The Role And Effect China Plays In The Vertical Specialization Of East Asia

Since the1990s, the vertical specialization got all-round development, and itdeveloped especially rapidly in East Asia. This brought unprecedented trade interestsfor East Asia. Since the opening reform was implemented, China’s continuouslyexpanding foreign trade occupies an important place in the intra-regional trade in EastAsia. China’s position in the vertical specialization division in East Asia decidedwhether it can achieve greater economic benefits in East Asia and even theinternational market, so devoting to the study of the theory of the verticalspecialization is necessary.This paper firstly states the concept of vertical specialization, motivation,measure, and the economic effects by the literature review. Secondly, the developmentof vertical specialization division of labor in East Asia is studied, and the paperpointed out the "flying geese model" of East Asia regional division of labor isgradually replaced by vertical specialization to East Asia.The traditional model inwhich Japan acts as the leading goose gets collapsed. Thirdly, analyses the generalcooperation situation between China and the East Asian countries or areas in verticalspecialization. Besides, manufacturing vertical specialization index was calculated.The results showed that higher vertical specialization in the industry in East Asia mostoccur in capital and technology intensive industries.Then, through analysis the role and impact which China plays in the verticalspecialization of East Asia by the parts and components trade view. And compareexport proportion of China, South Korea and Japan which are mainly countries in EastAsia. and analyzes the industrial connection among east Asian countries. It isconcluded that China’s is end of the production base of export products, and becomes the center of the new "triangular trade", and the it is an important driving force ineconomic growth of East Asia. At the end of the paper, we point out some policysuggestions after reflecting on the division of China’s current status. The author thinksthat vertical specialization division of labor in East Asia helps optimize the exportstructure of China, and also brings the technology spillover in China. But the divisionof labor on the basis of the labor-intensive status failed to change thoroughly. Chinaneeds to change the extensive growth mode to intensive growth model, and constantlystrengthen the independent innovation, improve the technology absorbing ability. Andactively promote East Asian regional economic integration and participate in theglobal division of labor.