Research Of The Cross-strait Intra-Industry

Since the 1960s, there has been a revolution in the international trade theory. The trade theory of imperfect competition represented by intra-industry trade theory becomes the frontiers of the international trade studies after World WarⅡ, and it is also one of the research fields combining industrial organization theory with international trade theory. It leads to a breakthrough for all countries to embark on a new round of economic growth in a new manner. Therefore they can obtain more dynamic trade interest out of conventional theory. For a long time, most of previous researches focus on developed countries, and the development of intra-industry trade in developing countries was overlooked, especially for the intra-industry trade between countries of different economic development level. The Chinese mainland and Taiwan are developing countries and emerging economies. Bilateral trade volume between Chinese mainland and Taiwan has sustained growth. With the development of the economy, intra-industry trade has become an important part of the trade between Chinese mainland and Taiwan, and also has great influence on the development of bilateral economic and trade relationship.Based on the intra-industry theory, this paper uses Grubel-Lloyd index and Competitiveness index to analyze the overall situation of intra-industry between Chinese mainland and Taiwan. The result shows intra-industry trade between Chinese mainland and Taiwan has development fast, and its speed is faster than the overall trade development speed. But the overall level of intra-industry trade is still in low. Inter-industry trade is still the main form of the cross-strait trade. It also shows the pattern of intra-industry trade is transforming form vertical intra-industry trade into horizontal intra-industry trade.In the basis of status, this paper research three affecting factors of the Strait intra-industry trade. It turn out that Economic development level of Chinese mainland and the direct investment of Taiwan play a key role in the Strait intra-industry trade. Finally based on the above conclusions, this paper submits countermeasure suggestion.