Question

Research of the intra-industry trade contents the trade volume, value, industries, trends, comparison with inter-industry trade of exact two countries and some other related issues about Myanmar and China

Answer 1

                                    Intra-industry trade refers to the exchange of similar products belonging to the same industry. It is usually applied to international trade, where same types of goods or services are both imported and exported. Paul Krugman’s New trade theory gives a clear explanation to this. Krugman argues that the economies specialise to take advantage of increasing returns, not following the differences in regional endowments. Thus the trade allows the countries to specialise in a limited variety of production and thus reap the advantage of increasing returns. Intra-industry trade is done in 3 ways, ie; homogeneous, horizontal and vertical. Inter-industry trade refers to the trade of products that belongs to different industries. For example, the trade of agricultural products of a nation with the technological products of another nation can be considered under inter-industrial trade.

                                    China is the largest trading partner as well as he biggest investment destination for Myanmar. As of 2019, China’s cumulative investment in Myanmar accounted for over 25 percent of Myanmar’s total foreign investment. Chinas major exports to Myanmar includes mechanical and electrical products, textiles, motorcycle accessories and chemical products whereas its imports from Myanmar includes logs, sawed timber, agricultural products and mineral products. From 11 billion dollar in 2004 to 168 billion dollar in 2019, the trade between China and Myanmar has always been in a growing scale.

                                    When the intra and inter industrial trade structures are considered taking into account these two nations China and Myanmar, the trends, trade volume and the values of trade plays a memorial role in sustaining the trade relations. The analysis of trends shows that inter-industrial trade always forms a major portion of trade than the inter-industrial ones. Here, although the trade does not happen within similar industries as the global trend goes, it has been advantageous to both the nations as both of them have benefited out of it. The technological cooperation of China and the traditional products of Myanmar have led to the development of inter-industrial trade between them. Hence, from the above analysis it is clear that the trade relationships have furthered between both the nations and have in fact influenced the trends in varying times.