Foreign Trade On The Evolution Of China's Industrial Structure

With the continuous growth of China's foreign trade and the gradual improvement of trade status, foreign trade will surely have an important impact on the domestic economy grow, especially on the evolution of China's industrial structure. But the level of our country's present industrial structure is still not high. It displays that the development of various industries is not balanced, in particular the industry's internal development is uncoordinated, and the level of development is also relatively low. Therefore, how to use foreign trade to promote the growth of China's industrial structure becomes an important issue. Since the domestic and international research in this area is limited, it is very important to explore the mechanism of the evolution of China's industrial structure promoted by foreign trade.By the methods of the theoretical and empirical analysis, the paper explores the impact of foreign trade on China's industrial structure evolution. On the basis of the literature research in the theoretical research, the paper builds dynamic factors of supply and demand model to study the mechanism of the industrial structure evolution promoted by foreign trade. Concretely, foreign trade promotes the evolution of the industrial structure through supply-side constraints, that is changing natural conditions and resource endowment, promoting scientific and technological advances, changing the system and imparting information, and demand-side changes, that is guiding the consumer demand and triggering investment. The process of empirical research is that, firstly the paper measures the evolution of China's industrial structure with the indicator of the rate of change in industrial structure. Then the paper chooses technological progress and investment demand changes from the supply and demand side separately in the dynamic factors of supply and demand model, and uses least squares and Granger causality test to analyze the relationships of technology, investment, industrial development and foreign trade. And the results show that foreign trade gives impetus to the evolution of China's industrial structure though promoting scientific and technological advances and triggering investment.