| Is there a link between financial development and international trade? Can one accelerate the development of another one? If the answer is yes, what are the means and mechanism by which the financial development can affect the development of international trade or the development of international trade can do to the financial development? All the questions above are hot points in recent research. Considering the situation of China, though both of above contribute a lot to the economic growth in recent 30 years, the financial department is still getting behind the requirement caused by economic growth. However, during this important transitional period, it makes sense to study on that how financial development can do to help China's industry to get more advantage.This article firstly sorting out the interaction mechanism on the theory of two-sector research and then taking data of China's industry in1984-2008 as sample, based on Panel data model, this paper makes an empirical study on the interaction between China's financial development and foreign trade. The results show that there exists a stable equilibrium relationship between financial development and foreign trade. Financial development has a significant impact on the foreign-trade growth of Industry, while the existing scale of the foreign trade of some industry also have marked impact on its new development on foreign trade. China should accelerate the pace of financial reform and innovation, so as to increase financial support for industrial development. |
