Inter and intra-industry trading between China and Russia

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ABSTRACT

With the rapid development of Global trade and the division of labor between countries, intra-industry trade has also been unusual progress. Although Russia and China belongs to developing countries, the two countries participate in international trade's motives are not the same, but the study on the development, bilateral trade between China and Russia can be seen, the favorable conditions for the development of intra-industry trade between China and Russia is far greater than the adverse conditions, such as geographic proximity, economic development level, near the demand preference similarity and so on, this shows that the basic conditions of developing industry of China and Russia trade has. If the two countries have great progress in expanding the scale of business, the implementation of strategy, product difference and improve the introduction of FDI grade and the establishment of trade system arrangement of words, the Sino Russian trade within the industry will be growing steadily, the two countries economic strength will also occur quietly changed.

THEORY OF INTRA INDUSTRY TRADE and INTER INDUSTRY TRADE

Inter-industry trade is a trade of products that are owned by different industries. For instance, the trade of agricultural products produced in one country with technological equipment produced in another country can be ranked to be an inter industry trade. Countries usually engage in inter industry trade according to their competitive advantages.

Intra-industry trade, on the other hand, is a trade of products that fall within the same industry. As it has been observed, “intra industry trade (IIT), that is trade of similar products, has been a key factor in trade growth in recent decades. These trends have mostly been assigned to the fragmentation of production (outsourcing and offshoring) as a result of globalisation and new technologies” (Handjiski et al, 2010, p.15).

INTER INDUSTRY TRADE

As the world's leading agricultural producer and consumer, China and Russia each important agricultural product trade partner. In 2008, bilateral trade in agricultural products made up 12.3% of the total trade volume between the two countries. China is Russia's first agricultural products export market, Russia on 2008 Chinese agricultural exports accounted for total exports of agricultural products 14.1%. Russia is the import market Chinese agricultural product mainly, second only to Brazil and Argentina, USA, as the fourth largest source of imports of agricultural products in China. In 2008, Chinese imports from Russia accounted for Chinese agricultural products imported agricultural products 6.5%; at the same time, an important part of the agricultural product trade deficit is China agricultural trade deficit. In 2008, the bilateral agricultural trade deficit of $4250000000, accounting for Chinese agricultural product trade's total deficit 9.6%.

The food and Agriculture Organization of the United Nations on the statistical data of the agricultural products include three parts: one is the agricultural products, including all edible and non edible crops and animal products and processed products; two water products and their processed products; three is the forest products and processed products.

Bilateral agricultural products trade between China and Russia is growing rapidly expanding, the balance of trade

In recent years, bilateral agricultural products trade grows rapidly, the total trade of agricultural products in 1998 from $943000000 to $6980000000 in 2008, 11 years increased by 6.4 times, with an average annual growth rate of 58.2%. In table 1 shows 1998 - 2008 Chinese and Russian agricultural products import and export volume growth, and trade deficits. During this period, China since Russian imports increased by 8.37 times, with an average annual increase of 76.1%; Chinese exports to Russia increased 3.03 times, with an average annual increase of 27.5%. Although the Russian agricultural product trade in recent years in the overall performance of a deficit, but maintain high surplus of Chinese trade in agricultural products, and the surplus is still expanding; Chinese for agricultural products trade deficit accounted for the total bilateral trade in agricultural products from 60.9% in 2008 to 28.2% in 1998, 2007 was once as high as 64%. The Russian agricultural product trade surplus greatly catches up with its to China trade deficit.

The two inter-industry trade is the main form of agricultural products trade between China and Russia

The merchandise trade between China and Russia is mainly based on two kinds of forms: one is caused by differences in resource endowments based on interindustry trade; the other is a result of intra industry trade based on the scale of production.

