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

The effect of international trade on income distribution of a country is a theme of great interest in economic research. Trade liberalization has important impact not only on the whole level of welfare of a country but also on the framework of income distribution, which is also an important factor in economic growth. Only when it brings benefits to the vast majority of people, can international trade be integrated into a long-term sustainability of the development process.Study on this respect is meaningful for China too. China now is undergoing a critical period of transition and it is facing a lot of problems including those with income distribution system. One is the dramatically enlarging gap between rich and poor since China's opening to the world and rapidly increasing foreign trade. Therefore, a study on the effect of China's foreign trade on its income distribution is empirically needed. The significance lies not only in maintaining social justice, but also in the big opportunity for China to pursue sustainable economic and social development.Papers principal method: On the basis of International trade theory and research, An empirical analysis to examine the impact of international trade on China's income gap, The import and export volume with the use of GDP as the explanatory variable ratio, And the income gap between urban and rural residents to the national income gap correlation analysis, then draws the conclusion. This paper adopts an econometric model, analysis, macroeconomic analysis and microscopic analysis, the method of combining theory and practice.The paper main innovation lies in: Selects 1978-2005 data, uses the opening degree, the tertiary industry technical progress factor, the tertiary industry employment population accounts for the national labor force population the proportion, the inhabitant expends the price index, the per capital GDP, the government finance uses in the agricultural disbursement, the population natural rate of growth, the agricultural population proportion took the analysis target. The result indicates that foreign trade is helpful to reduce income gap between national as well as urban and rural residents.