Search

The objective of this paper is to empirically test various hypotheses about the determinants of intra-industry trade between China and its major trading partners using panel data over the period 1980-2003. To strengthen the synergies between regional economic integration (ASEAN, as an example) and the determinants of intra-industry trade (in particular, the geographical distance), so we find it very important for us to have a concrete idea on the determinants of intra-industry trade in China before (during the subperiod 1980-1991) and after (during the period 1992-2003 under) the integration of the countries in ASEAN. The results of our estimates show that the relationship between the factors and different types of intra-industry trade varies from one period to another. The results indicate that the nature of Chinese intra-industry trade is negatively and significantly correlated with geographic distance for the entire period (1980-2003) and after the integration of China in ASEAN (1992-2003). This leads us to conclude that the proximity of trading partners means lower transportation costs and information, than the trade increased. [ABSTRACT FROM AUTHOR]