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Country‐specific factors and the pattern of intra‐industry trade in China's manufacturing
Author(s) -
Zhang Zhaoyong,
Chuan LI
Publication year - 2006
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.1288
Subject(s) - intra industry trade , china , product differentiation , economics , liberalization , international trade , international economics , economic integration , free trade , product (mathematics) , trade barrier , manufacturing , business , market economy , geography , geometry , mathematics , archaeology , marketing , welfare
Over the past few decades there have been extensive empirical and theoretical studies of the determination of intra‐industry trade (IIT), but mostly for the industrialized countries. This paper aims to assess the trends and pattern of intra‐industry trade and structural adjustment in China's manufacturing sector associated with its trade liberalization using data spanning from 1990 to 2000. In particular, we distinguish intra‐industry trade as either horizontally or vertically differentiated, and examine how the various country‐specific factors affect the intensity of China's horizontally and vertically differentiated intra‐industry trade with its major trading partners, and how trade liberalization changes the pattern of China's IIT and integration with the East Asian region. These issues have important policy implications for product differentiation strategy and labour adjustment. Copyright © 2006 John Wiley & Sons, Ltd.