The Empirical Study On China-US Intra-industrial Trade Development

Intra-industry trade has massively emerged since the end of World War II, and it has gradually turned to be a new pattern of international trade in line with trade development. Recently trade research has concentrated on intra-industry trade issues. This is not only because the development of intra-industry trade increasingly wide spreads in developed countries, but also in developing countries with regard to its increasing significance.China and the United States, as the largest developing country and the most developed countries separately in Asia-Pacific region, their bilateral trade is not only the engine for their economic growth, but also a significant impact on the world economy. In China-US trade, it should not be ignored that the inter-industry competition pattern defined in resource endowment enshrined by the comparative advantage theory. In addition, close attentions should be paid to the expansion of intra-industry trade which will be the main trend to enhance international trade. This study is to dedicate to the in-depth understanding of trade policy adjustment and necessary support from Empirical study for the governments.This thesis, using the United Nations database on trade, the Chinese Customs Statistics Yearbooks and the United States Bureau of Statistics published data, empirically analyses intra-industry trade of China-US with Grubel-Lloyd indicators and Greenaway index. Through the analysis of multiple perspectives, the characteristics and development trends of China-US intra-industry trade are summarized, subsequently reflecting the tendency of China-US intra-industry trade from the empirical perspective. This thesis concludes through empirical analysis mainly as follows: China-US intra-industry trade index is generally low, inter-industry trade is the basic pattern of the bilateral trade. The manufactured products mainly back up the intra-industry trade in term of industry structure. In view of the trade patterns, the main features are vertical intra-industry trade instead of the horizontal intra-industry trade, resulting from the differentiation in price and quality. The latter stands for the leading category in intra-industry trade. And the trend has been strengthened in recent years. Within the factors which impact the China-US intra-industry trade index, the rapid development of processing trade aroused from foreign direct investment plays a key role. Finally based on the above conclusions, it seeks to upgrade trade development patterns and reinforce trade competitiveness primarily from the perspectives of government, industries and enterprises.This thesis newly built up a factor model of bilateral intra-industry trade in light of empirical study and conducts an innovative analysis on the dynamic trend of China-US intra-industry trade based on the above approach.