Rudely Law Elder (G L) is widely used to measure the index of intra industry trade level height, the expression formula is: Bia=1 - (Xia - Mia) / (Xia+Mia). Among them, Bia is a products intra industry trade index, Xia and Mia respectively, Show

1998-2008 agricultural product trade growth and trade balance

CHINA IMPORT(US MILLION)

GROWNTH(%)

CHINA EXPORT(US MILLION))

GROWNTH(%)

Balance of trade (million)

GROWNTH(%)

1998

6

34.3

3.4

-14.2

-2.66

375

1999

8.8

44.9

1.9

-44.5

-6.86

358

2000

12.4

41.6

1.8

-5.32

-10.6

54.5

2001

15.7

26.8

2.5

38.2

-13.25

25

2002

22

40

4.4

79.3

-17.6

32.8

2003

23.1

5

5.7

29.5

-17.39

-1.19

2004

28.9

24.9

5.8

1.93

-23.04

32.5

2005

36.3

25.8

7

21.1

-29.25

27

2006

42.8

17.8

8.5

21

-34.24

17.1

2007

54.8

28

12

4.09

-42.74

24.8

2008

56.2

2.61

13.6

13.6

-42.54

0

National product exports and imports. Bida is close to 1, indicating that the product trade belongs to the intra industry trade; Bia is close to 0, indicating that the products belong to the interindustry trade.

Table 2 contains a list of eight kinds of agricultural product trade in the import and export products and intra industry trade index. Overall, CHINA Russian bilateral trade in agricultural products increased rapidly, but the change of each trade of such products is not the same. Imports, imports of forest products: Chinese sharp rise in imports in 2008 of forest products is 16 times more than in 1998, forest product imports from Russia in Chinese imported agricultural products in the proportion rose from 41.6% in 1998 to 76.4% in 2008; and the other seven categories of agricultural products the proportion of imports are down, especially the decrease of aquatic products import the proportion of 24.3%.

The export side, the change of two kinds of products is very significant: one is the aquatic products export growth, the export of aquatic products to the growth is consistent with the overall situation in recent years China aquatic products output increased and its international competitiveness improvement; two is a significant growth of horticultural products exports in 2008, horticultural products exports have accounted for more than half of the Russian China export. This is Chinese labor intensive reinforced concrete manifestation in the CHINA Russian trade in the export competitiveness of agricultural products.

It can be seen from table 2, the first, 2008 total trade reached US $5200000000, accounting for 74.5% of the amount of bilateral agricultural products trade of bulk agricultural products, horticultural products and products of three categories of products G - L index is nearly 0, which of these three products trade belongs to the typical inter industry trade; second, the volume of trade reached US $1680000000, accounting for 24% of the amount of bilateral agricultural products trade of edible animal products, non edible animal products, aquatic products and beverages and tobacco products in four categories of G L index were higher than 0, but the small print of.5, namely, the four types of products trade still belongs to the inter industry trade; third, the volume of trade is 170000000 dollars, accounted for other agricultural products of bilateral agricultural products trade volume 2.5% G - L index close to 1, is typical of the intra industry trade. Therefore, based on the differences in resource endowments of interindustry trade is the basic characteristics of agricultural products trade between China and russia.

Seen from the G - L index can also be, although the traditional interindustry trade has been like a thread throughout the agricultural product trade, but 10 years still have some changes. First of all, the bulk of agricultural products trade belongs to the more obvious of the intra industry trade in 1998, from the beginning of 2008 into a typical inter industry trade; and livestock products trade for the G L index decreased gradually from the intra industry trade into a typical inter industry trade. On the contrary, other characteristics of agricultural products trade with interindustry trade in 1998, and by 2008 was changed into typical intra industry trade. Secondly, several kind of agricultural product of G - L index changes. Among them, the consumption of animal products, non edible animal products, aquatic products, gardening products, beverages and tobacco and forest products intra industry trade index in 1998 0 or close to 0, belong to typical completely or inter industry trade; but by 2008, the G L index increased, they have certain industry division of labor, especially the consumption of animal products and aquatic products C - L index approaching 0.5, the intra industry division of labor, the higher degree of.

Table 2 in 1998 and 2008 in the CHINA-Russian trade in agricultural industry trade (C-L) Index

Chinese imports (US $ billion)

Proportion (%)

Chinese exports (US $ billion)

Proportion (%)

