An Empirical Study Of Trade Relations For Mechanical And Electrical Products Of China, Japan And South Korea

Since1999, China, Japan and South Korea have been start within the frameworkof10+3cooperation, the economic and political cooperation have becomeincreasingly closed. This kind of cooperation also has made outstanding contributionto the economic development in East Asia. Trade in mechanical and electricalproducts is the most important component of the trade of the three countries. On theone hand, trade in this kind of products constitutes the main driving force of tradepatterns of the there countries, on the other hand, it is also a concentrated expressionof the industrialization process for the three countries. In this paper, conduct acomprehensive, systematic and objective analysis of the trade relation for mechanicaland electrical products of the three countries based on two perspectives and detailedbreakdown of this kind of products. Then propose solutions to advanced developmentof China’s trade in mechanical and electrical products.Firstly, in the theoretical aspects, the first part is the theory-based induction ofcompetitive and complementary trade relations of mechanical and electrical productsof the three countries, including the theory of comparative advantage, theory ofcompetitive advantage, as well as the arguments between the two trade strategies.The second part is the theory of intra-industry trade exposition, including theory ofeconomies of scale and intra-industry trade, differentiated products and intra-industrytrade, international direct investment and intra-industry trade and the theory ofinternational trade policy and intra-industry trade.Secondly, in empirical testing, the first part is the analysis of relation ofmechanical and electrical products of China, Japan, and South Korea from theperspective of the world market, and study the competitive and complementaryrelations of mechanical and electrical products based on TC, RCA, ESI and TCI.Concluded that China’s export of this kind of products has rapid development and hascompetition or complementary relationship in different categories with Japan andSouth Korea. The second is the examination of trade relation on mechanical andelectrical products between China-Japanese and China-South Korea based intra-industry trade perspective. Found that the competitiveness of Chinese mechanical and electrical products in relation to that of Japan and South Korea is still weak. However, the competitiveness of electronic and communications equipment manufacturing has shown strong momentum with Japan and South Korea. In order to further analyze the situation of such intra-industry trade, study the intra-industry trade based on the perspectives of intermediate products and final products. Conclusions show that China mainly imports intermediate goods from Japan and South Korea and exports the final product. Labor force participation in order processing, assembly, make the lower end of the status of international division has not been fundamentally improved. Subsequently obtain the economic factors affecting trades on mechanical and electrical products between China-Japanese and China-South Korea through the econometric models.Finally, in summing up trade relations of the above proposed mechanical and electrical products, propose the strategy for China’s development for the trade of mechanical and electrical products, and the countermeasures for expansion export of mechanical and electrical products to Japan and South Korea.