Empirical Research Of Trade Spillover Effects Between China And Japan

In recent years, with high-speed development of economy and marketization, theeconomic trade between China and Japan has become more and more close. Before1990s, the economic trade between China and Japan was quite uneven since Japan’sexports to China were mainly high value-added, capital intensive products whileChina’s exports to Japan were concentrated on the low value-added raw materials andlabor-intensive goods. China’s unilateral dependence on Japan is much higher.However, after1990s, especially after joining WTO, with the high-speed developmentboth in economic and technology, China find a more balance relationship with Japanin economic trade.Firstly, through analysis about trade scale, trade structure and some other stuffs,we found that China and Japan shared an expanding scale of trade. What’s more,China owned a lower proportion of trade with Japan out of trade with the world, whilethe proportion in Japan was higher. Secondly, we tried to give a detail explanationabout the theories of multiplier effect and spillover effect by reviewing some relatedarticles and models.The empirical modeling research in this article is based on Miller-Round model.According to the data base of year2000and2007’s input-output tables between Chinaand Japan, we calculated the multiplier effect and the spillover effect about theinternational trade between the two countries. Overall, Japan depends more on Chinain the first industry while China relies more on Japan in the second and thirdindustries. Looking from the subdivision industry, Japan owns higher spillover effectin food manufacturing, fiber clothing industry, civil electronic equipment,communication equipment and other manufacturing industries while in otherindustries like precision instrument manufacturing, semiconductor, integrated circuitetc. China shows higher spillover effect. From which we can see that China getsimprovement in both economics and technologies recently but still shows verticalsystem in the trade structure. Accordingly, we think China need to improve itsindustry structure as well as trade structure through the introduction of high and newtechnology. Supporting the development of related industries to a more reasonableindustrial layout is also very important.