China's Intra-industry Trade Study

After World War Two, especially in 1970s' and 1980s', a series of new trends occurred due to scientific & technological development and international competition variation, one is that intra-industry trade (importation and exportation coexists in one industry) takes a large part in international trade, which is unexplainable by conventional theory. According to Theory of Comparative Advantage, because of great difference of factor endowments between developed and developing countries, mutual demand makes international trade happens between these two kinds of countries. But actually, trade happens mostly among developed countries, mainly within industries including large quantity of goods with similar factor intensity. Since China has entered WTO in 2001, the importance of intra-industry trade is more and more outstanding.The mechanical and electrical industry is the dominant industry of our country; it plays an important role in economic development. It is the key factor for our country in the transformation from developing country to developed country. In general, trades between China and other countries are mainly inter-industry trade. In recent years, with the fast development of China' s economy and considerable growth of exportation, China' s international trade suffers greatly from other country' s anti-dumping cases and such cases show a tendency of obviously rising. The mechanical and electrical industry of our country is the biggest victim of the world anti-dumping disaster. In these anti-dumping investigations, products and industrial links that had mutual benefits were striked seriously. It is a crucial issue to understand and hold the current situation of world anti-dumping cases. It is very important for reducing the market risks and keeping the sustainable development of intra-industry trade. Unlike the inter-industry trade, the intra-industry trade will not arouse such problems. The development of intra-industry trade will not change the ratio of capital and labor force, and it will not cause so many problems, such as unemployment. To avoid anti-dumping cases, the intra-industry trade becomes a useful tool.