Assessment And Countermeasures Study On The Real Benefit Of China’s Foreign Trade From Perspective Of Intra-product Specialization

With developing technology and deepening globalization, production has taken more and more globalization characters. International division of labor has step into the level of intra-production specialization. More and more developing countries have played roles in this new system, which was used to be donated by developed countries and newly industrialized countries, with their expanding economy and comparative advantages, which brings chances for all players.As the second largest trading nation and the largest developing country, China grows fast in the world trading system. Taking the labor and regional advantages, China started with processing trade, and taken a serial of policies such as tariff reduction and exemption, exports rebates and establishing export processing zone. Its trading size grows fast and it is playing a more and more important part in the new trading system. China’s processing trade has increased from$13.2billion in1995to$134.4billion in2012. Apparently, the processing trade has become an important way for China to participate in the new international division of labor. At the same time, China has also adopted a series of tax breaks and preferential policies to attract foreign direct investment. A growing number of multinationals companies of developed and newly industrialized countries come into China. China participates more in international division of labor by being integrated into the global production network. This paper estimated and analyzed the level and status of china’s participation in the international division of labor by using qualitative analysis and empirical analysis.First of all, this paper elaborated the general stage, current level of China’s participation in the division of labor, and the development of China’s processing trade. Then, it calculated China’s overall vertical specialization index (VSS) and the vertical specialization of sub-sectors index on the basis of world input-output table (WIOT) from the European Commission, in the reference of methods of Hummels (2001). Finally, using the calculation formula of net added value defined by Hongyi Chen(2002), this paper calculated domestic and foreign value in China’s export and the values from different regions and countries in the export value. According to the above analysis, the division status of our intra-product has been elaborated. In the end, this paper put forward some policy suggestions for our country to integrate into the international intra-product specializationThe innovation of this paper is mainly reflected as followed:First is the new perspective; This paper compared China’s vertical specialization ratio of general and sub-sectors in every stage of product division by detailed analysis of trade data. Therefore, China’s position in the international division of labor has been assessed reasonable. Second, using the word input-output table (WIOT) which was recently published by European Commission, this paper analyzed the proportion of domestic and international value and the trend of different countries since1995to2009from a dynamic perspective.But since the data of the input-output table is just updated to2009, the research of China’s participation in the vertical specialization only covered the period of1995to2009. From this point of view, the study is insufficient in timeliness. And the main shortcoming is the missing of empirical analysis.