Yang Rudai, China Center for Economic Research, Peking University
Zhu Shi'e, School of Economics, Central University of Finance and Economics
[Abstract] This paper analyzes the comparative development of foreign trade between the Pearl River Delta (PRD) region and India and Eastern Europe from 1995 to 2005. We classify international trade commodities into four major categories of resource-intensive, labor-intensive, capital-intensive and technology-intensive based on the SITC three-digit classification, and examine the differences and changes in the structure and competitiveness of foreign trade of the three regions in terms of a number of indicators. The study shows that the foreign trade structure and competitiveness of the Pearl River Delta (PRD) region has a big lead over India, and this lead mainly comes from technology-intensive products; at the same time, there is still a certain gap between the PRD region and Eastern Europe in capital-intensive heavy industry.
[Keywords]Pearl River Delta; India; Eastern Europe; Trade; International Comparison
I. Introduction and Literature Review
The Pearl River Delta (PRD) region is the earliest region in China to open up to the outside world, and it is the earliest and best region for the development of the externally oriented economy, and it is a very important region in the foreign trade of China. By making full use of the advantages of labor, land, resources and policies, the PRD vigorously introduced foreign investment and developed an export-oriented economy, which made the competitiveness of labor-intensive products in the international market continuously improve, and led to the development of related industries, and became the strongest economic region in the country. From 1980 to 2003, the average annual growth rate of nominal GDP and real GDP was 20.52% and 13.92% respectively, and the per capita GDP in 2003 was 47,261 yuan, which is comparable to that of the middle-income countries in the world (Huang Guohua and Lv Kaiyan, 2006).
Many scholars have devoted their studies to the internal integration of the PRD and its competitiveness in the national regional economy. However, it is important to draw our attention to the fact that the development of an externally-oriented economy has played a crucial role in the economic take-off of the PRD and the achievement of today's development results. While the economic development of the PRD has been influenced by domestic factor endowment, industrial layout, national policies and other factors, a greater impetus has come from the introduction of foreign investment and the development of foreign trade. Accordingly, the competition for economic development in the PRD comes not only from other regions of the country, but also from other countries and regions of the world, and from the international trade market. Our literature review shows that there is still a lack of research in this area. This paper tries to fill the gap of this research in China by analyzing the competition in the international market faced by the economic development and industrial restructuring of the Pearl River Delta (PRD) from the perspective of the development of foreign trade, and analyzing the reasons for the development history and the current situation.
This paper compares the development history and current situation of foreign trade structure and international competitiveness of the Pearl River Delta (PRD) with those of India and Eastern Europe. The Pearl River Delta is one of the more developed regional economies in China, India is a large developing country, and Eastern Europe is the Commonwealth of Transitional States, which belongs to the more developed economies. The foreign trade structures of these three regions have their own characteristics, and it is far-fetched to compare India and Eastern Europe with the PRD if we only consider the comparison of the overall trade structure. This paper is more concerned with the differences in international competitiveness reflected in the back of the trade structure, and hopes to analyze the competition faced by the PRD in the international merchandise trade market, and the target of comparison should be as broadly representative as possible. India and Eastern Europe represent different types of economies and different modes of economic development. In fact, we will also introduce comparisons with developed economies such as the United States and Japan, which will help us to gain a comprehensive understanding of the PRD's external trade. In addition, India and Eastern Europe have a lot of similarities with the PRD in terms of factor endowment and labor resources, and their products are less complementary and more competitive in the international market, which makes these two regions very important competitors of the PRD. Therefore, this paper mainly chooses India and Eastern Europe to make a comparative analysis with the PRD.
This paper analyzes the foreign trade situation of the three regions from different aspects based on the detailed foreign trade data of the three regions since 1995. Firstly, we classify the international trade commodities into four categories of resource-intensive, labor-intensive, capital-intensive and technology-intensive products according to their technology content on the basis of the three-digit classification of the SITC, so as to analyze the industrial and technological structure of the foreign trade of the three regions as a whole. Next, different indicators such as relative comparative advantage, intra-industry trade, similarity of export structure and major trading countries are chosen to examine the differences and changes in the competitiveness of foreign trade of the three regions and the reasons behind them.
