Research On The Vertical Specialization In East Asia And The Shift Of China's Trade Structure

Nowadays vertical specialization is a typical of the international specialization. From the point of view of vertical specialization, it analyzes vertical specialization between China and East Asia from two aspects: one is to evaluate the level of vertical specialization by using the index of vertical specialization. Another is to analyze, with the index of technical content of parts and components, the trade of parts and components structure between China and other East Asia countries. The result shows that the vertical specialization often occurs in the capital- or/and tech-intensive industries. Through undertaking the labor intensive procedure of capital and technology-intensive products, China may take part in the vertical specialization within East Asia and all over the world. In the vertical specialization of East Asia, China takes the position of processing and assembling that has low value-added. On the basis of above, this paper studies the effect of vertical specialization on improving trade structure and trade position, by using indexes of sophistication and of intensity export structure. Through participating in East Asia vertical specialization, China has increased its proportion of exports of capital- and tech-intensive products. Electromechanical products dominate in China's export. The analysis also shows that there is a big gap of sophistication of export between China and developed countries. The products of low sophistication dominate in China's export. The trade position of China does not change. Therefore, when participating in the global vertical specialization, China should raise its position in the value chain and the international specialization.