Financial Development Impact On International Trade

The products'factor and capital elements is overall and free flow and re-configured started in the current global economic, It is make that economic of all countries' regions around the world were closely linked their economic develop with their external economic development. The financial and trade develop are been the "core" and "engine" of modern economic develop. However, in, There are few economic theory discuss the finance and international trade relationship between these two theories. That is financial develop theory only few research financial development's impact on international trade theory; International trade theory there was few theories to discuss the impact on the financial development. But more realitic economic fact prove that there is exist one relationship between financial development and international trade. Similarly, there are two branches of international economics, that were microeconomics and macroeconomics, microeconomics which focuses on study of international trade theory, macroeconomics research focuses on the theory of financial development. However, in the framework of international economics, these two disciplines should not be separate discipline sole, must be a harmony organic development between these two, but also there must be some degree relationship of logic. According to this view to thinking, get rid of research perspective to all countries'financial development on the impact of international trade around world, Use the 31 provinces research financial area to study region trade impact, trying to draw relevant conclusions to prove significant guide and a new perspective for the provincial governments monetary policy or trade policy in the future development of our country, and bring the largest force for region's economic growth.This paper is divided into five parts, the first introduce the topics of the paper background and significance of the topics, nation and abroad research status, the lack of innovation, research ideas and the basic framework. The second part introduces the theories of financial development and economic growth, the relative mechanism theories between financial development and relative international trade theory. Financial development can promote international trade, such as financial development can optimize the trade structure, bring large scale economies, decentralized trade risks, and bring negative impact by interest rate control systems, credit control systems and exchange control systems. The third part describe Chinese regional finance and regional trade develop status, characteristics and future trends, and use the Theil index to working out the internal develop differences between eastern, central and western China and their provinces, working out China's financial and trade evolution with each other and based in typically Shanghai, Guangdong regional perspective to analysis regional financial how impact regional trade. The fourth part is the empirical part, We first accord this paper have established region develop differences in financial development indicator system integrated with AHP and hierarchical cluster analysis to classify China's 31 provinces region, and break the traditional eastern, central and western region boundaries. According above conclusions apply data panel model empirical methods research all areas of financial develop impact on the regional trade. The fifth part is the conclusions' summary of this paper and put forward relevant suggestions.Can be drawn from this paper study, whatever financial development without direct and rich theoretical research the impact on international trade, but we can find relatively basis of their theories in financial development and economic growth theory study. Not only that, we also obtained the financial develop mechanism how impact international trade. Then found out there are long-run equilibrium relationship between the development of financial development and trade via empirical research, that is a high level of financial development in the area, the financial development shall have higher influence to the development of regional trade; the other hand, low level financial development area will with lower influence on the regional trade financial development. Based on the above empirical results, this paper from macro and micro perspective on regional propose financial development and trade development policy recommendations.