Intra-industry Trade

With the development of the world economy, the traditional inter-industry trade theory can’t explain a new trade mode, a country both import and export the same products.In this context, the infra-industry trade theory began to rise and has been widely concerned, in today’s world of rapid technological progress and the deepening of international division, not only effectively improve the international production and the development of exchange, at the same time, also led to the change of world trade pattern, namely inter-industry trade to intra-industry trade, this is a big trend.China and USA, as.the largest developing country and the biggest developed country, industrial manufactured goods, especially the mechanical and electrical products, intra-industry trade has become more and more popular, and the bilateral trade volume is also growing. According to the "standard international trade classification" industry classification standard, according to the Chinese customs and the United States Bureau of statistics data, especially in2004, the two biggest commodities are SITC7products, mechanical and electrical products. Compared with the traditional inter-industry trade, intra-industry trade have new features, we need to do more research on it.This paper adopts the method of combination of theoretical research and empirical analysis, firstly introduces the background, purpose and significance of the research and give summary to the relevant mechanical and electrical product intra-industry trade research literature,and then introduces the method of measurement of intra-industry trade, including G-L index, modified G-L index, Aquino index, Balasa index and the Bergstrand index, make a comparison, points out the advantages and disadvantages of each index, and finally use the G-L index to explain the characteristics of mechanical and electrical industry of Sino-US trade, and then use the GHM method to determine the type of mechanical and electrical industry of Sino-US trade. At the end of the study, analysis of the factors of trade between China and the United States of mechanical and electrical products, because different types of the trade, influence factors of intra-industry trade is also different, at the same time, taking into account these factors in different levels, it can be divided into national level and industry level, the national level relates to a country’s economic development, including per capita income, factor endowment, international direct investment, economic development level, industrial level factors include economy of scale, market structure, market degree. According to the characteristics of mechanical and electrical industry of Sino-US trade, as well as the availability of data, in the empirical research, difference of per capita income, American direct investment in China, the level of opening to the outside world, Chinese Electromechanical industry scale and Chinese investment in scientific research as influencing factors, make relevant assumptions according to the theory and experience, use multiple regression measurement method of measuring the impact of these factors on the development of mechanical and electrical industry of Sino-US trade influence. We found that the degree of openness, American direct investment in China and Chinese technology progress is positive correlation with the Sino-US intra-industry trade level, and the industry scale of China’s electromechanical industry trade is negatively related. According to the theory and empirical research results, verify the hypothesis and puts forward relevant policy and suggestion,to promote the development of Sino-US intra-industry trade.