IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

Policy effect on structural change: A case of Chinese intermediate goods trade

Listed author(s):
  • Huang, Yanghua
  • Salike, Nimesh
  • Zhong, Feiteng

We explain the dynamics of China's intra industry trade (IIT) development spanning over three decades from the perspective of institutional changes. We present two hypotheses after reviewing series of policy documents and related organizational adjustment descriptions. First, we argue that China's pro-liberal reform in trade and FDI institutions helped trade to take off. Second, China is ambitious in acquiring advanced technology and building up a sophisticated system to promote technological capability. An analysis of Grubel and Lloyd IIT index on intermediate goods trade belonging to SITC 7 and SITC 8- the key components of regional value chain in East Asia- suggests that the structural changes taking place in China's intermediate goods trade are in agreement with the stated hypotheses. China's institutional arrangements also help to explain the factor behind China's success in becoming a major player in the regional production network in East Asia.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/pii/S1043951X17300457
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal China Economic Review.

Volume (Year): 44 (2017)
Issue (Month): C ()
Pages: 30-47

as
in new window

Handle: RePEc:eee:chieco:v:44:y:2017:i:c:p:30-47
DOI: 10.1016/j.chieco.2017.03.005
Contact details of provider: Web page: http://www.elsevier.com/locate/chieco