G_L Index

1998

2008

1998

2008

1998

2008

1998

2008

1998

2008

Agricultural commodities

0.141

0.026

Twenty three

0

0.223

0.956

6.6

7

0.77

0.05

Edible animal products

0.003

0.178

0.4

0.3

1.734

0.59

51.2

4.3

0

0.49

Non-edible animal products

0.089

0.055

1.5

1

0

0.11

0

0.1

0

0.33

Aquatic

2.768

12.049

45.8

21.5

0.337

3.621

9.9

26.5

0.22

0.46

Horticultural products

0.057

0.137

0.9

0.2

0.702

7.621

20.72

55.9

0.15

0.04

Beverages and tobacco

0

0.28

0

0.1

0.237

0.163

7

1.2

0

0.3

Forest Products

2.517

42.931

41.6

76.4

0

0.324

0

Twenty four

0

0.01

Other agricultural products

0.472

0.786

7.8

1.4

0.151

0.892

4.7

6.5

0.49

0.94

3. Farmers' products are the main features of a high concentration of farm products in Russia

  10 years, the kind of China's main agricultural imports from Russia did do not change much. Chinese agricultural imports from Russia focused on forest and aquatic products, mainly for timber, chilled and frozen fish, pulp and paper, synthetic rubber, molded wood and railway sleepers and so on. Among them, the imports of logs, chilled and frozen fish and pulp and paper imports from China has been the largest product, the proportion of total 2008 imports accounted for agricultural imports were 45.6%, 21% and 13.9% while in 1998 this proportion was 21.7%, 45.3% and 16.9%. In comparison, a larger increase in imports of logs, mainly due to growth in Chinese demand for wood; and fish imports fell significantly, because the rapid growth of China's aquatic production.

  Types of Chinese agricultural exports to Russia in 10 years, great changes have been taking place. In 2008, China's agricultural exports to Russia focused on vegetables, fruits and aquatic products, including aquatic products, fruits and nuts, vegetables and roots products, fresh vegetables and fruit products, accounting for 21.2 of the total agricultural exports %, 15.8%, 14%, 11.6% and 6%. And in 1998, China and Russia out of proportion. The formula is: CRDl = ΣXi / ΣX / o where. CRnl for concentration ratio, jade import (export) the amount of a single product, m is the number of the investigated product, n is the number of all products.

  The results show that high product concentration of agricultural trade between China and Russia, but also slightly higher than the concentration of imported products for exports. 1998 and 2008, the concentration of Chinese imports before 10 products up about 99%; and exports, although the degree of concentration is greater, but lower than the overall concentration of imported products.

  Moreover, in 2008 the export product concentration decreased compared to 1998, before 5 from 73 per cent in 1998 to 69% in 2008, before the 10 down to 87 percent from 92 percent. Description bilateral trade products with a high concentration of competitive products in export trade each other's huge scale, and this trend is more obvious in Russia.

  For example, in Russia's exports of agricultural products, the first two product exports accounted for about two-thirds of total exports.

  Russia agricultural trade complementarity four significant features

   In many ways measure the relative trade advantage, and I selected the relative trade advantage (RTA) index, the specific expression formula is: RTAia = (Xia / Xra) / (Xin / Xm) - (Mia / Mra) / (Min / Mrn ). Which, Xra is in addition to all other foreign countries I a commodity export, Xrn for all other countries except I overseas exports of other commodities, M is the corresponding value of imports. RTA is positive, indicating that the country's production of this product has a comparative advantage; RTA is negative, indicating that the country does not possess a trade advantage. Depending on the size RTA value niche products can be divided into strong advantage (RTA≥1), weak superiority (0≤RTA <1), weak disadvantage (-1≤RTA <0) and disadvantages (RTA <-1).

10 years, the kind of China's main agricultural imports from Russia did do not change much. Chinese agricultural imports from Russia concentrated on forest and aquatic products, mainly for timber, chilled and frozen fish, pulp and paper, synthetic rubber, molded wood and railway sleepers and so on. Among them, the imports of logs, chilled and frozen fish and pulp and paper imports from China has been the largest product, the proportion of total 2008 imports accounted for agricultural imports were 45.6%, 21% and 13.9% while in 1998 this proportion was 21.7%, 45.3% and 16.9%. In comparison, a larger increase in imports of logs, mainly due to growth in Chinese demand for wood; and fish imports fell sharply, because the rapid growth of China's aquatic production.

