The Impact Of Vertical Specialization In East Asia And Its Impact On Sino-America Trade Imbalance

The amount of trade between China and the United States has been increasingsince China opened its economy to the world. However，the imbalance of Sino-UStrade has been raised. The reasons of the imbalance of Sino-US trade are variousand complicated. Considering the special economic relationship among China, otherEast Asian countries and the United States, this paper investigated these reasonsfrom the perspective of vertical specialization of East Asian. China still stays in thelow-end of East Asian vertical specialization chain, which mainly engages inlow-tech processing and assembly and ultimately exports to the United States. Sincethe United States is the end that Vertical Specialization in East Asia points to and theChina is in the low-end of the vertical specialization chain，China has been alwaysundertaking the major task of exports to the U.S.. To a certain extent, China isactually representative of the entire East region who is trading with the UnitedStates. China should be dedicated to industrial upgrading as well as cooperatingwith the neighboring countries actively for the development of economies. What’smore，China should also exert all its power to become the final product of EastAsia’s markets to get rid of dependence on the U.S. market.This paper is divided into five chapters.The first chapter is the introduction，which introduces the main meaning of thispaper，the relevant academic literature review，the structure and the main ideas ofthe whole paper，the inadequacies and innovations.In the second chapter, the summaries and analysis of the current imbalancesituation of Sino-US trade are made. From the quantity and structure perspectives, it is found that the status quo of Sino-US trade imbalance is very severe. The specificperformances are showed that the trade surplus of China is large and the levelstructure of export commodities is low.In the third chapter, the particular analysis of vertical specialization in EastAsia the situation is made, and the conception of vertical specialization in EastChina’s position is further defined. Status of the production division of labor in EastAsia has been different from the traditional "flying geese", which reveals that thevertical specialization is more distinctive. At present, China’s vertical specializationin East Asia’s position is still in the low-end on the whole.In the fourth chapter, the author analyzes the reasons of Sino-US tradeimbalance from the perspective of vertical specialization. Considering therelationship among China，East Asia and the U.S., the East Asian countries to Chinahas trade surplus, while China to the United States has trade surplus too. Throughthe vertical specialization analysis，it reveals that the situation in East Asia thatChina’s downstream industrial chain division of the status of East Asian countries isdue to the part of surplus transferred to the United States.Chapter V is the conclusion of the paper. It is found that the cause of Sino-UStrade imbalance can be partially attributed to the vertical specialization in East Asia,and what’s more，it reflects the East Asian region is heavily dependent on the U.S.market. China can undertake the "bitter skills " for industrial upgrading, and EastAsian countries provide a broader market and other ways to improve the status ofSino-US trade imbalance.