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Vertical Intra-Industry Trade Between China and OECD Countries

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  • Lisbeth Hellvin
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    Abstract

    This paper examines the issue of intra-industry trade in a transition economy. We address the question of whether the market-opening reforms in China have resulted in an increasing exchange of similar products, or whether foreign trade is still playing the role of filling the gap of products not produced within the country. We find that the proportion of intra-industry trade in China-OECD trade has increased from 12 per cent of total manufacturing trade in 1980 to over 20 per cent in 1992. The highest shares of intra-industry trade with China are reported for Japan and the United Kingdom. Due to the large differences between China and the OECD countries in terms of factor endowments, we expect intra-industry trade to be of the vertical nature, i.e., two-way trade in varieties of a product characterised by different qualities. Empirical evidence indeed shows that the majority of the intra-industry trade between China and the OECD is of the vertical nature; China exports lower quality ... Ce document traite des échanges au sein d’une même branche industrielle dans une économie en transition : les réformes d’ouverture sur le marché en Chine ontelles stimulé les échanges de produits équivalents ou bien ont-elles permis d’importer des biens non produits dans le pays ? Les résultats montrent que le commerce intrabranche entre la Chine et les pays de l’OCDE est passé de 12 pour cent des échanges totaux de produits manufacturés en 1980 à plus de 20 pour cent en 1992, le Japon et le Royaume Uni en assurant la plus grande part. Du fait des grandes différences en termes de dotation en facteurs entre la Chine et les pays de l’OCDE, on peut faire l’hypothèse d’une structure verticale du commerce intra-branche, c’est-à-dire d’importations et exportations simultanées d’un même produit mais de qualité différente. De fait, l’observation empirique montre que la Chine exporte principalement des produits de basse qualité en échange de produits de plus grande qualité en provenance des ...

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    File URL: http://dx.doi.org/10.1787/710353233307
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    Bibliographic Info

    Paper provided by OECD Publishing in its series OECD Development Centre Working Papers with number 114.

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    Date of creation: Jul 1996
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    Handle: RePEc:oec:devaaa:114-en

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    Cited by:
    1. Jianhong Zhang & Arjen van Witteloostuijn & Chaohong Zhou, 2005. "Chinese Bilateral Intra-Industry Trade: A Panel Data Study for 50 Countries in the 1992–2001 Period," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 141(3), pages 510-540, October.
    2. Rosanna Pittiglio & Filippo Reganati, 2012. "Vertical intra-industry trade in higher and lower quality: a new approach of measuring country-specific determinants," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, Inderscience Enterprises Ltd, vol. 4(1/2), pages 44-62.
    3. Xing, Yuqing, 2007. "Foreign direct investment and China's bilateral intra-industry trade with Japan and the US," Journal of Asian Economics, Elsevier, Elsevier, vol. 18(4), pages 685-700, August.
    4. Sayeeda Bano, 2002. "Intra-Industry Trade and Trade Intensities: Evidence from New Zealand," Working Papers in Economics, University of Waikato, Department of Economics 02/05, University of Waikato, Department of Economics.

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