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The Cause Of China's Foreign Trade Friction Analysis And Countermeasures Should Be Taken

Posted on:2013-01-22Degree:MasterType:Thesis
Country:ChinaCandidate:C N XiangFull Text:PDF
GTID:2249330362969197Subject:World economy
Abstract/Summary:PDF Full Text Request
China has been in the teeth of the storm of international trade frictions in recent years. Causes of trade frictions and measures to deal with them have aroused wide concern of scholars both at home and abroad. On the basis of previous views and arguments, the paper makes exploratory research on the cause of China’s foreign trade frictions from the perspective of trade dependency. What’s more, with the elimination of the incentive for trade frictions as the point of penetration and combined with the history and present national conditions of China, the paper comes up with specific strategies to resolve trade frictions as well.Firstly, based on the overall understanding of the traditional international trade theory, the concept of international trade frictions is clearly defined that once the balance of trade welfare Pareto is broken, the international trade friction turns up. Given historical data of the global trade remedy investigation, five major characteristics of China’s foreign trade frictions are summarized. Meanwhile, with the Trade Intensity index, the quantitative tool, we find that the trade interdependence between China and major trading partners is asymmetric. And the following Granger causality test shows that asymmetric trade dependency is a requirement for China’s foreign trade frictions. Further, we use the bargaining model of Rubinstein and welfare distribution model to explore and analyze the cause of China’s foreign trade frictions and eventually make the conclusion that the asymmetric trade interdependence between China and major trading partners is the potential incentive for China’s foreign trade frictions.In the last part of the paper, the relationship between the asymmetric trade interdependence and the foreign trade structure of China is discussed firstly. Then the comprehensive analysis of characteristics of China’s foreign trade structure reveals that it is in the bottom of the global value chain that major export industries of China lies which results in the high dependence on major trading partners. Under such circumstances, China should adhere to the principle of the optimization of the trade structure by upgrading the processing trade, improving the trade in service and enhancing the strategy of diversification of export markets. Only when the optimization of China’s foreign trade structure comes true, could China’s foreign trade frictions be resolved effectively.
Keywords/Search Tags:Trade frictions, Distribution of Welfare, Interdependence, Structure
PDF Full Text Request
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