The Research On Intra-industry Trade Of China-ASEAN: Development, Influence Factors And Countermeasures

In the process of economic globalization and regional integration, the scale ofinternational trade is expanding continuously and the form of trade has alsogenerated new changes. The intra-industry trade (IIT) is becoming more frequent,which is a trade form that the similar products are exported and imported at the sametime between countries. This also contributes to the study of the theory of IIT. Atpresent, the IIT has occupied more than half of the volume of the world’s total tradeand the IIT theory has become an emerging theory of international trade. As afriendly neighbor of China and ASEAN countries, they have the similar culture andclose contacts. In particular, after the two countries signed China-ASEANComprehensive Economic Cooperation Framework Agreement in2002whichagreed to establish a free trade zone, the scale of bilateral trade further expands andthe share of IIT have been greatly improved. At the present time, the two sides havebecome very important trading partner. China and ASEAN countries have the similarfactor endowments and the similar level of economic development, but the mutualexport product substitution is strong, so there is more fierce competition in theinternational market between the two countries. However, the development ofbilateral IIT can be effective in reducing the bilateral trade friction, expanding thebilateral trade and accelerating the industrial upgrading.Firstly, this paper makes a brief introduction about the IIT theory andmeasurement methods, which gives a brief description of the overall trade situationbetween China and ASEAN and uses the adjusted GL index to make the empiricalanalysis of the IIT from the two aspects of the country and industry between Chinaand ASEAN. It concludes that the inter-industry trade is still the main trade betweenChina and ASEAN, and the level of IIT is lower. However, the IIT have become themain trade with Singapore and other countries and the level of IIT is higher in mostof the manufactured goods industry. Secondly, this paper analyzes the important factors that may influence thedevelopment of IIT between China and ASEAN and China and tests it by leading theimport panel data of the China and ASEAN countries to the gravity model. Theresults show that GDP, Countries of Opening Up, the bilateral direct investment andthe members of WTO can effectively promote the development of bilateral IIT.However, the geographic distance between the trading parties hinders thedevelopment of bilateral IIT.At last, this paper based on the empirical research results proposes that bothcountries should correctly recognize the importance of the development of IIT tradeand actively promote the development of IIT. They should take different tradecooperation mode to different countries, encourage mutual direct investment, furtherpromote bilateral IIT development, increase cooperation in logistics, reduce the costof IIT in order to come out with the policies and recommendations which canpromote development.