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. Thorbecke, Willem & Salike, Nimesh, 2011. "Understanding Foreign Direct Investment in East Asia," ADBI Working Papers 290, Asian Development Bank Institute.
  2. Yang, Shanping & Martinez-Zarzoso, Inmaculada, 2014. "A panel data analysis of trade creation and trade diversion effects: The case of ASEAN–China Free Trade Area," China Economic Review, Elsevier, vol. 29(C), pages 138-151.
  3. Falvey, Rodney E., 1981. "Commercial policy and intra-industry trade," Journal of International Economics, Elsevier, vol. 11(4), pages 495-511, November.
  4. Markusen, James R. & Venables, Anthony J., 1999. "Foreign direct investment as a catalyst for industrial development," European Economic Review, Elsevier, vol. 43(2), pages 335-356, February.
  5. Kimura, Fukunari & Ando, Mitsuyo, 2005. "Two-dimensional fragmentation in East Asia: Conceptual framework and empirics," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 317-348.
  6. Fukunari Kimura & Kazunobu Hayakawa & Zheng Ji, 2008. "Does International Fragmentation Occur in Sectors Other Than Machinery? ," Asian Economic Journal, East Asian Economic Association, vol. 22(4), pages 343-358, December.
  7. Richard Baldwin & Toshihiro Okubo, 2014. "Networked FDI: Sales and Sourcing Patterns of Japanese Foreign Affiliates," The World Economy, Wiley Blackwell, vol. 37(8), pages 1051-1080, August.
  8. Fukao, Kyoji & Ishido, Hikari & Ito, Keiko, 2003. "Vertical intra-industry trade and foreign direct investment in East Asia," Journal of the Japanese and International Economies, Elsevier, vol. 17(4), pages 468-506, December.
  9. Athukorala, Prema-chandra & Yamashita, Nobuaki, 2006. "Production fragmentation and trade integration: East Asia in a global context," The North American Journal of Economics and Finance, Elsevier, vol. 17(3), pages 233-256, December.
  10. Grubel, Herbert G & Lloyd, P J, 1971. "The Empirical Measurement of Intra- Industry Trade," The Economic Record, The Economic Society of Australia, vol. 47(120), pages 494-517, December.
  11. K. C. Fung, 1998. "Accounting for Chinese Trade: Some National and Regional Considerations," NBER Chapters,in: Geography and Ownership as Bases for Economic Accounting, pages 173-204 National Bureau of Economic Research, Inc.
  12. Obashi, Ayako, 2010. "Stability of production networks in East Asia: Duration and survival of trade," Japan and the World Economy, Elsevier, vol. 22(1), pages 21-30, January.
  13. Kojima, Kiyoshi, 1973. "A Macroeconomic Approach to Foreign Direct Investment," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 14(1), pages 1-21, June.
  14. THORBECKE, Willem & Nimesh SALIKE, 2013. "Foreign Direct Investment in East Asia," Policy Discussion Papers 13003, Research Institute of Economy, Trade and Industry (RIETI).
  15. Dr. Mitsuyo ANDO & Dr. Fukunari Kimura, 2009. "Fragmentation in East Asia: Further Evidence," Working Papers DP-2009-20, Economic Research Institute for ASEAN and East Asia (ERIA).
  16. Dean, Judith M. & Lovely, Mary E. & Mora, Jesse, 2009. "Decomposing China-Japan-U.S. trade: Vertical specialization, ownership, and organizational form," Journal of Asian Economics, Elsevier, vol. 20(6), pages 596-610, November.
  17. Xing, Yuqing, 2007. "Foreign direct investment and China's bilateral intra-industry trade with Japan and the US," Journal of Asian Economics, Elsevier, vol. 18(4), pages 685-700, August.
  18. Sanjaya Lall, 2000. "The Technological Structure and Performance of Developing Country Manufactured Exports, 1985-98," Oxford Development Studies, Taylor & Francis Journals, vol. 28(3), pages 337-369.
  19. Chirathivat, Suthiphand, 2002. "ASEAN-China Free Trade Area: background, implications and future development," Journal of Asian Economics, Elsevier, vol. 13(5), pages 671-686.
  20. Prema-chandra Athukorala, 2005. "Product Fragmentation and Trade Patterns in East Asia," Asian Economic Papers, MIT Press, vol. 4(3), pages 1-27, Fall.
  21. Xiaoling Hu & Yue Ma, 1999. "International intra-industry trade of China," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 135(1), pages 82-101, March.
  22. Chenggang Xu, 2011. "The Fundamental Institutions of China's Reforms and Development," Journal of Economic Literature, American Economic Association, vol. 49(4), pages 1076-1151, December.
  23. Amiti, Mary, 1998. "Inter-industry trade in manufactures: Does country size matter?," Journal of International Economics, Elsevier, vol. 44(2), pages 231-255, April.
  24. Mary Amiti & Caroline Freund, 2010. "The Anatomy of China's Export Growth," NBER Chapters,in: China's Growing Role in World Trade, pages 35-56 National Bureau of Economic Research, Inc.
  25. Lemoine, Francoise & Unal-Kesenci, Deniz, 2004. "Assembly Trade and Technology Transfer: The Case of China," World Development, Elsevier, vol. 32(5), pages 829-850, May.
  26. Fardoust, Shahrokh & Lin, Justin Yifu & Luo, Xubei, 2012. "Demystifying China's fiscal stimulus," Policy Research Working Paper Series 6221, The World Bank.
  27. Ianchovichina, Elena, 2001. "Trade Liberalization in China’s Accession to WTO," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 16, pages 421-445.
  28. Fukunari KIMURA & Ayako OBASHI, 2010. "International Production Networks in Machinery Industries: Structure and Its Evolution," Working Papers DP-2010-09, Economic Research Institute for ASEAN and East Asia (ERIA).
  29. Aturupane, Chonira & Djankov, Simeon & Hoekman, Bernard, 1997. "Determinants of intra-industry trade between East and West Europe," Policy Research Working Paper Series 1850, The World Bank.
  30. Stéphane Becuwe & Claude Mathieu, 1992. "The determinants of intra-industry trade: The case of the automobile industry," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 128(1), pages 34-51, March.
  31. Prema-chandra Athukorala, 2009. "Production Networks and Trade Patterns:East Asia in a Global Context," Departmental Working Papers 2009-15, The Australian National University, Arndt-Corden Department of Economics.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:chieco:v:44:y:2017:i:c:p:30-47. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.