The Study Of Intra-Industry Trade Between China And European Union

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 that 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 researches on the developing countries were comparatively few. At present, as for the demonstration studies on the intra-industry trade, academic circles most studies single country or estate as well as the intra-industry trade situation between China and developed countries, and seldom relating that to China and overall European Union. European Union being our important trade partners, bilateral trade volume always keeps increasing, and with the development of the economy, intra-industry not only has been an important component of the trade between China and European Union, but also has great influence on it.This paper is based on the intra-industry trade theory; it firstly analyzed the general development of bilateral intra-industry trade between China and European Union. The result of general research showed the level of intra-industry trade between China and European Union had been increasing on the whole, and by the end of 2004, the GL index between China and European Union had reached 0.509. This figure indicated the trait of the bilateral trade mode , namely, the share of intra-industry trade had excesses that of inter-industry trade, the frontier would be playing the leading role. On the foundation, it analyzed thoroughly from three angles such as the composition of the country, product structure, and trade competition and so on, and come to conclusion that the vertical intra-industry trade is playing the leading role.On basis of knowing the situation of intra-industry trade between China and European Union, enlightened by several western researchers'methods, this paper set up an estimated equation choosing four independent variables in the positive analysis of identifying determinants of intra-industry trade between China and European Union. It analyzed the influence of each variable using the joint entire analysis and Granger causal relationship and from two angles of long time and short term. On this base, it brought forward the countermeasure suggestion about improve the intra-industry trade between China and European Union from two angles of economic growth tactics and enterprise strategy.