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Review of World Economics

, Volume 141, Issue 3, pp 510–540 | Cite as

Chinese Bilateral Intra-Industry Trade: A Panel Data Study for 50 Countries in the 1992–2001 Period

  • Jianhong Zhang
  • Arjen van Witteloostuijn
  • Chaohong Zhou
Article

Abstract

This study examines the features and determinants of Chinese intra-industry trade during the 1992–2001 transition period for 50 of China’s trade partners. We disentangle total intra-industry trade (TIIT) into vertical intra-industry trade (VIIT) vis-à-vis horizontal intra-industry trade (HIIT), using data at the four-digit SITC level. The findings indicate that Chinese bilateral intra-industry trade, particularly VIIT, increased significantly during this transition period. VIIT appears to be positively related to differences in consumer patterns. HIIT is negatively related to these differences. In addition, we find that FDI has played an important role in determining IIT, especially VIIT. Other significant intra-industry trade drivers are geographical distance, economic size, trade openness and trade composition. Finally, the impact of China’s liberalization policies and the special role of Hong Kong are demonstrated. We discuss a number of important business and political implications that can be drawn from our findings.

Keywords

Intra-industry trade China panel data 

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Copyright information

© Kiel Institute for World Economics 2005

Authors and Affiliations

  • Jianhong Zhang
    • 1
    • 2
  • Arjen van Witteloostuijn
    • 1
    • 3
  • Chaohong Zhou
    • 1
  1. 1.University of GroningenThe Netherlands
  2. 2.Yunnan UniversityP.R. China
  3. 3.University of DurhamUK

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