Analysis On Impacts Of China's Foreign Trade On Income Distribution Gap

The issue on foreign trade and our China's income distribution gap has been a theme of great interest in the field of international economics in recent years. China's foreign trade has experienced a sustainable expansion since the implementing of reform and opening up. However,with the rapid growth of foreign trade,China's income inequality has also been being increasing . Does the foreign trade have any influence on the country's income inequality level? If it does,how does the foreign trade influence the inequality?How much is the influence? These problems became the subject of our study. The significance lies not only in maintaining social justice,but also in the big opportunity for China to pursue sustainable economic and social development.On the basis of reviewing the theories of trade on income distribution thoroughly, This paper demonstrates the main mechanisms that foreign trade has influence on the country's income inequality: they are employment mechanism, technological progress mechanism, commodity price mechanism. Then we study the impacts of China's foreign trade on income inequality with much empirical analysis. We continued to empirical analysis when the foreign trade was subdivided into import and export trade. The results show that foreign trade widened the income gap in general, while the impact of the import and export trade were different.In trade and income distribution-related research,most of them attention to the gap between skilled labor and unskilled labor. But less from the perspective of factor endowment to test trade and domestic distribution of income by empirical research. This article will examine factor endowment into the system, we used the research methods of Spilimbergo etal (1999) for reference, and calculated the various regions'effective factor endowments . then we use of foreign trade, factor endowments and the income gap in China to conduct empirical analysis. The results showed that a variety of factor endowments had different levels of impact on income distribution gap, the impact of trade on income distribution was effected by the factor endowment differences.