Research On The Effect Of Intra-product Trade To Industrial Structure Adjustment

With the development of science and technology and improvement of trade liberalization, the procession of economic globalization accelerate, the international labor division is more and more deeply. Product trade develops from inter-industry trade to intra-industry trade, then further to intra-product trade, breaking the traditional labor division. The development of intra-product trade not only promotes China’s economic growth but also improves industrial structure.This paper is built a more complete analytical framework for intra-product trade theory thought adding some preconditions on the Ricardian model, the H-O theory and economies of scale theory. Intra-product trade theory is the deepening in the production process level of comparative advantage, factor endowments theory and economies of scale theory. Intra-product trade will produce technology spillovers, human capital effect and resource allocation effect in production, employment and international labor division, thus there is a significant role in promoting industrial structure adjustment.Processing trade is the main form of intra-product trade in China. The development of processing trade to improve the structure of export commodities, and promote China’s industrial upgrading. China has processed intermediate products, which mainly imports from Asian countries and regions, then exports to the United States, European Union and other developed countries. China still engaged in low value-added processing operations. During the development of intra-product trade, China’s three industry structure has become more reasonable, at the same time, the internal structure of each industry has undergone profound changes. China’s current industrial structure still has a wide gap with the developed country, need to be further optimized and adjusted.This paper calculated the intra-product trade index and the index of changes in industrial structure, then established time series econometric model. The empirical results show that the index of changes in industrial structure growing as time goes by and the intra-product trade index improves, China’s industrial structure has gradually optimized and upgraded. As China is still in the low value-added part of the international labor division, not only has limit China’s economic development, but also becomes barriers in promoting industrial upgrading. China urgently need improve the disadvantaged position in the international labor division and obtain comparative advantage in a greater range. According to the results of theoretical and empirical analysis, this paper proposes policy suggestions on intra-product trade promoting industrial structure adjustment from the macroeconomic level and microeconomic level.