A Study On The Intra-industry Trade And Influence Factors Of Manufacturing Industry Between China And India

Since 1978,while continuously deepening reforms and expanding opening up,China has taken advantage of its own resource advantages to seize the opportunities of developed countries' manufacture need to be shift urgently and the soaring demand of global market,which has led to the rapid rise of Chinese manufacturing.With the improvement of Chinese industrialization level,the industrial structure is also optimized and upgraded constantly,the scale of trade and the economic aggregate have grown rapidly,making China a veritable large trading country of the world.However,in recent years,with the resumption of Sino-U.S.trade disputes,the triggering of the U.S.-Europe trade war,the abolition of GSP treatment between the United States and India,the escalation of the U.S.-Russian strategic conflict,the economic sanctions between Japan and South Korea,and the escalating war of Middle East,etc.Frequent political conflicts,downward pressure on the global economy continues to increase,and global trade,investment,and production activities have gradually slowed down.As the world's largest economy,the United States is attacking everywhere,and the economic development of global economic powers is facing varying degrees of impact.Therefore,China is continuously strengthening its ties with developing countries,while constantly striving to maintain trade with developed countries.Especially with the orderly advancement of the Belt and Road Initiative,Chinese economic and political ties with the countries along the route have become closer,and trade has become more frequent.The Bangladesh-China-India-Burma Economic Corridor is one of the “six corridors” in the “Belt and Road” cooperation focus and spatial layout.India,as a developing country,is an important participant in the Bangladesh-China-India-Burma Economic Corridor and an important countries of Chinese economic cooperation.Therefore,the development of bilateral trade between China and India deserves attention.Manufacturing industry is the support of a country's national economy and the basis of a country's sustained economic growth.After the 2008 financial crisis,the recovery of world economic was sluggish.Major industrialized countries have successively proposed economic recovery plans,and the development of manufacturing has become a key point of various countries once again.With the rapid development of global industrialization,the competitive advantage of industrial manufactured products will rely more on specialized production capabilities such as technology and innovation.The development direction of China's manufacturing industry has gradually transitioned from "Made in China" to "China Intelligent Manufacturing".India is also unwilling to fall behind and has proposed a "Made in India" plan to improve industrial level,but Indian manufacturing is still in the initial stage of industrialization.As the global value chain enters a period of deep reconstruction,the international division of labor and trade model shift from interindustry to intra-industry gradually,and the industrial upgrading of countries face different opportunities and challenges.Based on the gradual deepening of the industrialization of China and India,especially the rapid increase of China's industrialization level,manufacturing has become the main industry of bilateral trade between China and India.However,the manufacturing industries development of China and India are in different stages,and the industrial structure and production level are not at the same level.China and India are both of the world's most populous countries and large economies,and the potential of bilateral trade is huge.Then,as two developing countries,will intra-industry trade occur between China and India? If so,what is the status of the level and type of intra-industry trade between the two countries? What is the future trend of development? And what will affect the development of intraindustry trade of manufacturing industry of the two countries? These issues are worthy of our in-depth study.Against this background,this article analyzes the bilateral trade structure between China and India first,and finds that the main products which China exports to India are manufactured products,and the main products are capital-intensive and technologyintensive products.India's exports to China are gradually shifting from primary products to manufactured products,and the main products are labor-intensive products.Secondly,this article analyzes the situation of China-India manufacturing industry from three levels of static,dynamic and trade types of intra-industry trade.It is found that the trade mode of manufactured products classified by raw materials is intraindustry trade,and the rest of the industry is Inter-industry trade mainly.By analysis and comparison,it is found that there are intra-industry trade in all the sub-sectors of SITC5,SITC6,SITC7,and SITC8,and the manufacturing industries between China and India are mainly low vertical intra-industry trade,and supplemented by the intraindustry trade of horizontal and high vertical industries.On this basis,this paper uses gravity models to conduct the empirical research on the influence of intra-industry trade between China and India in the manufacturing industry.The results show that India's direct investment in China,trade openness and the expenditures of research and development have positive roles in promoting intra-industry trade in the manufacturing industries of the two countries.The institutional distance has a suppressing effect on intra-industry trade in the manufacturing industries of the two countries.The impact of the differences in per capita income between the two countries on China-India manufacturing intra-industry trade is not significant.At the end of this article,based on the actual economic conditions and industrial development of the two countries,three suggestions are proposed to promote the development of intra-industry trade between Chinese and Indian manufacturing industries,that is,optimizing the industrial structure and embedding it in the mid-to-high end of the global value chain;expanding the degree of opening up and increasing investment in India;promoting institutional construction and reducing the trade barriers.