development in China. Therefore, based on the above theoretical and empirical analyses, we give some suggestions on how to further develop our standardization and strengthen the impact of standardization on economic development in such aspects as strengthening international competition in standards, increasing the self-owned technological content of domestic standards and so on.