On The Development And Key Determinants Of The Intra-industry Trade In Manufacturing Sector Between China And ASEAN--A Theoretical Analysis And Empirical Study

Two closely related topics on the intra-industry trade in manufacturing sector between China and ASEAN were addressed in this paper: the development and its key determinants. The first topic was discussed around such aspects as its general trend, the commodity structure and its role in China's overall international trade; the latter topic started with a comprehensive analysis on its long and short run determinants and was then developed further with a regression model to analyze the influences of GDP Per Capita, FDI inflow and the openness of the economies. Both theoretical and empirical study revealed that the intra-industry trade, instead of inter-industry trade, has become an increasingly dominant part in the trade of manufacturing factor between China and ASEAN. Such technology-intensive commodities as computers and their parts, office machinery and their parts and telecommunication equipments are the main intra-industry traded commodities. The regression analysis pointed out that GDP Per Capita, FDI inflow and the openness of the economies are key determinants of this phenomenon. It is predicted that with the establishment of China-ASEAN Free Trade Area, this trend will be more prominent.