Empirical Analysis On China's Labor Efficiency Factor Terms Of Trade

The crucial topic that whether china is undergoing an immiserizing growth process have drawn increasingly greater attention of foreign and domestic researchers. Since the terminology trade term was invented, it has been bonded with immiserizing growth. Therefore, one very important approach of measuring China's benefits in international trade is to track the trade terms.The analysis of this paper demonstrates the limits of traditional Net Barter Terms of Trade (NBTT), Income Terms of Trade (ITT) and Factor Terms of Trade (FTT). However, when the variable of wage level is covered, it effectively puts labor factor cost, a key factor, into the research model so as to better represent China's position in international trade .The empirical result shows, against the continuous deterioration of the NBTT, improvement of the ITT and traditional Single Factor Terms of Trade (SFTT), China's Single Labor Efficiency Factor Terms of Trade (SLFTT) has to some extent increased during the fluctuation, the velocity of wage level change impacts profoundly on the indexes. The Double Labor Efficiency Fator Terms of Trade (DLFTT) shows China has comparative advantage over the USA, Germany and Japan in its bilateral trade with those three countries. But to Korea, one of China's main trading competitors, China is in a position of competitive disadvantage in most of the years.The academia has limited researches done on the influential factors of trade terms. However, to focus on the relevant influential factors can provide great guidelines for developing the strategies of China's international trade. Based on a review of related theories, this paper made an empirical analysis of the factors that influence the SLFTT. According to the backward elimination method from SPSS, after re-correction of the collinearity and serial correlation issues, and a regression analysis of the three factors, the result shows that FDI has positive influence on the index, but not significant. Labor productivity and wage level has positive and negative impact respectively on the index and the impacts are apparent. According to the empirical analysis and China's specific conditions, this paper proposed policy advices on improving China's SLFTT, such as to enhance the FDI utilization efficiency and take an objective and correct attitude towards the uprising of Chinese labor cost in order to strengthen China on a self-initiate innovation paths...