II. Data Description, Commodity Classification and Indicator Construction
(I) Data Description
The data in this paper include two parts: import and export data of nine cities in the Pearl River Delta (PRD), and import and export data of India and Eastern Europe. The former comes from Guangzhou Customs, with HS four-digit classification, which categorizes all traded commodities into about 1,200 types; the latter comes from the United Nations Commodity Trade Database (COMTRADE), with HS six-digit classification, which categorizes all traded commodities into about 5,600 types. The specific scope of the PRD includes nine prefecture-level cities1: Guangzhou, Shenzhen, Zhuhai, Huizhou, Foshan, Dongguan, Zhongshan, Jiangmen and Zhaoqing. Since the time span of our study is from 1995 to 2005, during which Guangdong Province underwent several administrative restructuring, this paper incorporates Shunde and Nanhai into Foshan, and Panyu into Guangzhou, and this restructuring adapts to all the years from 1995 to 2005. Since the data provided by Guangzhou Customs covers all county-level administrative units in Guangdong Province, this adjustment does not affect the quality of the data.
In order to simplify the analysis of the problem, this paper only considers five representative transition economies in Eastern Europe: Poland, the Czech Republic, Slovakia, Hungary and Romania. When analyzing the foreign trade situation of the five countries in Eastern Europe, the issue of internal trade within the five countries will be involved, and the analysis found that the amount of internal trade between the five countries is not very large, therefore, this paper believes that the overall analysis of the internal trade is not excluded is a better method, which maintains the completeness of the data and better reflects the characteristics of the foreign trade of the Eastern European countries.
(II) Classification of Trade Commodities
This paper refers to the studies of OECD (1994) and Lall (2000), and firstly integrates HS four-digit classified commodities and HS six-digit classified
commodities into SITC three-digit classified commodities. Due to the change of statistical standards, in order to maintain the consistency of data, there are some commodities that we can not integrate and categorize, the total import and export amount of these commodities accounted for a very small proportion of all the trade volume, and will not have an impact on the conclusions. Next, more than 200 commodities classified according to SITC three-digit classification are reclassified into four major categories: resource-intensive products (PP), labor-intensive products (LT), capital-intensive products (MT) and technology-intensive products (HT). Resource-intensive products mainly refer to raw materials that do not undergo any processing and resource-intensive products that are simply processed and used for direct consumption or industrial intermediates. Labor-intensive products include textiles, clothing, footwear, and simple metalwork, toys and plastic products, which are mainly labor-intensive. Capital-intensive products include motorcycles, automobiles and other automated products, chemicals, fibers, steel and other processed industrial products, as well as machinery, ships, engines and other engineering industrial products, the technical content of this type of products is not too high, but the economy of scale is very prominent, mainly capital-intensive heavy industrial products. Technology-intensive products, including electronic telecommunication products and medical equipment, optical instruments, aviation products and other technology-intensive products.
Three, the overall situation and the technical structure of export commodities comparison
First look at the overall situation of foreign trade. Table 1 lists the basic situation of foreign trade of the three regions from 1995 to 2005. The Pearl River Delta (PRD) has a very prominent position in China's foreign trade, accounting for between 25% and 35% of the country's total, both in terms of exports and imports. In recent years, with the development of externally-oriented economies in the Yangtze River Delta and other regions, the relative position of the PRD has declined, but it is still very strong. India's total foreign trade is obviously much lower than that of the PRD, especially in terms of exports. In 2005, India's exports amounted to US$103.4 billion, while the PRD's exports amounted to US$223.8 billion, while the trade volume of the five countries in Eastern Europe was larger than that of the PRD, with exports amounting to US$290.6 billion and imports amounting to US$319.7 billion in 2005. In addition, the PRD had a high trade surplus of US$41.5 billion in 2005, while Eastern Europe and India had trade deficits of US$29.1 and US$46.3 billion, respectively. Relative to the trade volume, India's trade deficit was so large that it accounted for 45% of its exports that year.
