The Theory And Demonstration Study On Intra-industry Trade Of China By Theory Of Demand Preference Similarity

Since the reform and openning-up, the export of china dependent seriously the marketing of USA,Japan and EU. The export trade of china is closely related to the economy development of the three countries and regions, which have began to expose some questions seriously. Nurturing new market is very important to our country in this situation.This paper mainly research the intra-industry trade by the theory of demand preference similarity, and propose that china should strengthen the trade contacting with the developing countries. China and developing countries have similar economic development level and demand preference, so they exist more potential to develop intra-industry trade. Strengthening the trade contacting with the developing countries, improving trade share with these countries, can change the unreasonable trade structure, improve Chinese intra-industry trade level further, which is in favor of promoting industrial structure's adjustment and promoting long-term economic growth of china.Theoretical circles have made relevant research about intra-industry trade, but as a new trade theory, it still hasn't reached mature stage, and it lacked deep research about which factors will lead and impact the intra-industry trade, also there still have some question on theory research. Now, most intra-industry trade research is mainly on developed countries, but little about developing countries, especially empirical analysis on the intra-industry trade of china. On the other hand, the theory of demand preference similarity explained the manufacture intra-industry trade between developed countries, so theoretical circles commonly thought that the theory of demand preference similarity apply to explain the intra-industry trade between developed countries. But does it apply to explain the intra-industry trade between developing countries? There is no relevant research. Meantime, it lack theory prove and empirical analysis.Against the defect of above research, on the frame work of intra-industry trade theory, we reference research results of scholars at home and abroad, expanse existing theoretical model, we research the theory of demand preference similarity and the theory of intra-industry trade together, by the mathematical reasoning, on one hand we prove the theory of demand preference similarity, and it also apply to the trade between the developing countries; on the other hand, the intra-industry trade level of those countries which have similar demand preference is relatively high. At last part, on plus variables of demand preference similar, we make regression testing to the factors which impact intra-industry trade, we hope to get that the demand preference similarity and the intra-industry trade level are a positive correlation. In the end of article, we will discuss the correlation between the two theories, get the relative research result, and give some policy recommendations.