The Analysis Of Manufacturing's IIT Between China And East Asian Countries

With the subject of the Machinery and Transport Equipment (SITC7, Rev.3) for the study, it first point out importance of SITC7 in the bilateral trade between China and East Asian countries, and then analyze the country features and industry1 features of IIT in SITC7. Through analysis, it can be seen that although the bilateral trade of SITC7 is still dominated by Inter-industry trade, the proportion of IIT has been improving, which is dominated by VIIT. The trade of SITC7 is concentrated in a few groups, such as 716 group, 752 group, 759 group, 764 group, 771 group, 772 group, 776 group and 778 group. After analyzing those 8 groups' trade flows, trade balance and IIT index, it further classifies IIT into HIIT and VIIT. It is found out that parts and components is the major force behind SITC7' IIT.It analyzes not only the traditional country factors and industry factors influencing IIT, but also the International Production and Distribution Networks in East Asia, which is the inherent mechanism of East Asia's IIT. On analysis of International Production and Distribution Networks in East Asia, it mainly from the three aspects: FDI, Intra-firm Trade and Parts and Components Trade. China's processing trade and the "Three-Funded Enterprises" also makes significant contributions to the SITC7's IIT with East Asian countries.It also establishes a model for empirical analysis. The results show that tariff's decline, FDI's argument, the increase of gap between trade partners' per capita GDP promote SITC7's IIT, while the increase of gap between trade partners' per capita fixed capital hinders SITC7's IIT. It is concluded by the significance for economic integration in East Asia and China's position in the International Production and Distribution Networks in East Asia and its policy options.