Try to describe and evaluate the theoretical content of intra-industry trade.

First, the emergence and main contents of intra-industry trade theory

Traditional trade theories, from Ricardo to Herschel-Olin, all emphasize comparative advantage and believe that the reason for trade between countries is the difference in productivity and endowment. A country will always export its own products with comparative advantages and import its own products with comparative disadvantages. This trade theory fully explains the main international trade mode until the middle of this century, that is, the trade of different products between countries with different economic development levels. However, since the 1970s, this trade theory has become more and more distant from the reality of international trade. There are two main reasons: first, the traditional trade theory does have a relatively perfect system, which can be justified, but it also has a set of strict assumptions, which help to improve the theoretical system and make the theory deviate from reality. These premises are a completely competitive market structure and a constant technical level, and there is no economies of scale. The market structure of perfect competition does not exist in reality, but with the improvement of economic environment and technical level, economies of scale are everywhere. Secondly, since the post-war period, especially since the 1970s, the trade of the same or similar products between developed countries with similar factor endowments has been increasing, even accounting for the vast majority of their trade, which can never be explained by traditional trade theory. In this context, the systematic study of intra-industry trade began in the 1970s. After more than 20 years' development, the research results of intra-industry trade have formed a new trade theory, which is based on the assumption that the market structure is imperfect and economies of scale exist, and is closer to the trade reality. It believes that trade is not necessarily the result of comparative advantage, but may be the result of economies of scale or increasing income. In an imperfect competitive market, even if there is no or little difference in resource endowment and technical level between countries, it is entirely possible for countries to pursue production specialization and engage in international trade because of demand preference, economies of scale and product differences. At the same time, it also provides an excuse for state intervention. In an imperfect competitive market, the government supports the economies of scale of domestic monopoly manufacturers and obtains monopoly profits. Therefore, the study of intra-industry trade phenomenon led to the strategic trade policy generally adopted by developed countries later, emphasizing trade protection.

First of all, the development of intra-industry trade is closely related to the cost of economic adjustment when a country liberalizes its trade. As mentioned above, Krugman's model proves that the adjustment brought by intra-industry trade is relatively mild and not too painful compared with inter-industry trade. However, in the f-k model of vertical intra-industry trade, the difference of vertical products comes from the difference of factor density, and the dynamic vertical specialization caused by international trade will have a greater redistribution effect. Suppose that enterprises in one department of a country, some of which are import-competitive enterprises and some are export-oriented enterprises, if only horizontal intra-industry trade is considered, workers can find jobs in export-oriented enterprises in the same department after an import-competitive enterprise loses its job, and the adjustment cost at this time is relatively small. When we consider vertical intra-industry trade, we will find that high-quality products are often made by workers with high human capital, while low-quality products are often made by workers with low human capital. If China exports low-quality products in intra-industry trade, it will be beneficial to the employment of workers with low human capital content in China. Enterprises with high product quality have strong import competitiveness and layoffs are inevitable. When workers with high human capital find jobs again, they either accept lower wages or not. With the improvement of China's economic openness, the share of intra-industry trade is also increasing. What impact this will have on China's economy is our concern. From the existing research results, intra-industry trade still reduces the cost of economic adjustment. For example, Menon, J. found that due to the increase of intra-industry trade, the short-term and long-term adjustment costs of Australia's trade liberalization were less than previously expected. (Note: Menon, J., "Trade Liberalization and Intra-industry Specialization: Australian Experience", Policy Research Center: General Document. G- 107, June 1994, reprinted1February 1999. Haynes and others use econometric methods to evaluate the wages of enterprises, industries and occupations, so as to predict the cost caused by job movement between industries and within industries in the form of wage loss. (Note: Haines, m &；; Upward, r. & ampwright, P., "Estimating wage costs adjusted between departments and within departments", Center for Globalization and Labor Market Research (School of Economics, University of Nottingham), research paper 1999/ 15. ) They conducted a cross-time survey of a group of workers in Britain (1975- 1998), so that the unobservable influencing factors were controlled. Judging from their calculation results, if a person changes careers, it may lead to an increase in remuneration and a decrease in wages; If he enters a new industry while changing enterprises, his income will drop, especially for older workers, which shows that their inter-industry adjustment cost is very high; If a person changes jobs while changing enterprises, his income will drop, but the negative impact is not particularly great; If a person changes jobs, enterprises and industries at the same time, he will lose the most (much more than the adjustment cost when he only changes jobs and enterprises). The conclusion is that intra-industry adjustment does have less negative impact on income than inter-industry adjustment, that is, intra-industry adjustment is more cost-saving. In addition, Haynes and others have also made a comparative study of the adjustment costs within and between industries in the United States and Britain. The conclusion is that for the length of unemployment, the adjustment cost of labor factors within the industry is lower than that between industries. (Note: Haines, m &；; Up, r. & ampwright, P., "Smooth and Sticky Adjustment: A Comparative Analysis of the United States and Britain", in choi, E.K. & Greenaway, D, Globalization and Labor Market, UK: Blackwell Publishing Co., Ltd., 200 1, p.145. Therefore, one of the ways for China to reduce the cost of economic adjustment in the process of trade liberalization is to develop intra-industry trade between China and other countries.

