Trade Structure Of Thailand And China In Manufacturing Products

From the view of export trade structure, the paper attempts to explain the pattern ofcommodity trade in manufacturing sector between Thailand and China. First, the papercompares the structure of export trade from both countries in the world market. To achievethat, we use the Export Similarity Index (ESI) and the Revealed Comparative AdvantageIndex (RCA). Then, we continue to investigate in more in-depth details. This part discusseswhether the Thailand and China have a lot of mutual trade with each other in various productgroups. That is, there could be a lot of intra-industry trading between them. To check on this,the paper firstly uses the so-called Intra-Industry Trade Index (IIT). Then, to have a clearerpicture of Thailand and China trade pattern, the paper selects the important goods between thetwo countries to be analyzed, whether its pattern is a vertical or horizontal intra-industry trade.Through the above analysis, it reveals that Thailand has similar export structures to China andits trend is gradually increased. As a result, there are two implications;firstly, China tends tobe competitive with Thailand in the world export market. Secondly, while the exportstructures may be similar, but if the two countries have a lot of intra-sector trading, then thesimilarity of export structures may indicate complementarities in trade as well ascompetitiveness. And from the analysis, we can see that the IIT index is high and it tends toincrease continually. In addition, the trade pattern between the two countries is a vertical one;Thailand exports higher unit value products to China. Moreover, the determinants of IITbetween the two countries are mainly from the MNCs and the increasingly more integratedregional production network of the East-Asian. It is predicted that the IIT will be the newsource of their bilateral trade's growth. In the future, both countries need a clear vision of itsown future that will provide a frame of cooperation between them.