Analysis of the Comparative Advantage of China's Manufacturing Industry under Intra-product Specialization

Based on the analysis of intra-product specialization of China's manufacturing industry during the years between 1997 and 2006, the paper discusses the characteristics of factor endowment and value added for China's manufacturing industry to participate in intra-product specialization, and points out that, although capital-intensive industry has much relative importance in intra-product specialization, China still bases on its labor advantage. Driven by higher value added, firms in China's manufacturing industry will accumulate capital and technology independently, which helps the industry to upgrade from low degree of processing to high degree of processing.