Secondly, intra-industry trade not only reflects the competitive advantage of a country's industry in the international market, but also has a significant correlation with economic development. Both theory and reality show that horizontal intra-industry trade in developed countries is often associated with high-tech and high value-added products. If a country mainly exports these products, it is undoubtedly in a favorable position in the international market. Judging from the current situation in China, the share of intra-industry trade is on the rise. According to Hellvin, L.' s calculation results, China's intra-industry trade coefficient rose from 0. 125 in 1980 to 0.207 in 1992 (note: Hellvin, L. "Vertical intra-industry trade between China and oecd countries", technical paperNo./kloc of oecd Development Center. According to Yue Changjun's calculation, the intra-industry trade coefficient of China rose from 0.297 in 1980 to 0.430 in 1997. (Note: Yue Changjun: "Follow the dynamic comparative advantage-an empirical analysis of intra-industry trade between China and the United States", International Trade, 2000(3). In the process of trade with developed countries, the high-level intra-industry trade of manufacturing industry reflects the country's competitive advantage in international trade. The continuous improvement of intra-industry trade level in China is the result of the continuous upgrading of industrial structure, the continuous growth of emerging industries and the increasing proportion of capital and technology-intensive industries in China. However, the main trade between China and developed countries is vertical intra-industry trade, and the commodities exported by China are mainly products with relatively low quality. Hao Wen analyzed the import-export price ratio of 74% in the intra-industry trade between China and OECD countries, and found that in the intra-industry trade between China and OECD countries, the export price of 75% of China's products was lower than the import price; Horizontal intra-industry trade only accounts for 7% ~ 14% of the total intra-industry trade. (Note: hellvin, L., "Vertical Intra-industry Trade between China and OECD Countries", OECD Development Center Technical PaperNo. 1 14, July 1996, PP14,27. The vertical intra-industry trade of China's manufacturing industry is still dominant, which shows that China's international trade competitiveness needs to be improved. At present, China still wins the international market with the advantage of labor price. Although the structure of China's export commodities has obviously improved since 1980s, most export industrial products are still low-grade labor-intensive products with low added value, shallow processing degree and low technology content, or semi-processed products and primary processed products, and many products are processed or assembled with imported materials. Because the level of economic development is closely related to the quantity and types of intra-industry trade, policies to promote the development of intra-industry trade in manufacturing and other sectors often become policies to promote a country's economic development. If the trade between China and developed countries develops from inter-industry trade to vertical intra-industry trade, it can further develop to horizontal intra-industry trade, which will be the embodiment of China's catching up with developed countries in the field of foreign trade. As a developing country, it has been one year since China joined the WTO. In order to minimize the adjustment cost and gain competitive advantage, we should seriously study the essence of intra-industry trade, the present situation of intra-industry trade in China and the measures to promote its development, so as to finally achieve the goal of promoting economic development.