| The problems appearing in current economic movement is reflection of structural contradiction whose essence is inability of former industry structure to drive economy to go up quickly and stably. As one of the main foreign activities of a country, International Trade is the important and crucial factor of economic development, and itself progress is relevant to economic development in a high grade. The original intention of this article is to realize the formation mechanism of Intra-Industry Trade and enhance it of our country through policy guidance and law standardization; thereby we can understand the importance and feasibility of industry upgrade from the point of view of trade and globality.The article consists of five parts.Part one expounds author's main idea while gives an introduction to the issue of Intra-Industry and industry upgrade. The author thinks what relates with industry upgrade most directly is the material about intra-Industry trade. Along with in the history the biggest division of labor all over the world the trade structure changes accordingly, so that China's entry into the WTO means that its country development structure in the system of labor division and trade has altered greatly. To accelerate the economy-growth mode change from extension ruled to intension ruled and to upgrade industry is a strategic task China has to face for the future. The classic theory about division of labor and trade based upon factor endowment has passed by its period pulling the economy in a high speed. The amount of foreign trade after China's entry into the WTO will be larger undoubtedly. With intensification of general national power, industry upgrade of China is binded by former theory of International Division of Labor and International Trade based on theory of pure Comparative Advantageæ¡Ÿomparative Advantage decided by Theory of Factor Endowment arranges the countries like China in "low location of industry chain" and the comparative advantages attained are very limited, whereas the proportion of intra-Industry trade in reality is being extended.Part two mainly introduces content related to intra-Industry trade and industry upgrade. Firstly, illuminate the up-to-date new characters of labor division and trade through comprehend the background of intra-Industry trade, analyses applicability of classic theory of comparative advantage in special situation then expatiate the detailed theory of intra-Industry trade, defines the standards (SITC) and measurements (G&L index), and gives a simple introduction for theory of preference similarity, theory of technological gap, theory of scale economy and imperfect competition, theory of international production cycle, and theory of country competitive advantages. Secondly, discuss the industry upgrade's meaning, standard, and factors infecting industrial structure; explain itscharacteristics, the cause industry upgrading slowly, and confirm the target of industry upgrade through analysis of present industrial structure in China.Part three tells the infection of industry upgrade to intra-Industry trade. There are two main infection: i. industry upgrade can promote the scales of intra-Industry trade that the core of industry upgrade for developing countries like China is the process of industrialization, and intra-Industry trade closely contacts with economic development, via industrialization higher Intra-Industry trade more, but the promotion is not for every industry that the power has its orientation when it promotes the scales; ii. Industry upgrade can restructure Intra-Industry trade that the trend realizes through change of products' structure, its manner through change of semi finished products' yield, and its approach through multinational companies' interior trade.Part four refers to the actions of intra-industry trade on industry upgrade. It shows the immense drive effects of intra-industry trade on industry structure in developing countries through explanations of significant influences of intra-industry trade on industry structure...
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