In Sino-American trade conflict, protectionism has led to magnanimously missing traditional trade. Modern Leontief Paradox declared the rate of capital and labor between China and US is opposite to the forecast from the comparative advantage and factor proportion theory. The source of protectionism concentrates on scale of trade. This paper tends to explore institutional effect to trade upgrading which benefits trade facility.
Based on the strong evidence of the dramatical development of e-commerce, China‟s foreign trade has been facing dynamic energy conversion and become the first biggest with the highest level of globalization. According to data from ITU, China has more online shoppers than the US, United Kingdom, and Australia combined. Today China has 105 comprehensive pilot zones for cross-border e-commerce(CBEC) across the country, covering 30 provinces, autonomous regions and municipalities, which has brought great transition of trade patterns and related factor proportions.
At the same time, China has 18 nationwide free trade zones (FTZs). In this paper, we analyzes the heterogenous community effect of the linkage effect of China‟s double pilot project of CBEC and FTZs, which will creat more overlapping demands, effective price and labor market management, as well as ecological trade patterns through transition of value-added product space. This paper makes a systematic analysis on the network effect and linkage effect of double pilot projects to value-added product space, which lead to multipolar innovation leadership and promote transformation and upgrading of China‟s economy from the perspective of integration of domestic and foreign trade channels.
Keywords: linkage effect; heterogenous community effect; trade upgrading; value-added product space
E-commerce, Free Trade Zone and the Linkage Effect to Trade Upgrading.pdf