According to the previous classification, we analyze in detail the changes in the technical structure of goods in the three regions. Figure 1 shows the changes in the technological structure of exports of the three regions. the characteristics of the three regions are very obvious, the Pearl River Delta region's exports of labor-intensive products and technology-intensive products, and the export structure continues to optimize. 1995 to 2005, the Pearl River Delta labor-intensive exports rose from $ 22.4 billion to $ 62.4 billion, but its share of the decline from 45% to 21%, and the export structure has continued to maintain a high level of exports of labor-intensive products. Labor-intensive products continue to maintain a strong competitive advantage, but their relative position is declining and their share of exports is getting smaller and smaller. Correspondingly, exports of technology-intensive products rose from US$10 billion to US$97.4 billion, a very rapid growth rate, and their share of total exports from the PRD region rose from 20% to 44%. The relative positions of exports of labor-intensive and technology-intensive products have been reversed, and the technological structure of export commodities has been greatly upgraded. In addition, the share of exports of resource-intensive products has continued to fall from 7.6% to 4.1%, while the share of exports of capital-intensive heavy industrial products has remained virtually unchanged at 20% over the past 10 years. This also reflects the difference between the development mode of the Pearl River Delta (PRD) region and the Yangtze River Delta (YRD) and Bohai Rim (Bohai Rim) regions. Adjacent to Hong Kong and Macao, the PRD region is the earliest region in China to implement the reform and opening up, and does not have an industrial base left over from the planned economy era, and its initial development was based on the introduction of foreign capital, which made the development of heavy industry in the PRD region lag behind in relative terms. In recent years, the petrochemical, automobile and shipbuilding industries in Guangdong Province have developed rapidly and made great achievements. In the composition of the total industrial output value of Guangdong Province, the proportion of the total industrial output value of the five light industry industries, namely textile and garment, food and beverage, medicine, forest industry, paper and construction materials, dropped from 27% in 2000 to 18% in 2005, while the proportion of the total industrial output value of the local economy and trade value of the electronics and information, electrical machinery and special equipment, petroleum and chemical and vehicle manufacturing industries rose from 44% in 2000 to 55% in 2005. 55% in 2005.
In recent years, India's technology-intensive industries have developed rapidly, especially the development of India's software industry is impressive, but, as can be seen from Figure 1, India's export commodity technology structure has always remained at a relatively low level, exports of resource-intensive products and labor-intensive products are mainly, technology-intensive product exports are still very limited. since 1995, the share of exports of resource-intensive products remained at about 45%. Since 1995, the export share of resource-intensive products has been maintained at about 45%, which is the most important export commodity, and in recent years, the export share of these products has been slowly rising, reaching 47% in 2005. Labor-intensive products are still India's main export commodities, accounting for about 35% of the export share, resource-intensive products and labor-intensive products accounted for 80% of India's total exports, accordingly, capital-intensive products and technology-intensive products exports are very small, especially technology-intensive products export share is less than 4%. On the whole, India's export structure is still in the stage of exchanging resources for foreign exchange, exchanging resources for technology. more than 10 years, its export structure basically did not change, industrial structure and technology structure is still very low, until 2005, the share of resource-intensive products and labor-intensive products still accounted for 76% of the exports, from the aspect of foreign trade, India and China is still a very big gap.
The exports of the five countries of Eastern Europe clearly reflect the characteristics of the transition economies and the results of industrial division of labor within the European Union. If Europe as a complete complete industrial categories of complete economies,, the industrial development of Eastern Europe in Europe as a whole is at the lower end of the position. This is also reflected in its export structure, where labor-intensive and resource-intensive products are the main export commodities, each accounting for 30% of exports in 1995, and each accounting for 20% of exports in 2005, albeit with some decline. In addition, owing to a good base of heavy industry, the Eastern European countries have a greater comparative advantage in the development of heavy industry, which has become a pillar industry in these countries. The export share of capital-intensive heavy industry products has been rising continuously, showing strong international competitiveness, with the export value rising from 30 billion dollars in 1995 to 101 billion dollars in 2005, and the export share rising from 23% to 35%, which is a very rapid growth rate. Comparatively speaking, the development of technology-intensive industries in Eastern Europe lacks comparative advantages and accounts for a relatively small share of exports, however, the development of these years has been faster, and the share of exports also rose from 6% in 1995 to 14% in 2005.
