Research On Intra-product Trade Of Mechanical And Electrical Products Between China And The EU

Since the 1970s, driven by economic globalization and technological progress, international intra-product became the new main form of international division of labor. Since then, the intermediate goods trade represented by spare parts and semi-finished goods has become a new way to do international trade. From the traditional way called "trade for trade" to the new way named "trade for production", international trade has entered into new era. Under the new international division of labor, in terms of comparative advantages on capital and technology, developed countries specialized in the high value-added production chain, whereas developing countries that have cheap resources and labor specialized in the low value-added production chain.On the basis of intra-product trade's definition and the previous study literature review, this paper studies the intra-product trade of China-the EU and selects the mechanical and electrical products as an example, which occupies an important position in the China-the EU trade and reached a higher level in intra-product trade than other products. So this paper selects the intra-product trade of mechanical and electrical products as study object. For an in-depth analysis of intra-product trade of the mechanical and electrical products, firstly, this paper analyses the China-EU trade status, then it analyses the intra-product trade status of the mechanical and electrical products from three perspectives. They are the intra-product trade's relationship with our China's trade surplus with the EU, the share of intra-product trade in China-the EU's mechanical and electrical products trade and its effect to the latter; Secondly, this paper analyses the factors which influence the intra-product trade of mechanical and electrical products, such as economy structure, product life cycle, the activities of transnational corporations, trade barriers, geographical distance and the labor cost difference. These are the reasons which decide the form of distribution of interests status between China and the EU and lead to the intra-product trade of mechanical and electrical products between them; Thirdly, this paper uses the intra-product trade index, the level of competitiveness index (TC) and comparative advantage index (RCA) to evaluate the intra-product trade of mechanical and electrical products between China-the EU; At last, Based on the analysis before, this paper reaches the basic conclusion and put forward suggestions, such as taking part in the intra-product trade actively, nurturing the intermediate products market and changing the government's foreign trade policy.