A Study On The Comparative Advantage And China's Intra-Industry Trade

International trade is divided into Intra-lndustry trade and inter-Industry trade in theory. Intra-lndustry trade has been defined the behavior that some country proceed not only exporting but also importing products in the same industry. In the last 1980s and early 1990s, with the emergence of New Trade theory, the theory system of Intra-lndustry trade, which had been set up with focusing on scale economy and product differentiation, became a pretty important theory to explain the Intra-lndustry trade that occurred frequently between the countries with similar Factor Endowment. But New Trade theory hasn't replaced Comparative Advantage Theory completely to be the only theory system that explains Intra-lndustry trade, and in the other hand Comparative Advantage Theory has been developing and perfect itself, therefore both New Trade theory and Comparative Advantage Theory are able to explain the phenomena and character of Intra-lndustry trade.With the speed-up of world economy integration and the rise of developing countries, Intra-lndustry trade has been the new phenomena not only between the developed countries and the developing countries but also among the developing countries. As a large developing country, how to receive dynamic and static trade benefits from Intra-lndustry trade via Comparative Advantage is pretty important for China in order to overtake the economy in an ardent competitive environment. In view of the practice of foreign Intra-lndustry trade, this thesis will embark some studies as follows:1,Whether the studies on the theory of Intra-lndustry trade, which is researched by the scholars home and abroad, show that the traditional trade theory has been out of date and could not explain China's Intra-lndustry trade anymore;2,Because of the gap of the economy level and others, as the core of the theory system of Intra-lndustry trade, if scale economy and product differentiation are able to explain the actuality and peculiarity of China's Intra-lndustry trade;3,How to locate the trend of China's Intra-lndustry trade. Based on those three points, according to the international trade situation nowadays, combining the actuality and peculiarity of China's Intra-lndustry trade, this thesis figures that under the consideration of the origination and development of China's Intra-lndustry trade, only scale economy and product differentiation can not perfectly explain the actuality and peculiarity of China's Intra-lndustry trade. Thereby, the traditional theory and the theory of Intra-lndustry trade have to be associated to locate the trend of China's Intra-lndustry trade more properly when studying the China's Intra-lndustry trade.