Table 2 lists the top five export commodities of the PRD, India and Eastern Europe in 1995 and 2005 according to the HS two-digit classification, also reflecting the changes in the export structure of the three regions in the last 11 years. In 1995, the top five export commodities in the PRD region were technology-intensive electromechanical products (84, 85) and labor-intensive products (62, 64, 95), and in 2005, the dominance of electromechanical products was further strengthened, and the export rankings of shoes, boots and garments (62, 64) had already withdrawn from the top five, whereas the exports of photoelectricity and precision instruments (90) with higher technological content rose sharply and ranked among the top five. Rise, among the top 5, the export structure has been greatly improved. India's exports ranked in the top five commodities, including three resource-intensive products (03, 10, 52) and two labor-intensive products (62, 71) in 1995, and the same in 2005, including three resource-intensive products (26, 29, 27) and two labor-intensive products (62, 71), but the three resource-intensive products are agricultural products, but in 2005 are simple processed products, but the three resource-intensive products are agricultural products, while in 2005 are simple processed products. However, in 1995, the three resource-intensive products were agricultural products, while in 2005, they were simply processed industrial raw materials, and the structure of exports has still changed to some extent. Eastern Europe's exports of heavy industrial products in the industry is not too concentrated, in 1995, vehicles (87) and iron and steel (72) exports in the top 5, in the case of heavy industrial products exports rose sharply in the share of exports, in 2005, but only the export value of vehicles (87) in the top 5. In addition, Eastern Europe in technology-intensive exports are more concentrated, electromechanical products (84, 85) is the most important export value of the products. In addition, Eastern Europe is more concentrated in the export of technology-intensive products, and electromechanical products (84, 85) are the most important export commodities, and their export value ranked in the top 5 in 1995 and 2005.
Fourth, Comparison of Foreign Trade Competitiveness
This paper compares the competitiveness of foreign trade of the three regions with the relative display of comparative advantage, the intra-industry trade index, and the index of the similarity of the export structure. In order to reflect the differences in the degree of competition among the three regions in different international markets, the paper will also analyze the major export trading countries of the three regions.
(I) Relative Displayed Comparative Advantage
We can calculate the relative displayed comparative advantage of the PRD relative to India and Eastern Europe in general as well as in various types of products respectively. Figure 2 illustrates the relative display comparative advantage of the PRD region in exports vis-à-vis Eastern Europe and India.
Overall, the PRD region's demonstrated comparative advantage vis-à-vis Eastern Europe showed a declining trend from 1995 to 2002, from 9.9 in 1995 to 5.0 in 2002, while the performance from 2002 to 2005 was relatively stable, remaining at around 5.0. Further analysis reveals that the relative demonstrated comparative advantages of labor-intensive products and capital-intensive heavy industry products are declining, with the relative demonstrated comparative advantage of labor-intensive products dropping from 2.8 to 1.4, and that of capital-intensive products dropping even more sharply from 4.4 to 0.9, which is the main reason for the decline in the overall relative comparative advantage. The relative comparative advantage of technology-intensive products experienced a first decline and then a trend. Figure 2 shows the comparative advantage of the PRD region in exports relative to Eastern Europe and India.
Overall, the PRD region's displayed comparative advantage vis-à-vis Eastern Europe showed a declining trend from 1995 to 2002, from 9.9 in 1995 to 5.0 in 2002, while its performance from 2002 to 2005 was relatively stable, remaining at around 5.0. Further analysis reveals that the relative demonstrated comparative advantages of labor-intensive products and capital-intensive heavy industry products are declining, with the relative demonstrated comparative advantage of labor-intensive products dropping from 2.8 to 1.4, and that of capital-intensive products dropping even more sharply from 4.4 to 0.9, which is the main reason for the decline in the overall relative comparative advantage. The relative comparative advantage of technology-intensive products, on the other hand, went through a process of decline and then rise, with a certain degree of fluctuation. In summary, the gap between the PRD region and the export industries of Eastern Europe is concentrated in the capital-intensive heavy industry. In 2005, the export of automobiles and other products from Eastern Europe had reached US$36.9 billion, and the export share of heavy industry products had reached 35%, making heavy industry products the most important export products of Eastern Europe, while the gap between the PRD region and the PRD region in this respect is still relatively large.
