Vertical Specialization and Trade Surplus in China


  • Wang Wei, Tianjin University of Commerce, China

The traditional flow of goods from primary production through to manufacturing and consumption has expanded across international borders conterminously with globalization. Vertical specialization (VS) in processing and manufacturing in China has driven export growth. In particular, intra-industry and intra-product trade between China, the US and East Asia has increased China’s trade surplus over the long term. Vertical Specialization and Trade Surplus in China aims to measure the level of VS in the Chinese manufacturing industry to provide a more accurate representation of China’s trade surplus, and gives empirical analysis on provinces and products with important VS activities in order to assess China’s trade value-added. Exploring the vertical division of labour, and foreign direct investment (FDI) driving China’s import and export imbalance, the book is divided into eight chapters, each covering an aspect of VS in China. The first chapter outlines the aims and method of the study. Chapter two covers VS trade pattern and trade surplus. Chapter three looks at FDI and the import and export imbalance, and chapter four covers the relationship between VS and import and export of foreign invested enterprises. The fifth chapter considers the causes and prospects for growth in China-US and China-Japan trade. Chapters six and seven give an empirical analysis of VS and trade surplus, and a breakdown of VS per industry in China’s provinces. Finally, chapter eight considers rebalancing imports and exports in China.
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Academics in social science and economics; Those interested in the dynamics of China's economy


Book information

  • Published: May 2013
  • Imprint: Chandos Publishing
  • ISBN: 978-0-85709-446-9

Table of Contents

Introduction: Trade surplus in China - vertical specialization and related issues; Vertical specialization trade patterns and China’s trade surplus; An analysis of the role of vertical specialization in the development of China’s trade surplus: Evidence from 2000-2007; Vertical specialization, FDI and China’s import-export imbalance; FDI and the processing trade in China: Based on vertical specialization; An empirical analysis of the relation between imports and exports of China’s foreign-invested enterprises based on vertical specialization; An empirical study of the relationship between the US FDI inflows and China-US bilateral trade imbalances: Based on vertical specialization; A cointegration analysis of the linkage between US exports to China and US imports from China based on vertical specialization; FDI, processing trade and China-Japan bilateral trade imbalance; An empirical analysis on transformation of China’s foreign trade development mode: Based on vertical specialization; Closing remarks: Rebalancing the Chinese trade.