The Effect Of Process Of Urbanization On China's Balance Of Trade And Economic Growth

In a sense, the global economic imbalances, especially the Sino-US trade imbalance is due to insufficient domestic demand of China. For long-term economic development, China needs to change the export-dependent economic growth method and expand domestic demand to improve the trade imbalance. The way of stimulating domestic demand is mainly two aspects. One part of that is Government, the second is the private sector. The process of urbanization requires the government to increase infrastructure investment. At the same time, urbanization is conducive to increasing income levels. Under the conditions that the social security system continues to improve, the volume of command will significantly increase, which will contribute to economy growth and the rebalance of balance of trade.This paper uses the data of 1990-2009 to analyze the impact of the process of urbanization on China's economic growth and the trade balance.The empirical result shows that the process of urbanization is conducive to China's trade balance which is consistent with the hypothesis. However, the result showed that the impact of the process of urbanization on economic growth is not positive. This may be due to the conditions for which urbanization contributes to economic growth has not existed yet. When these conditions have not existed, if we carry out the construction of the city blindly, it will bring a negative impact on our economy.Under the situation of an increasingly complex and volatile international economic environment and adverse changes in the structure of China's population, in order to ensure that the Chinese economy will have a sustainable development, promote the process of urbanization is a very important initiative. However, it is not enough to use the process of urbanization only. At the same time, other related social services, both institutional mechanisms need to be improved constantly.