The Research Of Manufactured Goods’ Trade Within Industry Between China And East Asia’s Major Trading Partners

East Asia is the fastest growing region in the world trade development, and its volume of trade within the region is more than NAFTA, just after the European Union. Scholars have pointed out that the rapid growth of intra-industry trade within the East Asian region is the most important reason for the growth of trade in East Asia. Recent years, the volume of trade between China and the major partners in East Asia is growing. In particular, the trade in manufactured goods accounted for more than85%of the total trade.This research used SITC Five Points Method and unitized GL index to analyze the development of trade in manufactured goods between China and East Asia’s major trading partners within the industry. China, Japan and ASEAN’s trade of manufactured goods are mainly based on a vertical trade within industry, and the proportion of horizontal intra-industry trade is smaller about less than20%. In the trade of manufactured goods industry in China and South Korea, although they overall based on the vertical intra-industry trade, the percentage of horizontal intra-industry trade is higher. In2005and2006, they even more exceeded the vertical industry trade.This research also computed China, Japan, Korea and ASEAN SITC5-8major categories of manufactured goods industry trade. Among these data, SITC7of intra-industry trade index is generally higher. SITC7behaves the machinery and transport equipment industries, and it is much easier to form the international division of labor, production and assembly of the modular development, and is also in favor of the vertical intra-industry trade development. This is consisting with the previous analysis. In order to deepen the analysis, this research used LALL(2001) for the classification of products and selected3represented products which were low technology products-textile apparel products, middle technology products which were low technology products-textile apparel products, middle technology products-construction machinery products and high technology products-Electronic power equipment. This paper used SITC five point’s data and GHM method, and separately studied the percent of high-quality vertical intra-industry trade, low-quality vertical intra-industry trade and horizontal intra-industry trade in China, Japan and ASEAN. The results indicate that China doesn’t have capital and technology advantages in these three categories’ trade.At last, this research separately built the econometric model for the influencing factors of horizontal intra-industry trade and vertical intra-industry trade. And in the paper, it used STATA to analyze the panel data:the gap between per capital GDP and the GDP gap for horizontal intra-industry trade have a significant negative impact, but a positive impact to vertical intra-industry; Scale Economics have a significant negative effect on the horizontal intra-industry but a positive effect on the vertical intra-industry trade; the proportion for foreign investment in China of Korea, Japan and ASEAN’s direct investment have a negative effect on horizontal intra-industry trade but a significant effect on vertical intra-industry trade.