Research On Form Decision-making And Realization Of Knocked Down Trade Based On Intra-product Specialization Theory

Knocked Down(KD) trade refers to the multinational trade that splits the integrated products into sets of components.It is formed by enterprises through transferring the assembly process to the importing country or a third country and it is an important trade form which supports global production. The main objects of Knocked Down trade are complex assembly products with high value-added, such as automobiles, motorcycles, engineering equipment, etc. In order to promote the development of its own similar industries,the host country strengthens the trade protection gradually in the permission of the WTO rules, and takes the measures such as improving domestic production requirements and implementing tariff escalation to treat different degrees of separation Knocked Down products, as well as offering the products with more transfers of production process and high import substitution rate lower tax rates to encourage the process transfer of forengn enterprises. This transnational product process transferring after production achieves the extending of product value chain and it is helpful for the host country's industrial development. The implementation of this tariff escalation policy in different countries to encourage the processing trade has promoted the rapid development of Knocked Down trade. Knocked Down trade is one of the fastest development areas in the intra-product trades.The key decision-making issues in the process of Knocked Down export, especially the optimized deciong-making of Knocked Down trade form and the product customization management problems in the Knocked Down trade are researched, from the perspective of Knocked Down export enterprises.As the intermediate inputs formed in the process of production, the manufacturing process of the international division of labor for objects, Knocked Down trade only includes the processing trade formed in division in the manufacturing process; as the product production, the manufacturing links in the intra-produce trade definition for the the division stages , Knocked Down trade makes Knocked Down as the object for the Intermediate inputs, covering the Knocked Down's R&D stage and product sales stage in the host country, belonging to three aspects areas of the processing trade, service trade and technology trade. The direct action cause for the generation of Knocked Down trade is the host country's tariff escalation. Tariff escalation structure promotes the constant breaking and reconstruction of Knocked Down trade value chain, to realize the transferring of value. When the added value of the trade stage is enough to offset the host country's comparative disadvantage, the company trade is realized; when the added value of the trade stage is more than the value of Knocked Down assembly in the host country and the value of sales, the inter-company Knocked Down trade is realized. Knocked Down's division appears in the intermediate links of manufacturing,and there is a scalable region of vague definition in the links and different division points form different Knocked Down forms. Different Knocked Down forms are measured by the degree of split indicators which is decided by the cost tariff flexibility and the size of tariff. Knocked Down export enterprises select export forms according to the conditions of the minimum after-tax cost. Moreover, the decision can be made by comparing the simplifying tariff and tariff-equivalent; In the choice of Incompletely Knocked Down form, the export complete indicator is taken as decision-making variable, and the degree of complete is decided by the optimal equilibrium point formed by equalproduct curveor isoquant and equalcost line as well as import substitution rate. When the equilibrium point is in the requirement of import substitution rate, the decision-making point is the equilibrium point; when the equilibrium point is out the requirement of import substitution rate, the decision-making point is intersection of equalproduct curveor isoquant and equalcost line.For the objects of Knocked Down trade are complex assembly products, Knocked Down export enterprises should use mass customization to administer different forms of Knocked Down trade, based on the characteristics of complex Knocked Down product technical state and diverse user requirenments. Therefore, the derivative architectures of the KD platform and the KD family are imbedded in the derivative architectures of the existing product platform and the product family, to form the product customizable architecture with five layers, product platform, product family, KD platform, product family and orders. The product layer model with product platform layer, the product family layer and podium layer suite to share with the hierarchical structure,as well as Knocked Down layer model with the Knocked Down family layer and order layer to share a flat layer structure are established by polychromatic graphs theory. The customized product customization architecture system is established to support Knocked Down trade. Configuring Steps and algorithm are designed for product family configuration, the configuration of the Knocked Down platform, Knocked Down family suite configuration and order configuration. And the requirements of taking every layer intermediate of product mix and transformed layers as Knocked Down product are realized, to ensure the transmission of product attributes in Knocked Down trade configuration, as well as ascend of Knocked Down trade changes. Knocked Down contraction, mergers, branches and combination of configurating changes of Knocked Down platform configuration and Knocked Down family suite configuration are studed especially, and the example of motorcycle configuration validated the Configuring algorithm of Knocked Down platform configuration and Knocked Down family suite configuration.Applicating the results of this study, Knocked Down export enterprises can decide the export forms by using Knocked Down split degree decision-making method and complete degree decision-making method, and use product structure model and Configuring algorithm to establish Knocked Down Customized application system,to realize large-scale customized solutions.The innovation is mainly reflected in the following three aspects:â‘ The division of work theory of intra-product trade shows the comparative advantage is the direct action cause for intra-product specialization,and Global value chain theory also points out that the comparative advantage is the main factors to decide the value chain space configuration. Through analyzing the intra-product international specialization distributing link, the value chain path of Knocked Down product was defined. The necessary conditions to achieve value chain reconstruction among companies and in company were deduced. It is illuminated that host country's tariff escalation policy is the main factor to make the value chain break and transfer into host country. The value chain breaking regions of varieties of Knocked Down patterns is also determined.â‘¡By comparing the four export forms DKD, SKD, CKD and IKD of Knocked Down trade, the decision-making factors and changing pathes for enterpsises to choose Knocked Down trade forms in the host country's tariff escalation system were analyzes. On the basis of cost changes involved when Enterprises adjust their export forms, it is proposed that using product split degree indicator and complete degree indicator decides export form and establishs the optimal model.â‘¢In order to resolve the configuration management of the Knocked Down trade, it is provided that the architecture of the KD platform and the KD family are imbedded in the architecture of the product platform and the product family. The product customizable architecture is built with five layers, product platform, product family, KD platform, product family and orders. The product layer model and KD layer model are built to express structures and attributes of five layers through product configuration model of polychromatic graphs theory.