The overall trend of the PRD region's comparative advantage over India has been on the rise, from 15.5 to 24.5 in the past 11 years, with a large lead, and this advantage mainly stems from the technology-intensive products, whose comparative advantage has risen from 4.0 to 16.3, a three-fold increase. In fact, there is a slight decline in the relative comparative advantage of resource-intensive and labor-intensive products, which is an inevitable consequence of the continuous upgrading of the structure of the export industry in the PRD region, and indicates that the relative importance of resource-intensive and labor-intensive products is declining. Of course, we also need to look at this conclusion with caution and make the following two points. (1) The proportion of processing trade in the PRD's foreign trade is very high, but this does not fundamentally affect the conclusion. 84% of the PRD's exports were processing trade in 1997, and 76% of its exports were still processing trade in 2005 (Yang Rudai, 2007), whereas the proportion of processing trade in India is lower due to national policy constraints, which to a certain extent overestimates the relative demonstrated comparative advantage of the PRD region over India. To some extent, this may overestimate the relative comparative advantage of the PRD region over India. However, over the past 11 years, the relative demonstrated comparative advantage of the PRD over India has risen rapidly in the face of declining processing trade, reflecting a significant improvement in the competitiveness of local enterprises, and a study by Yao, Yang and Zhang, Ye (2007) suggests a similar view. (2) Overall, the PRD's lead over India comes mainly from technology-intensive industries, but this lead is not as large as that reflected by the rise in the index of relative demonstrated comparative advantage from 4.0 to 16.3. This is partly due to the processing trade and partly due to the limitation of analyzing only traded goods in this paper. The analysis of trade commodities can only reflect the two regions in the export competitiveness of manufacturing products on the difference, a lot of technology trade and trade in services can not be reflected, a lot of not involved in trade but the competitiveness of very high technology content of the industry can not be reflected. India has a very good higher education system, there are a large number of excellent senior personnel, which is incomparable to the Pearl River Delta, but this advantage can not be reflected in the analysis of trade commodities, India's software industry is a good example.
(II) Index of intra-industry trade
Table 3 calculates the proportion of intra-industry trade in labor-intensive, capital-intensive and technology-intensive industries in the Pearl River Delta region, India and Eastern Europe respectively. Since most of the resource-intensive products are directly used for consumption or as raw materials for the production of higher-level products, the proportion of intra-industry trade is not very meaningful and will not be analyzed in this paper.
It can be seen that the proportion of intra-industry trade in the Pearl River Delta (PRD) region is the lowest, especially for labor-intensive products, the proportion of intra-industry trade is very low, and from 0.18 in 1995 to 0.10 now, which indicates that foreign trade in labor-intensive products in the PRD region has fully entered the stage of mature industrial development. India's intra-industry trade ratio of labor-intensive products is relatively low, but shows a rising trend, further analysis can be found that India's exports to resource-intensive products and labor-intensive products are mainly, and India's population base is large, consuming more and more resources, in recent years, more and more demand for raw materials such as petroleum, which makes India's imports of some raw materials and primary products increased, resulting in the rise of the proportion of intra-industry trade. The proportion of intra-industry trade has increased. In addition, the proportion of India's intra-industry trade in capital-intensive products is also on the rise, indicating that while exporting a small amount of heavy industrial products, India is also importing some necessary production and processing equipment to improve the level of domestic production technology. The proportion of intra-industry trade in Eastern Europe is very high, especially heavy industrial products, which is also, as many domestic scholars have pointed out, a large number of imported intermediates, after simple processing, reorganization and export of final products, while the Eastern European countries are only obtaining less processing and assembly costs, and did not get more to the value-added products? Eastern European countries have been reduced to "European factories" may be? In addition, the proportion of intra-industry trade in labor-intensive products in Eastern Europe is also high, a more detailed analysis found that this is actually due to the large number of imports of raw materials such as oil from Russia and other countries in Eastern Europe, while exporting a large number of simply processed primary manufactured goods and low-skilled labor-intensive products.
