The Study Of Intra-industry Trade Between China And Japan

Since the 1960s, there has been a revolution in the international trade theory. The trade theory of imperfect competition represented by intra-industry trade theory becomes the frontiers that the international trade studies after World Warâ…¡, and it is also one of the research fields combining industrial organization theory with international trade theory. It leads to a breakthrough for all countries to embark on a new round of economic growth in a new manner. Therefore they can obtain more dynamic trade interest out of conventional theory. For a long time, most of previous researches focus on developed countries, and the development of intra-industry trade in developing countries was overlooked, especially for the intra-industry trade between countries of different economic development level. China and Japan belong to the developing country and developed country from economic development degree. Bilateral trade volume between China and Japan always keeps increasing, and with the development of the economy, intra-industry not only has been an important component of the trade between China and Japan, but also has great influence on them.This paper is based on the intra-industry trade theory, it uses Grubel-Lloyd index to analyze the development of bilateral intra-industry trade between China and Japan. The result of general research shows the level of intra-industry trade between China and Japan has been increasing on the whole .And by the end of 2006, the GL index between China and Japan had reached 0.502. This figure indicates the trait of the bilateral trade mode, namely, the share of intra-industry trade has exceeded that of inter-industry trade, the frontier would be playing the leading role. On the foundation, it analyzes thoroughly from three angles such as industry degree, trade structure, and trade competition, and comes to the conclusion that the vertical intra-industry trade is playing the leading role.On the basis of knowing the situation of intra-industry trade between China and Japan, it sets up four estimated equation choosing four independent variables in the positive analysis of identifying determinants of intra-industry trade between china and Japan. It analyzes the influence of each variable using the E-G analysis and Granger causal relationship. Then, it analyzes that the intra-industry trade will bring the positive and negative effect to Chinese economy, on one hand, it will bring the positive effect to Chinese economy, on the other hand, it will bring the negative effect to Chinese economy considering to the problem of the trade between China and Japan, the problem of Chinese industry. Finally, this paper brings forward the countermeasure suggestion about the intra-industry trade between China and Japan from two angles of government and enterprise.