Research On China's Export Commodities Structure With European Union

Since the establishment of diplomatic relationship in 1975, fast development of bilateral trade has made China and the European Union become each other's most important trade partner. The main tasks of this thesis is to analyze the changing structure of export commodities and generalize its current features, to have a empirical analysis on the influencing factors of intra-industry trade level between China and the European Union, to put forward suggestions on optimizing China's export commodities structure. The conclusion of this thesis is that China's export commodities to the European Union are mainly labor-intensive manufactured goods, while European Union mainly exports capital and technology-intensive goods to China. China's trade surplus from the trade with European Union is mostly from those trades of low added-valued, labor-intensive, manufactured good. Currently, China's interests from its trade with European Union are due to its large trade volume, so China's commodities trade structure with European Union coincides with its factor endowment and conditions of industrial development.This thesis also applies several trade indices to analyze the competitive advantage of China's export commodities to European Union as well as mode of intra-industry trade. Even though in recent years, export trade structure has been improving constantly, especially the capital and technology-intensive goods take up a larger percentage in total goods year by year, but only limited types of good have obvious competitive advantage. Based on the model of related intra-industry trade theories. This thesis introduces variables of into the econometric models. Through the unit root test and cointegration test, it shows that intra-industry trade level between China and the European Union has stable long-term cointegration relationship with GDP gap, per capita GDP gap, FDI, China's scale economy level and both sides' R&D gap. China's trade with European Union has both Inter-industry Trade and intra-industry trade, with Inter-industry Trade as its mainstream. The intra-industry trade volume is developing fast but of vertical nature.