The proportion of intra-industry trade in technology-intensive products is very high in all three regions, as a result of production patterns and the international division of labor. The production of low-tech products mainly relies on natural resources, labor and other endowments, the production process does not require high technology and teamwork, which can be explained by the traditional comparative advantage of its international division of labor. However, the production of high-tech products is very different, economies of scale, incomplete market competition constitutes the main reason for the international division of labor. Especially now in the international trading system, transnational corporations are expanding the scale, the status of the rising, a country, an enterprise alone to produce a certain phenomenon of high-tech products is very rare, the international division of labor determines a product of different parts and components will be produced by different enterprises and even different countries, and it is this mode of production so that the technology-intensive products to the intra-industry trade is dominated.
Since the mid-1990s, many people have questioned the outward-oriented economy of the Pearl River Delta (PRD), due to the over-representation of the processing trade and the predominance of intra-industry trade in foreign trade, with local enterprises only receiving a small amount of processing and assembly fees, and with no real improvement in technological level and international competitiveness. From the study of this paper, these doubts are not well-founded. At least in comparison with India and Eastern Europe, the proportion of intra-industry trade in the PRD is not very high, and is even the lowest among the three regions. More importantly, the labor-intensive industries that started to develop from processing trade in the 1980s have gained high international competitiveness and have gained a foothold in the international market, which in turn has led to the development of related industries, and the international competitiveness of the local enterprises has been continuously improved, forming a virtuous circle (Yao Yang and Zhang Ye, 2007).
(C) Export structure similarity index
We calculate the export structure similarity index of the PRD region, India, and Eastern Europe with the United States and Japan, and the comparison with the developed countries, which can be a good reflection of the stage of an economy, and we also calculate the export structure similarity index of India and Eastern Europe relative to that of the PRD.
From Table 4, we can see that compared with the export structure of developed economies, India has the lowest similarity and is at the lowest stage of development. Comparatively speaking, India's export similarity index with the United States is higher than that with Japan, which may be due to the fact that India and the United States are both large economies with low industrial concentration of export commodities, while Japan pays more attention to the development of high-tech industries. The similarity of export structure between the PRD and the United States and Japan is around 0.35, with a slight downward trend, which should be related to the industrial division of labor in China's regional economy. The Pearl River Delta region as a regional economy as a whole to participate in the world economic competition at the same time, but also a very important part of the entire Chinese economy, in China's industrial layout has a specific positioning, and can not be the same as a country to require a full range of industrial categories, which makes the Pearl River Delta region and the United States, Japan's export structure of the similarity between the lower. Eastern Europe is a larger regional economy composed of countries and is at a higher stage of development, so relatively speaking, its export structure is more similar to that of the United States and Japan. In addition, we also analyze the similarity between the export structure of India and Eastern Europe and that of the PRD. The similarity between the export structure of India and that of the PRD is low and shrinking. In fact, this can also be seen from the previous export structure, in which India's exports are more and more biased towards resource-based and labor-intensive products, while the PRD's exports are more and more biased towards high-tech products. On the whole, the PRD region has a greater advantage over India, and this advantage is still expanding, but there is still a certain gap with Eastern Europe.
(IV) Comparative Analysis of Major Trading Countries
Table 5 lists the major trading partners of the three regions in 2005. The PRD's foreign trade is mainly realized through Hong Kong's re-exports, with Hong Kong and the United States as the main markets for exports, and imports basically coming from Hong Kong. in 2005, the PRD's imports and exports amounted to US$182.3 billion and US$223.8 billion respectively, while imports and exports to Hong Kong amounted to US$148.0 billion and US$135.5 billion respectively, which demonstrates the important role of Hong Kong in the PRD's externally oriented economic development. This shows the important role of Hong Kong in the development of the PRD region's export-oriented economy. Since the main destinations of Hong Kong's re-exports are the United States, Japan, South Korea and the European Union, we can assume that the most important destination countries for PRD exports are still the United States and Japan. India's exports mainly go to the European Union, the United States and the Middle East. India's exports to the U.S. are mainly raw materials and primary processed goods, while the PRD's exports to the U.S. are basically machinery, electronics, precision instruments and other products, and the competition between the two regions in the U.S. market is very small. In addition, India and the Pearl River Delta region to the European Union exports are mainly labor-intensive products, there is a certain degree of competition.
