Vertical Specialization and Trade Surplus in China

1st Edition

Authors: Wang Wei
Print ISBN: 9780857094469
eBook ISBN: 9780857094476
Imprint: Chandos Publishing
Published Date: 9th May 2013
Page Count: 204
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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.

Key Features

  • Measures VS across China including the developed provinces based on the newest input-output table
  • Presents the main provinces and products closely related to VS
  • Gives evidence on global VS trade patterns from China’s national data


Academics in social science and economics; Those interested in the dynamics of China's economy

Table of Contents

List of figures and tables

List of abbreviations


About the author

Chapter 1: Introduction: Trade surplus in China – vertical specialization and related issues


The starting point: China’s vertical specialization trade

Trade surpluses are as much a source of conflict as strength

Analyzing the impact of vertical specialization on China’s trade surplus

Chapter 2: Vertical specialization trade patterns and China’s trade surplus


China’s trade: more and more centered on trade surplus

Vertical divisions of labor driving China trade

China’s trade is still dependent on western markets for final goods exports

Three optimized trade development zones: regional foreign trade disparity in China

Chapter 3: An analysis of the role of vertical specialization in the development of China’s trade surplus: evidence from 2000–2007



Import and export of commodities: structure and trade pattern transition in China

What role for vertical specialization trade in China’s trade surplus?


Chapter 4: Vertical specialization, FDI and China’s import–export imbalance



China’s acceleration into vertical specialization due to FDI

Empirical evidence of the relationship between FDI and international trade in China based on VS


Chapter 5: FDI and the processing trade in China: based on vertical specialization



Processing trade: the form of China’s strong involvement in vertical specialization

Empirical evidence: the relationship between FDI and the processing trade



Chapter 6: An empirical analysis of the relation between imports and exports of China’s foreign-invested enterprises based on vertical


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Chandos Publishing
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About the Author

Wang Wei

Wang Wei is the Professor of Economics at the Tianjin University of Commerce in the People’s Republic of China. Having written two books and over 20 academic articles and chapters, he remains interested in China’s foreign trade theory and policy.

Affiliations and Expertise

Tianjin University of Commerce, China


"Provides an empirical analysis of the impact of vertical specialization on China’s trade surplus.  Discusses vertical specialization trade patterns and China’s trade surplus;…vertical specialization, foreign direct investment (FDI), and China’s import-export imbalance; FDI and the processing trade in China – based on vertical specialization…"--Journal of Economic Literature, June 2014