Sino-japanese Trade Structure And Division Of Labor Within The Industry

Recently, according to the rapid economic growth of China, trade between Japan and China are growing overwhelmingly. Therefore some people call China as a "World factory", "Incubator" and so on. Especially few years ago, so-called "Chinese threat theory" was heard frequently in Japan.According to the present situation, this thesis tries to make sure whether the trade between Japan and China consists in a complementary relationship or a competitive one and analyzes what kind of division of labor is established in two countries based on the data of Japanese custom. Besides, the article tries to define the influences of Japanese FDI to China to their trade.At first by reviewing the trend of Japan-China trade, analyzes the factor of its growth. Secondly, trade goods are classified into 3 types such as "producer goods", "capital goods" and "consumer goods (durable-goods and non-durable-goods)" and discuss the each comparative advantage of the division of labor at processing level. Also, trade goods are classified into 3 types such as "One-way-trade", "Vertical Intra-industry Trade" and "Horizontal Intra-industry trade" based on the HS9 category data. Then through analyzing the change of the structure of each electric-machine industry that occupies the top of the trade and fiber trade between Japan and China, clarifies the comparative advantage in each industry. Through the above analysis, the thesis summarizes the relationship between FDI and Intra-industry Trade by giving some examples of representative Japanese companies which invest in China and then gets the conclusion by comparing the result of case analysis and data analysis. At last, we get the conclusion that the expansion of the division of labor at process and industry level leads to the increase of Vertical Intra-industry Trade between two countries. Moreover, direct investments of Japanese companies in China are advancing the division of labor on the manufactural processes level between two countries. Trade between Japan and China is mostly still in a complementary relationship rather than a competitive one.