Research On China's Structural Foreign Trade Imbalance

China's foreign trade have been continuously surplus since 1994. With the entry of WTO, the increase of trade surplus has accelerated more apparently. Meanwhile, the trade friction between China and its major trading partner intensifies. At Present, not only academia but also government and enterprises are concerned with the problem how to dealing with the trade imbalance of China. By examing the characteristic of the trade surplus from the aspects of geographic direction, merchandise structure, trade pattern, enterprise type and regional structure, we know that China's foreign trade is in a state of structural imbalance, which is hard to explain by the traditional trade theory. These characteristics appearance with its deep-seated reasons, which reflect the changes of international divide and trade patterns. Although the factors such as exchange rate, trade policy and saving rate have affected China's trade balance to some extent, they are hard to explain the structural characteristic of China's surplus.The dissertation tries to improve the informed research and study the reason and mechanism of China's trade imbalance from the perspective of FDI inflows and the change of international division of labor. Driven by advances in technology, the process of economic globalization has speeded up significantly during the past 20 years. Economic globalization has led to the factors and resources allocated all over the world, and accelerated the elements of resource flows between countries, which means the division of labor had developed to the stage of division within industry. In the context of worldwide industry structure regulation and international industrial transfer, large sums of FDI inflows into China. FDI can generate trade diversion effect, trade creation effect and import substitution effect, which directly or indirectly expand China's trade surplus. We find that the continuous increase of FDI is the basic reason of China's structural trade imbalance.Then we analyze the effects of FDI on China's trade balance by constructing a trade gravity model. The empirical results show that FDI and the trade volume as well as the balance of trade of foreign invested business are in positive correlation respectively, and the relative trade surplus in the central and western reglions is larger than which in the east region. We also test the technology spillover effect of FDI, and the result shows that FDI promotes China's technological progress and expand the trade surplus indirectly. However, this effect is not very significant.For the understanding of China's trade balance, we should pay more attention to the structure of trade imbalance and the affordability of imbalance. This dissertation makes a further analysis through nationality comparison and measure of the relative size of China's trade balance. It turns out that China's trade surpius is in a normai range, which is a necessary consequence of its economic growth and foreign trade development. In the framework of the existing system, With the inflow of FDI and the shift of manufacturing capacity from U.S. and E.U. to China, China will maintain to be the world manufacturing center, and the status of surplus will continue. The empirical analysis indicates that the traditional policy instruments such as exchange rate may fail in adjustment of the trade imbalance. So we should try to solve the problem of trade imbalance from a structural perspective.