Determinants Of Intra-industry Trade In China: Theoretical And Empirical Analysis

Since World WarⅡ, intra-industry trade as a new pattern of international trade has been developing very quickly. Nowadays, intra-industry trade has become the main form of international trade of manufacturing. With the trend of globalization and the rapid development of China's economy, intra-industry trade is taking more and more percents of the whole in China's international trade of manufacturing year by year.The thesis concludes the form and determinants of intra-industry in terms of theory and its realistic development. Then it examines China's intra-industry development in details and conducts an analysis using the cross-section panel data of China's 30 industries from year 2000 to year 2003. The explanatory variables include scale economy, product diversity, market structure, foreign direct investment. The paper uses Grubel-Lloyd index to calculate intra-industry trade index of China's 30 manufacturing industries based on the general classification of SITC, and it also analyzes two types of intra-industry trade in China's 30 manufacturing industries: Horizontal Intra-industry Trade and Vertical Intra-industry Trade. The result is expected. Finally, according to the reality in China., this paper makes some relative suggestions for the development of intra-industry trade in China in the future.