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Empirical analysis on intra-industry trade in textile between China and Vietnam

The total volume of import and export trades between China and Vietnam exceeded 723 billion yuan in 2018. A comprehensive analysis of the Sino-Vietnamese intra-industry trade in textile is presented. By calculating G-L index and Bruelhart index, this paper analyzed the current situation of intra-industry trade of textile between China and Vietnam. A regression econometric model was established to explore factors affecting the intra-industry trade of textile. The study shows that adjusting textile industry structure and optimizing trade environment between China and Vietnam, as well as strengthening trade liberalization, are of great significance for reference, and are beneficial to promoting coordinated and sustainable development of economic and trade between China and Vietnam.


Introduction
In recent years, trade cooperation between China and Vietnam has continued to deepen. As of 2018, China as Vietnam's largest trading partner has continued to make efforts to promote trade between the two countries for 14 consecutive years. According to the statistics of the Vietnam Textile Association, there are currently more than 4,000 textile enterprises in Vietnam, and the scale of the industry has expanded year by year. Therefore, textile trade plays a very important role in the economies of both China and Vietnam. At present, China's textile industry needs to seek new economic and trade growth points through transformation. During this critical period, China needs to strengthen cooperation with other countries to obtain more textile raw materials and products to meet what it needs. This paper believes that analyzing and studying the intra-industry trade in textile industry between China and Vietnam can not only promote the economic and trade development of the two countries, but also have certain reference significance for strengthening further cooperation between the two countries in other areas.

Analysis of the status quo of Sino-Vietnamese intra-industry trade in textile
China's overall import and export of textiles to Vietnam has shown a growing trend. During 2008-2017, the trade balance between the two countries has been positive, and the gap is getting bigger and bigger. It shows that China's export trade to Vietnam is greater than that of China's imports from Vietnam, that is trade is in an unbalanced state. Based on the product trade structure data, the

Sino-Vietnamese main textile G-L index
According to the data obtained in the UNCOMTRADE statistical database, the G-L index calculation and analysis of different types of textile trade between China and Vietnam were carried out, and the following results were obtained (Table 1). Table 1 In general, the difference in the level of intra-industry trade between yarn-based textiles and other types of textiles is still very high. The level of intra-trade trade in raw materials is maintained at a relatively high level while that in intermediate and finished textiles is low. This can explain to a certain extent that China's textiles mainly participate in the Sino-Vietnamese textile trade with the comparative advantage of lower labor costs. Although the import and export volume is large, the products are still mainly low-end.

Analysis of Sino-Vietnamese Textile Bruelhart Index
The difference between the Bruelhart index and the G-L index is that the Bruelhart index measures the dynamics of intra-industry trade based on trade flows, which makes up for the defects of the G-L index [1] . According to the marginal intra-industry trade index formula, the marginal intra-industry trade index of China and Vietnam textiles from 2007 to 2017 is calculated. From a dynamic perspective, it reflects the extent of the changes in the intra-industry trade of textiles at different times. The results calculated from the previous data are shown in Figure 1. As

Theoretical assumptions and variable selection
There are many factors affecting intra-industry trade. According to whether the various factors are quantifiable and whether sufficient sample size can be obtained, this paper finally selects and quantifies five influencing factors to measure the intra-textile trade between China and Vietnam.
(1)Differences in per capita income: The higher the per capita income level, the more obvious consumers feel about the differentiation of textiles, which will make the division of labor more refined.
(2) Trade imbalance: Therefore, this paper believes that the trade imbalance is negatively related to the level of Sino-Vietnamese intra-industry trade in textiles. This article uses China's Vietnam import and export textile trade balance (China's textile trade volume to Vietnam -China's textile trade volume from Vietnam) to reflect the textile trade balance between the two countries [2] . Area was officially completed on January 1, 2010. Therefore, it is assumed that the official launch of the China-ASEAN Free Trade Area is positively related to the level of Sino-Vietnamese intra-industry trade in textiles. This article sets this variable as a dummy variable [3] .

Model setting
Based on the data of 18 years from 2000 to 2017, the G-L index of textiles in the two countries is taken as the explained variable. Creating a double logarithmic model with the following model [4] : ln = C + β 1 ln 1 + β 2 ln 2 + β 3 ln 3 + β 4 ln 4 + β 5 5 + (1) y is the index of Sino-Vietnamese intra-industry trade in textiles, x 1 is the absolute value of the Per capita GNI difference between China and Vietnam.x 2 is the absolute value of the textile trade balance,

Model Analysis
(1) The difference of variable per capita income (X1) is positively correlated with the index of Sino-Vietnamese intra-industry trade in textiles, which is in line with theoretical assumptions that the degree of trade balance is negatively correlated withthe index of Sino-Vietnamese intra-industry trade in textiles. According to the results of the regression model analysis, the index of Sino-Vietnamese intra-industry trade in textiles will increase by 2.38 percentage points for every 1 percentage point increase in per capita income under the same other conditions. Therefore, increasing the difference in per capita income between China and Vietnam will promote the development of intra-industry trade between the two countries [5] .
(2) The trade balance (X2) is negatively correlated with the index of Sino-Vietnamese intra-industry trade in textiles, which accords with the theoretical assumption. According to the results of the regression model analysis, the index of Sino-Vietnamese intra-industry trade in textiles will fall by 1.20 percentage points for every 1% increase in the textile import and export balance between China and Vietnam. Therefore, in order to improve the level of textile trade development between China and Vietnam, it is necessary to reduce the trade balance between the two countries [6] .
(3) The market size (X4) is positively correlated with the index of Sino-Vietnamese intra-industry trade in textiles, which is in line with theoretical assumptions. According to the results of the