Calculation Of Vertical Specialization Share Of China And International Comparison

The international division of labor has changed enormously since the 1990s, a part of the division has switched from inter-product to inter-procedure, and leads to a vertical specialized trade between semi-finished products and finished ones. This thesis is to probe into the development of vertical specialized trade (processing trade) in China on the basis of vertical specialization. With the usage of the method of estimating the vertical specialization proportion by the Hummels and the input-output sheet of China from 1987 to 2002, a estimate on the vertical specialization proportion of China's exportation has been done. Furthermore, the vertical specialization proportion of exportation of America from 1998 to 2004 and another 14 typical countries in 2000 has been estimated and compared with China. And we come to a conclusion that the vertical specialization of China's exportation has doubled in the last 15 years from 0.095 in 1987 to 0.199 in 2002. And the most vertical specialized industry turns out to be the mechanic field while industries with much trading friction such as textile industry is less vertical specialized. Compared with America, China has a lower net realizable value in exportation and is located in the low end of the value chain. And Asia is the main sourcing area of China's importation of semi-finished products.