China And India Within The Industry Trade Study

Nowadays, international trade is largely trade within industrial classifications. International trade is traditionally thought to consist of each country exporting the goods most suited to its factor endowment, technology, and climate while importing the goods least suited for its national characteristics. Such trade is called inter-industry trade because countries export and import the products of different industries. Different types of trade are captured in measurements of intra-industry trade: horizontal trade in similar products with differentiated varieties; trade in vertically differentiated products distinguished by quality and price; and vertical specialization of production that results in trade in similar goods at different stages of production. Intra-industry trade has been a hot topic among trade economist for several decades, but it has received scant attentions in China.This article, being compound of six parts, gives an overview of intra-industry trade between China and India. This article begins with a brief summary of relative research and theories in intra-industry trade areas and discusses the foundations of intra-industry trade theory and significance of intra-industry trade for an economy. With the development of international trade and China-India economy fast increasing, the author thinks it is very important and meaningful for China and India to enter into Intra-Industry Trade, which is contributed to mutual economy increasing and promotes tow-side trade and friend relationship. Next, through some statistical data, the author found there is a great chance in Intra-Industry Trade between China and India, which now is limited in several industries. Finally, the author, in this article, introduced some, and put forward some constructive advices, such as using differentiated product strategy, realizing scale economy, adjusting the domestic industry structure.