Eastern European goods are basically exported to the EU countries, the United States, Japan and other markets are very weak, in the United States, East Asia, Southeast Asia market and the Pearl River Delta does not constitute competition, but in the EU market and the Pearl River Delta's competition is very large, the two regions to the EU exports of goods isomorphism is relatively strong, which may be the Pearl River Delta region, the main reason for the delay in the development of foreign trade in the EU market effectively. This also explains why all along, relative to the United States and Japan, China and the European Union economic and trade relations are developing more slowly, in addition to the higher threshold of access to the European Union market, the competition in the European Union market is very large is an important reason. The European Union and the United States is different, the United States is a unified market, the labor force can be completely free flow, the level of economic development of the country is relatively balanced, while there are dozens of countries in Europe, including different levels of economic development, the countries and regions of the factor prices and production costs are not the same, and can produce different technical levels of the product, which makes China's products in the different levels of the face of greater competition, and it is difficult to open the EU market.
V. Conclusion and Expansion
This paper analyzes the development of foreign trade between the Pearl River Delta (PRD) region and India and Eastern Europe in detail from 1995 to 2005. (1) India's export structure is still very backward, dominated by exports of resource-intensive and labor-intensive products, and has remained almost unchanged for more than a decade. The export structure of the Pearl River Delta has been greatly improved, and the export commodities have shifted from mainly labor-intensive products to mainly technology-intensive products, while at the same time, the labor-intensive products also continue to maintain strong competitiveness. Eastern Europe is affected by its own industrial structure and the division of labor within the European Union, with capital-intensive products and labor-intensive products exports. (2) The analysis of comparative advantages shows that the PRD has a big lead over India, which mainly comes from technology-intensive industries, while Eastern Europe has a certain lead over the PRD in capital-intensive heavy industries. (3) Relative to Eastern Europe and India, the PRD's intra-industry trade index is relatively low, especially the labor-intensive industries already have high international competitiveness, and the proportion of intra-industry trade is very low; the proportion of intra-industry trade in India and Eastern Europe has risen to varying degrees, especially the proportion of intra-industry trade in the capital-intensive industries has risen more rapidly, and the two regions still need to import large quantities of advanced production equipment, and have their own advanced production equipment, which they are not able to import, when they are exporting heavy industries. The two regions in the export of heavy industrial products at the same time, still need to import a large number of advanced production equipment, its own technical level needs to be improved. (4) Comparison with the export structure of developed countries shows that India is at the lowest stage of development, while the gap between the Pearl River Delta and Eastern Europe still lies in capital-intensive heavy industry. (5) In the international trade market, the competition between the Pearl River Delta and India is relatively small, and the export structure of the two regions is very different, while the Pearl River Delta and Eastern Europe in the European market isomorphism of export commodities is very strong, and there is greater competition.
All the conclusions in this paper are only based on the analysis of international trade commodities, and reflect only the differences in the structure of foreign trade and foreign trade competitiveness, rather than reflecting the international competitiveness of the three regions as a whole. The PRD is a typical externally-oriented economy, and the development process of India does not emphasize too much on the introduction of foreign investment and is not too dependent on the international market, while the development of Eastern Europe is "both internal and external", and this difference in the mode of development will affect the conclusions of this paper to a certain extent. The Pearl River Delta (PRD) has accumulated a certain economic strength after nearly 30 years of development, and the upgrading and transformation of its industrial structure is now an important issue. The PRD's economic development is highly dependent on foreign trade, so it is necessary to understand in detail the development history and current situation of its competitiveness in the international market, and to make a comparative analysis with its major competitors. This will help the formulation of policies related to foreign trade and industrial restructuring in the Pearl River Delta (PRD) and realize the continuous improvement of the international competitiveness of the PRD region and the sustainable development of the economy. On the whole, this paper discusses the structure and competitiveness of foreign trade of the Pearl River Delta from a macro point of view based on trade commodities, and the corresponding policy implications are only in terms of macro development strategies. In fact, we may pay more attention to the external competitiveness and structural adjustment of certain micro-industry levels, which is also our next step.