Intra-Industry Trade Theory And Adjustment Of Chinese Foreign Trade Structure

The reform and opening-up in China witness the rapid development in foreign trade and the constant optimization in foreign trade structure. Especially after the entry into the WTO, with the great strides in economic power, Chinese foreign trade structure in export commodities transforms to comply with the general tendency in global trade, approaching gradually developed countries in its level. In recent years, however, this transformation can be neither explained sufficiently and rationally by Comparative Advantage Theory nor predicted in its trend. Based on this fact, therefore, this thesis attempts to find out the answers with the help of Intra-industry Trade Theory. Firstly, foreign trade structure and relevant theories to trade are introduced. After Intra-industry Trade Theory and the impact of the development of intra-industry trade on foreign trade structure, this thesis finds out the trend of international trade from theoretical perspective. Secondly, the current situation of foreign trade structure of China is analyzed. After an empirical analysis on the foreign structure, Normalized Trade Balassa, Revealed Comparative Advantage and Terms of Trade, this thesis assesses the current foreign trade structure in China, and predicts its transformation tendency on the basis of the transformation in economic strength in recent years: with constant enhancement of economic strength and international competitiveness, Intra-industry trade with the scale economics as its base will become the mainstream of trade. Thirdly, empirical research to the development ofChinese Intra-industry trade is depicted. After the analysis of the development of Chinese Intra-industry trade by Intra-industry trade index as well as the analysis of the change in foreign trade structure by Intra-industry trade theory, this dissertation draws on a conclusion that Intra-industry trade with the scale economics as its base is inevitable in the development of Chinese economic trade. Finally, bases on the previous accounts, some suggestions are put forward to comply with this trend.