A Study on the Qualitative Trade Competitiveness of China to Japan in Information Technology Industry

Abstract

Purpose: The purpose of this paper was to estimate the qualitative trade competitiveness of China with Japan relative to the information technology (IT) industry covering the period from 2007 to 2017. Research design, data, and methodology: Revealed Comparative Advantage (RCA), and Market Comparative Advantage (MCA) are used. Further, an Intra-industry Trade (IIT) index is used to analyze qualitative changes in horizontal intra-industry trade and intraindustry trade of high- and low-quality goods. Results: According to a general comparative advantage analysis, the IT industry has remained relatively inferior in trade with Japan. and mainly exports goods of inferior quality and imports goods of superior quality. Broadcasting equipment and information equipment mainly export inferior quality items and export superior quality items. In the case of electronic and semiconductor parts and equipment, inferior quality items are mainly exported, but the quality of export items has improved. As a result, it cannot be overlooked that the proportion of exports of superior quality items has increased. Also, in the case of communication equipment, it was found that items of inferior quality were mainly exported, but the proportion of exports of superior quality increased significantly, which indicates that the quality of export items has improved. Implications: In the trade with Japan, China’s IT industry’s exports and imports have increased. Although the deficit has decreased, it is still at a relatively disadvantage, especially for semiconductors, broadcasting equipment, and flat-panel display manufacturing equipment. In order to solve these problems, it is necessary to increase the production of high value-added products and further improve the technological level. In this regard, the Chinese government should actively formulate development plans and increase policy and capital investment.