The Research Of China's Role In Intra-product Specialization In East Asia

Since the 21st century, East Asian economies follow the trend of globalization and IT to enhance the industry structure through high-tech. It's the first time for East Asian economies to keep up with global industry structure upgrading. It arises from intra-product specialization in East Asia. From the perspective of intra-product specialization, this paper adopts statistical analysis and comparative static analysis to study China's role and its evolution in East Asian intra-product specialization. Firstly, the author uses the data of trade in parts and components, and in manufactured finished goods as well as their respective shares to study the pattern of intra-product specialization in East Asia. The result suggests the triangular trade pattern with value chain including Japan/NIES-China/ASEAN-Europe/US. That is to say, Japan and NIES export parts and components with their advantages in technology and capital, China and ASEAN make use of their cheap labour to import parts and components for assembly, then export the finished goods to Europe and USA. Moreover, intra-regional trade is on the rise steadily, obviously intra-product specialization in East Asia tends to grow. Secondly, this paper analyzes the composition of China's processing trade and high-tech product trade in East Asia to study the evolution of China's role in East Asian intra-product specialization. The result shows that China is in the stage of low added value and began to transform from labour-intensive production to technology-intensive production, but it has been associated with an increased dependence on foreign capital. Therefore, for the purpose of China's fast transformation and greater role in East Asian intra-product specialization, on one hand, the related enterprises should increase R&D expenses to upgrade innovative capacity and extend the value chain forward, on the other hand, the enterprises should build up their brand, go international, increase marketing power and improve sales service to extend the value chain backward. In addition, government should increase the support for R&D expenses and take part in the economic integration in East Asia.