How Can Intra-Industry Trade of Forest Products be Promoted? An Empirical Analysis from China

Feng-Ting Wang,Yuan Tian,Bao-Dong Cheng,Qin-Er Jiang,Si-Tong Liu,Li-Chun Xiong

doi:10.3390/f10100882

Abstract

Understanding the evolution of the intra-industry trade of forest products between China and its main partner countries is a prerequisite for improving the flow of trade. The intra-industry trade status and the main influencing factors of Chinese forest products trade were measured and identified via use of bilateral forest product trade data between China and its 24 partners from 2000 to 2014, and use of static, marginal, and structural intra-industry trade indices. The results show that, firstly, intra-industry trade of the major Chinese forest products is exhibiting a low-level growth trend and has considerable growth potential. The top five countries with relatively high intra-industry trade levels are Italy, Germany, the United States, Vietnam, and Japan, and the bottom five are New Zealand, Chile, Brazil, Russia, and Spain. Secondly, the intra-industry trade among China and 13 countries, represented by South Korea, is low quality and vertical-type trade; the intra-industry trade among China and seven countries, represented by Thailand, is high quality and a vertical type of trade. Finally, the empirical analysis shows that trade openness and geographical distance are the key factors of intra-industry trade of forest products. The per capita gross domestic product gap, urbanization, foreign direct investment, forest area, and import and export value of forest products also have certain impacts on intra-industry trade.

Highlights

With the continuous economic globalization, the foreign trade economy has become one of the most important issues for national development
The IIT index measurement value shows that the overall intra-industry trade level of China and the 24 forest product trading partners is not high, and the maximum annual average IIT was 0.49, indicating that China’s foreign forest products industry trade was at a medium-to-low level, so its growth potential is considerable
The marginal intra-industry trade index (MIIT) index value shows that there are many countries whose MIIT values were close to one, which indicates that their share of intra-industry trade was relatively large in the annual increase in marginal forest products trade between China and major forest product trading countries

Summary

Introduction

With the continuous economic globalization, the foreign trade economy has become one of the most important issues for national development. In 2018, China’s import and export of forest products exceeded USD $160 billion, ranking first in the world and making it a veritable big country in forest product trading [1,2]. In this context, relying on the increasing industrial technology used for forest products and the huge market demand, and as an important part of foreign trade of forest products, the level and scale of intra-industry trade of forest products have expanded to varying degrees [3,4]. Intra-industry trade has considerably improved the level of foreign trade, and the Forests 2019, 10, 882; doi:10.3390/f10100882 www.mdpi.com/journal/forests

Methods

Results

Conclusion