  Types of Chinese agricultural exports to Russia in 10 years, profound changes have taken place. In 2008, China's agricultural exports to Russia focused on vegetables, fruits and aquatic products, including aquatic products, fruits and nuts, vegetables and roots products, fresh vegetables and fruit products, accounting for 21.2 of the total agricultural exports %, 15.8%, 14%, 11.6% and 6%. And in 1998, China and Russia out of proportion. The formula is: CRDl = ΣXi / ΣX / o where. CRnl for concentration ratio, jade import (export) the amount of a single product, m is the number of the investigated product, n is the number of all products.

  The results show that high product concentration of agricultural trade between China and Russia, but also slightly higher than the concentration of imported products for exports. 1998 and 2008, the concentration of Chinese imports before 10 products up about 99%; and exports, regardless of the fact that the degree of concentration is higher, but lower than the overall concentration of imported products.

  Moreover, in 2008 the export product concentration reduced compared to 1998, before 5 from 73 per cent in 1998 to 69% in 2008, before the 10 down to 87 percent from 92 percent. Description bilateral trade products with a high concentration of competitive products in export trade each other's huge scale, and this trend is more obvious in Russia.

  For instance, in Russia's exports of agricultural products, the first two product exports accounted for about two-thirds of total exports.

  Russia agricultural trade complementarity four significant features

   In many ways measure the relative trade advantage, and I selected the relative trade advantage (RTA) index, the specific expression formula is: RTAia = (Xia / Xra) / (Xin / Xm) - (Mia / Mra) / (Min / Mrn ). Which, Xra is in addition to all other foreign countries I a commodity export, Xrn for all other countries except I overseas exports of other commodities, M is the corresponding value of imports. RTA is positive, indicating that the country's production of this product has a comparative advantage; RTA is negative, indicating that the country does not possess a trade advantage. Depending on the size RTA value niche products can be divided into strong advantage (RTA≥1), weak superiority (0≤RTA <1), weak disadvantage (-1≤RTA <0) and disadvantages (RTA <-1).

Table 3 2008 relative trade advantage in agricultural trade between China and Russia the main product (RTA)

China

Russia

China

Russia

Log

-7.42

15.94

Fruits and nuts

0.16

-3.86

Chilled, frozen fish

0.36

-2.01

Vegetable Products

2.38

-2.02

Pulp and paper

-5.59

1.01

Fresh vegetables

0.89

-2.3

Synthetic rubber

-2.71

4

Fruit Products

1.79

-1.34

Molded timber, sleepers

-0.51

3.08

Fruit, vegetable juice

0.98

-1.57

Animal Feed

-0.19

-1.1

Aquatic products

3.71

-0.46

Table 3 Shows the value of CHINA and Russian trade in agricultural products in RTA main product. RTA estimation results indicate that agricultural trade between China and Russia has significant complementary features, taking into account the comparative advantages of the two countries, in line with the needs and interests of both sides. First, China's massive imports of timber, pulp and paper, synthetic rubber and wood products from Russia, RTA values of these products are mostly negative and less than -1, indicating that China is at a disadvantage even on these products is a strong disadvantage; and For Russia, RTA value of these products are positive and greater than 1, indicating that Russia has a strong advantage in these products. Second, the main agricultural products crystal Chinese exports to Russia, including aquatic products, fruits and nuts, fresh vegetables and vegetable products, fruit and fruit products, with its RTA values are positive, show them the advantages of Chinese products and China has a strong advantage in labor-intensive products such as aquatic products, fruit and vegetable products respect; and RTA value of these products in Russia are negative, indicating that these products are of inferior products in Russia. Third, in the products listed in the animal feed are the two sides do not have a trade advantage

CONCLUSION

CHINA AND Russian trade in agricultural products is an important part of China's agricultural trade, its main features are: First, the rapid growth of bilateral trade in agricultural products, mainly imported to China, China is in a deficit position, and the trade deficit continues to expand. Second, China's imports of forest products from Russia and resource-intensive products, such as fresh seafood, Russian export horticultural products and aquatic products, and other labor-intensive products, reflecting differences in resource endowments parties, trade strongly complementary. Third, trade product concentration is very high, is different from the Chinese agricultural trade between China and Russia and other important characteristics of the countries of origin of agricultural products trade, China's imports from Russia and export of the first two products of the top five products accounted for the import and export of China twenty three. Fourth, gave the complementary advantages of the two countries on agricultural products, combined with lower land bordering both sides and transportation costs, the size of agricultural trade between China and Russia will continue expanding.

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