Difference Analysis Of The Impact Of The Intra-products Trade And General Trade On Income Distribution In China

From the seventies of last century, economic globalization and technological process greatly promote the generation and development of trade globalization. The main performance of trade globalization is international industrial transfer and foreign direct investment. The development of international industrial transfer makes intra-product specialization as one of the important forms of international specialization, so intra-product trade becomes important forms of international trade. As promotion of intra-product trade, developing and developed country specialize in different parts of production and trade chain, of which developing country mainly participated in the form of processing trade. With the development of intra-product trade, the wage gap expansion between different sorts of labor in all kinds of countries is intensified, which effects income allocation. Taking the method of theoretical and empirical research, we study the effects of processing trade which stands for intra-product trade on income distribution in China.In order to study effects of intra-product trade on income distribution, the paper consists of several parts below to research. In the first section, we review the foreign and domestic studies on trade influencing income distribution and sort these papers on theoretical and empirical parts, hoping that we can make a larger reputation in this field. In the second section, we analyze carefully the method of measurement and condition of intra-product trade, general trade and income distribution in China. Based on31years data from1981to2011, we find intra-product trade and general trade in China increase rapidly and amount of trade is very large. Comparing to general trade, the amount of intra-product trade changed in wave form, which is firstly smaller and then more and then smaller than general trade. We come to a conclusion that the gap of income distribution is widening by analyzing condition of income and comparing that in absolute level and relative level. In the third section, we take theory of Feenstra and Hanson (2001) which research the relationship of intra-industry trade in developed country and income distribution as basis, and then we improve their model to make a thorough inquiry of the effects in developing country. In the fourth section, we makes empirical analysis of effects of intra-product trade and general trade on income allocation in China respectively based on31years data from1981to2011using co-integrating analysis methods. The study indicates that intra-product trade represented by processing trade can enlarge income gap between skilled labors and unskilled labors. While general trade reduces this effect which is greater than the expansion of the role of processing trade to the wage gap.According to theoretical and empirical research, we should take trade policy which emphasis on general trade and adjust intra-product trade on the aspect of industrial structure to reduce the negative effect on the income gap. We put forward four proposals to reduce the income gap:to establish comparative advantage of our country; to improve the domestic procurement level; to enhance the level of human capital; to accelerate transformation of intra-product trade; to introduce high-quality Investment.