The Development of Theories on Intra-industry Trade

This paper combs the development of theories combined the practice and connotation of intra-industry trade.According to this paper,the object of study on traditional intra-industry trade theory is based on final products produced by countries,especially the developed and developing countries which utilize fully the comparative advantage of factor endowments.With the 1990s' in-depth international direct investment,multinational companies dominate the global realization of the resources in the various stages of production processes in the optimal configuration,and intra-industry trade theory focuses on the intermediate products.One of China's major trade patterns of processing involves in global competition.