Research On Intra-industry Trade Between China And ASEAN

With the rapid increase of mutual trade between China and ASEAN, both parties'trade structure has been changed notably. The both parties shift from inter-industry trade to intra-industry trade. In this paper, by using GL index which suggested by Grubel and Loyd in 1975, the paper analyze the overall intra-industry between China and ASEAN, intra-industry structure, intra-industry of main goods and intra-industry level between China and ASEAN members. The analysis results indicate that the overall intra-industry level appears upward trend. In 90s of 20th century, intra-industry trade between the both parties increased notably, while in 21th century the intra-industry trade display undulation. With the increase of the manufactured goods'proportion, the intra-industry index of manufactured goods will be increase accordingly. On the basis of the analysis this paper expounds main factors which stimulate intra-industry trade between China and ASEAN, including: the increasing returns to scale in industry, international work division in East Asia, foreign direct investment, the increase of per capita GDP of each economy, and the development of CAFTA. Constraining factors in the development intra-industry trade between China and ASEAN are analyzed in section 4. Finally, this paper gives some suggestions on the industry policy and corporation strategy to stimulating the development of intra-industry trade between China and ASEAN.