Analysis On Intra-industry Trade Of Chinese Manufacturing Industry

After World War Two, development of scientific technology and international competition lead to a series of new trends on international trade. A great deal of international trade occurred among industrialized countries, and data further shows that a big part of trade comes from intra-industry trade rather than inter-industry trade. With the fast integration of world economy and growing up of developing countries, intra-industry trade gradually becomes the new trade phenomenon between developed and developing countries. China is the largest developing country in the world; the phenomenon of intra-industry trade also exists, and the proportion of intra-industry trade to total international trade is rising year by year. This paper aims at theoretically reviewing intra-industry trade and discussing intra-industry trade of Chinese manufacturing industry and its determinants, which has important theoretical and practical meaning on improving trade configuration and transferring to a strong country of the world.This paper first introduce related intra-industry trade theory, including concrete measurement, theoretical analysis and models, then study the present Chinese manufacturing industry's scale, market structure and foreign direct investment on the basis of collected data. Figure up intra-industry trade ratio of the main manufacturing industry and manufacturing products according to Grubel-Lloyd index, and describe the position and function of manufacturing industry's intra-industry trade in China's foreign trade according to contribution analysis method. Next, the paper put forward an empirical analysis on determinants of intra-industry trade about China's manufacturing industry by the way of multivariate linear regression, in country-specific and industry-specific aspect. The result shows that trade of China's manufacturing industry is changing form inter-industry trade to intra-industry trade, with a stronger trend. Among all factors, economical development level and product differentiation positively affect intra-industry trade; while geographic distance, market structure and foreign direct investment have negative effect on intra-industry trade; per GDP differentiation...