ABSTRACT

Input-output method has been commonly used in the literature to measure international degree of fragmentation in the production of our manufacturing industry (Zhao lei and Yang Yonghua, 2011). Due to the unavailability of the key variable-the intermediate input amount of data-the intermediate goods imports were assumed, that is, the proportion of industry’s total import of intermediate products is equal to the import of k industries. There are some deviations from the intermediate input the actual situation of various industries. Therefore, the input-output method to measure the true degree of international fragmentation of China’s manufacturing production has its limitations. Therefore, this article uses the data of processing trade which is relatively easily available to measure China’s manufacturing industries’ international fragmentation of production.