A Research On Effect Of China's Trade Structure Changes On It's Trade Balance

With the fast development of the opening up, China has made a magnificent progress in its foreign trade during the past thirty years. Meanwhile, foreign trade structure in China has achieved a high level, with a huge accumulation of favorable trade balance. It is presented to have a correlation between trade benefit and trade structure, in which the former is the dynamic of the trade structure adjustment, and the latter is the one providing fine conditions to gain favorable trade balance. Trade structure is affected by several factors such as production factors, technical progress, adjustment of industrial structure, fluctuation of exchange rate and trade openness. One nation may accomplish an evolution of trade structure by three paths of developing the comparative advantage, transforming the constitution of production factors and make a full use of endogenous technology progress, to have an impact on variation of trade balance through direct effect and indirect effect. It makes a sense of theoretical value and practical significance to have an eye on the trade structure and its influence on the trade balance.This paper aims to make a research of structure factors and its impact brought on the trade balance, and then approach to a discussion of the inner link between trade structure upgrade and trade balance, with the starting point of trade structure variation.This paper puts forward to summarize trade structure and international trade balance in the theoretical field firstly. Based on that, a systematic analysis in effect factors, upgrade path and action mechanism of how structural change affect on trade balance is put into research.What is more, it gives an introduction of fundamental condition of trade structure in China from three aspects, commodity composition of trade, mode structure of trade and region structure of trade, upon which a deep exploration is given to analyze the variation and structural characteristics of trade balance in China. Consequently, a study into the cointegration relationship between trade structure and trade balance in China is demonstrated, which turns out that there is a positive correlation among relative price of capital-labor, relative scale of capital-labor, technical progress efficiency and trade balance index. Finally, some suggestions are mentioned to help to optimize trade structure in China.