| With the deepening of economic globalization, obstacles in global trade and investment have reduced and been eliminated in some aspects. A giant market involving numbers of countries and areas has emerged. Verified ways of division and cooperation are witnessed. Ever since the50s and60s in last century, division of labor within a product, with its fast developing pace, has become an important way between economies. Based on different factor endowments, economies enjoy their own comparative advantages. This new arrangement enables countries to take part in specific aspect of production. In the original pattern where a country undertook the whole task of production has been broken out. Besides, based on intra-product specialization, trade in intermediate goods has been prosperous.Since the90s in, Eastern Asian has been getting great attention world-wide because of the rapid development of intra-product division, featured by big trade in parts and components from machinery industry. China involves herself into the production network mainly by ways of processing trade, providing a platform for assembling and export, which constitutes a new triangle trading pattern within the area. After mid-90s, mechanical and electrical products exceeded traditional merchandise like texture and footwear to become an engine promoting increase of exports. To a great degree, this has benefited from frequent trade in parts and components with partners from East Asia. In this means, division of labor within product in this area influences composition of export from China.This paper starts with analysis of reasons for intra-product specialization based on factor endowment, comparative advantages and scale economy. Results show that traditional theories still apply. Comparative advantages coming from factor endowment lay a solid basis for the intra-product specialization, and economy of scale strengthens the new pattern. Moreover, specialization within a product can promote growth of economy, bringing with it effects of welfare distribution and industries transfer between countries and areas. By simulating, competing, industry association, staff training and turnover, participating members acquire accumulation in technological capability. Dynamic changes in factors will have impacts in composition of export when combined with natural resources, labor advantages and import replacement policies, thus propel the increase of value-added of technology.This paper continues to study the driving elements for emerging and development of intra-product specialization in East Asia and also China’s degree of involvement into it by analyzing intermediate goods trading, import and export in machinery industry. Also in this part, the paper summarizes status of China in East Asia producing network. Finally in this chapter, composition of export from China is studied when depicting export in mechanical and electrical products, calculating value-added of technology and also classifying trading goods using method figured out by Lall (2000). Meanwhile, distribution graphs based on value-added of technology are utilized to make comparison of export structure between China and Japan, Rep. of Korea, Singapore, Hong Kong SAR, Philippines, Malaysia, Thailand and Indonesia. With all the work, this paper makes use of methods of balanced panel data analysis, building a model to study impacts of intra-product specialization in East Asia has on China’s changes in export structure from1999-2010. The conclusion reveals that based on valued-added of technology, trade structure has been improving as a whole, but still lags behind world average level though the difference has narrowed compared with the first few years in21st century. However, the gap widens a bit in recent years from2007. Besides, high-tech products contribute more to the increase of export than low-tech ones, but China still focuses on labor-intensive process. Another, low-tech and resource-based manufactured goods account for less in value as time goes on. What’s more, China falls behind Japan and the Republic of Korea in terms of technology level in export, and positions herself similar with Singapore and Hong Kong, while enjoys higher capabilities compared with Thailand, Philippines, Indonesia and Malaysia. Moreover, intra-product specialization can improve export structure, the more China imports intermediate goods, the better it would be. However, export in intermediate goods fails to show its influence. The impact is greater than export within East Asia economies. Meanwhile, neither developed economics nor less-developed economies show significant improving effects on China’s export structure, but the area’s positive influence remains as a whole. According to the conclusion, this paper suggests that China invests more in R&D, strengthens the ability to absorb technologies coming from outside and makes re-produce, directs processing trade heading for higher technological level, facilitates optimization of export structure, and creates favorable environment for FDI so as to participate more in intra-product specialization and maintain sustainable economic development. |
