New Development Of International Trade Theory To Explore

International Trade Theory discusses the cause, the distribution of welfare and the structure of international trade and specialization. It has been more than 200 years since"An Inquiry into the Nature and Cause of the Wealth on Nations"by Adam Smith was first published in 1776. There are three stages of the trade theory including Classical Trade Theory, Neo-classical Trade Theory and New Trade Theory, which respectively reflects distinct characteristics of different stages of international trade development.Along with the development of economic globalization, international trade over the last 40 years had distinct characteristics from it had been in history, which makes existing international trade theory unqualified in explaining. That exports of manufactures in developing countries boosted (Helleiner,1973), and that the ratio of imported to domestic intermediate inputs in developed countries like USA, United Kingdom, Canada and Japan kept increasing(Feenstra , 1998), are some of those distinct characteristics. By observing the trade data of developing countries and China, the author found a phenomenon that from 1980's, the exports of manufactures in developing countries exceeded their exports of primary commodities, and the exports of manufactures with medium and high skill and technology intensity kept increasing rapidly and became the largest product group in the commodity exports of developing countries.This phenomenon is opposite to what factor endowment theory predicts. The author tried to explain this phenomenon with all the existing international trade theories but failed. What kind of international specialization urged the emergence of this new structure of international trade?Compared to the international specialization in history which was based on final product, the up-to-date international specialization has a...