A Study On The Factors Influencing The Intra-industry Trade Of China And ASEAN Countries

The wave of globalization is not only pushing the economic growth of countries all over the world but also enhancing the trade relationship among them. East and South Asian countries, represented by China and ASEAN, have been benefiting a lot from it. This paper tries to study the intra industry trade between China and ASEAN from a macro perspective. Taking data of, provided by UN Comtrade in the standard of SITC V3, China and ASEAN6 countries (Indonesia, Malaysia, Singapore, Philippine, Thailand and Vietnam), the result shows that the trade pattern between them transfers swiftly from ’China importing raw material and exporting finished products to ASEAN’to China and ASEAN importing and exporting mainly section 7 products. HIIT and VIIT index based on GHM method shows that VIIT is relatively stable than HIIT, with both of them rising fast. It shows, to some extent, that the IIT between China and ASEAN is improving.Based on the characteristic of this paper, we focused on the macro characteristics’ impacts on IIT. These characteristic includes size, development status, income gap, factor endowment difference, and shocks from big economic events. Result shows that factors above will cause different impacts in terms of degree and direction. Although generally, most regression results of coefficients are consistent with theoretical expectations, some inconsistencies can be used for further study, considering the position of China and ASEAN6 in the East Asia Production Network.Lastly, this paper gave propositions of increasing average national income to enhance trade and industry structure, increasing the comparative advantage of capital and science and technology, and strengthening the trade and international industry production cooperation to promote bilateral trade between China and ASEAN countries.