| With international specification going from the tier of "product" into that of "working procedure", there has been a great change in the nature of international trade in the past several decades. The evolutive path of international division, inter-industry—intra-industry—intra-product, reflects the improvement of specification efficiency. It is the common effect of economic globalization, trade liberalization and technical improvement. As a burgeoning international division pattern, intra-product specification could tell us the mainstream and direction of modern technology and international cooperation. All the participants at every tier, such as international integration organizations, developed countries, developing countries and multinational enterprises etc., are combined together efficiently under the framework of international production fragmentation. The overall world welfare is enhanced by increasing the efficiency of utilizing resources, while every participant achieve their own interest or benefit.With the spread of production fragmentation, the economic position of East Asia was greatly promoted in the whole world. Furthermore, East Asia has become one of the most important focuses in the field of economics because of its well-developed intra-regional production sharing network. With rich and competitive labor advantage, industry agglomeration effect brought by the early enter of MNCs, China crowded into such international production division network. Moreover, China is taking over an important task in East Asia fragmentation, i.e., switchover between intra-regional intermediate goods and inter-regional final goods. However, with the growing-up of China as a big country in trade size, trade disputes against us have been coming up, various kinds of anti-subsidy and anti-dumping being increasing. Those trade frictions not only came from developed countries, but developing countries around us. Even there come many adverse parlances, such as "the threat of China" "the crowding-out effect of China" etc.If we take serious consideration into the production and trade characteristics of China, it will be found that processing-trade did a big contribution to the growth of Chinese export, which also accounts a lot for the increasing trade disputes. Therefore, if we probe into the feature and structure of the intra-product specification and trade in P&C in East Asia,.it will be good for better intra-regional cooperation, integration building, as well as enhance the competitive ability and explore the unique and dynamic growing path for East Asia. It also provides us with important theory foundation for questing for new economic developing path, improving trade developing patter and international division position.Lacking the attention to production process, traditional international theory could not give us a reasonable explanation to the current flow and feature of international trade. Employing the methods of international trade, the New Economic Geography (Spatial Economics) and Industry Organization Theory, this dissertation tried to analyze theoretically and empirically the influence of fragment on modern world economy. With subdivisional trade data in P&C, we are trying to test the size, structure and evolvement of production fragmentation network indirectly, card the relationship between the four technology tiers in East Asia and post the effect of core groups and countries, esp. that of China. Compared with the in-being studies, we emphasize the difference between traditional final goods trade and P&C trade, giving prominence to the special independent variable in intra-product theory, such as FDI, relative wage, service-link-cost, adjacent technology level of cooperative partners, etc.This dissertation has six parts. Chapter 1 explains the research motif, research aim, research method, structure and contributions. Chapter 2 reviews the relating literatures. Chapter 3 develops a theory-logic including locational advantage, stratagem action of MNCs, impersonality of production technology and service-link-cost four elements, based on which this paper analyzes the foundation of production sharing and the cause of its current country and region structure. Chapter 4 empirically checks the regional structure, direction and feature of the trade in P&C. Based on the subdivisional trade data, chapter 5 indirectly tests the influencing factors with augmented trade gravity model. Under the framework of intra-product specification, this paper probes deeply into the relationship of the 4 technology tiers and their contribution to the production sharing network in East Asia. We pay special attention to the effect of two special independent variables, i.e. the adjacent technology level of cooperative partners and technology improvement brought by the dynamic competition of the 4 tiers. Chapter 6 concludes, and points out the limitation and several directions for further research.This dissertation arrives at the following major conclusions.First, by going from the tier of product into the tier of production process, we further developed relative theories, which is important to explain the modern economic phenomena and features. For example, the traditional industry agglomeration is characterized by "regional vertical integration", i.e. upstream & downstream enterprises in a same industry getting together in a certain region so as to enjoyi the externalities brought by industrial clusters. Under the framework of intra-product specification, with the rapid improvement in technology, there come some common features in different industries production process, such as sharing common technologies, input and services. This fact induces a new pattern of industry agglomeration, which is characterized by "regional horizontal integration", i.e. enterprises specializing in similar production process getting together. By ascending the principal part from the level of firm to region, the relative firms could share bigger scale and scope economies brought forth by such new pattern of industrial cluster. In the same way, "marginal industries expansion theory" could also be extended to "marginal process expansion theory", so as to dig further the benefit of international division. In fact, many economists have done similar extension in relative trade and industrial organization theories, which have become the theory foundation of international fragmentation phenomenon.Secondly, it is easier for global production sharing to take place in a relatively small geographical scope. As far as a certain region is concerned instead of the whole world, the absolute magnitude of difference between countries affects fragmentation structure positively through comparative advantage theory. In the meantime, the diversity of countries difference (diversity of technological level of countries) reduces the cost of passing technology and creates more competitive press for every technology tier, by which it develops dynamic power for further development of fragmentation production pattern. The experience of production sharing network in East Asia is a typical example for the above statement. Thirdly, the growing speed of the P&C trade in East Asia is much more rapid than that of European Union and NAFTA. Many factors, such as MNCs, difference and diversity of different economies, lower trade cost and favorable investment environment, are key influencing element in the process of division in East Asia. Our study shows that China has been deeply integrated into the production network in East Asia and play an important and positive role in it. As far as international vertical fragmentation is concerned, the relationship between China and the Tigers is mutual complementary instead substituent. Although the contribution size of the 4 technology tiers is different, the role of any one of those 4 tiers could not be replaced. Furthermore, it is the complementarity and competition between different tiers that push the network developing in the long term. Complete technology tiers build unique advantage for the production sharing network in East Asia.
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