The Analysis On Intra-industry Trade Of Agricultural Products Between China And Australia

Since the l950s, intra-industry trade has developed very fast among different countries and it has gradually replaced inter-industry trade to become the main source of the international trade interests. Furthermore,it has been an important factor that influences the international division of labor ,and now it is reconstructing the developing pattern of world economy. Entering the 21st century, with the integration of the world economy, countries all around the world are getting closer and closer, All in all,international intra-industry trade has been one of the strongest engines of economic growth. With entry to the WTO in 2001, the trade contact and economic cooperation between China and other countries has become closer and closer. Therefore, the development of intra-industry trade on agricultural products is of great significance for our country to be a powerful nation in 21 century.Firstly, the paper expounds the development process and characteristics of agricultural trade between China and Australia. Secondly,the paper calculated the G-L intra-industry trade index,Brülhart marginal intra-industry trade index and Thom & McDowell marginal industry trade index for each type of agricultural products between china and Australia during the period from 1996 to 2009.The conclusion shows that the overall level of agricultural intra-industry trade between China and Australia is relatively low,and Brülhart index indicates that the growth of China's agricultural products are mainly from inter-industry trade, at the same time Thom & McDowell index shows that China's agricultural intra-industry trade growth is mainly from the growth of vertical intra-industry trade. Thirdly,this paper compared the competitive advantage of our country's agricultural products with Australia's. After the analysis of the change in competitive advantage by competitive advantage index, this paper draws a conclusion that China's agricultural products are at a competitive disadvantage on the whole. As to specific agricultural and aquatic products ,Australia has comparative advantage on lots of land-intensive agricultural products, while China has comparative advantage on just few kinds of agricultural products in labor-intensive. This article also applies co-integration analysis to study the long-term equilibrium among intra-industry trade,scale economy ,trade openness and Per capita income gap. The result indicates there are positive co-integration relationships between scale economy and intra-industry trade. However,there are negative co-integration relationships between per capita income gap and intra-industry trade. But the relationship between intra-industry trade and trade openness is less significant. Because the existence of technical Barriers to agricultural trade, trade openness doesn't really reflect the actual situation of agricultural trade between China and Australia. At last, based on the previous accounts, some suggestions are put forward to promote the intra-industry trade on agricultural products between China and Australia.