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Introduction: Trade surplus in China – vertical specialization and related issues

Abstract:

With vertical specialization (VS), the processing trade has been flourishing in China and played a leading role in imports and exports. China’s trade surplus has become an increasing source of friction. The bilateral trade imbalances between China and its trading partners were largely determined by a comparative advantage and VS.

Key words

Vertical specialization

Trade conflict

Trade imbalance

Processing trade

Trading partner

China

US

Japan

The starting point: China’s vertical specialization trade

While China’s foreign trade has grown dramatically in the past three decades, equally dramatic changes have occurred in the trade pattern. One of the ...

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