Study On The Influential Factors Of China’s Foreign Tobacco Trade Fluctuation

China is a superpower in tobacco production and marketing, and the smoking populationaccounts for25%of the total in the world, but not tobacco powers. There is a big gap in sizeand influence compared with some developed countries, such as Britain, the United States.China’s tobacco foreign trade shows an upward trend from1995to2010. Import tradeexperiences5cycle fluctuations, including4classical and1growth fluctuations, while exporttrade experiences3classical and3growth fluctuations in respectively. Trade fluctuationanalysis shows that the cycle becomes shorter and amplitude decreases. What factors affectChina’s tobacco foreign trade fluctuation? In the circumstance of global tobacco control, howto make tobacco foreign trade fluctuation stable, or make long-term growth fluctuations? Thisis the key to promote China’s tobacco industry in the international competition, and it is alsopurpose of the paper.The article applicants the fluctuation theory of economic cycles to foreign trade intobacco industry using qualitative and quantitative methods, and the factors of tobacco foreigntrade fluctuation are analyzed. Firstly, Keynesian Business Cycle Theory and its fluctuationconductivity theory are integrated with econometric model based on the review of thefluctuation theory of economic cycles. Then the application framework of the full text is built.Secondly, changes of trade volume and competitive advantage of foreign trade are comparedfrom two angles of import and export. Combined with the constant market share model, theeffect of decomposition is analyzed based on the data of China’s tobacco import and exportfrom1995to2010. The empirical results show that the competitive effect and structural effectare the two most important impacts to China’s foreign trade fluctuations. Then the two effectsare detailed analyzed using the economic models. In the competitive effect, the dominantfactors affecting foreign trade are analyzed quantitatively using the gravity model. While inthe structural effect, investigation on the consumer’s effective demand is made from the viewof the tobacco market, which is essential to improve China’s tobacco foreign trade.The results show that the global tobacco control, joining WTO and the other changinginternational situations are most important factors which affect the fluctuation of China’stobacco foreign trade. In addition, as China exports tobacco to many countries, theanti-smoking law has not yet caused great negative impact to export fluctuation. The marketpotential for development of tobacco trade is relatively large, but there exists a phenomenonof over-trade to some countries. In the consuming market, smokers feel disgusted to price rise.A majority of consumers think that rise which is due to increasing tax will reduce consumers’demand in the market, but if it is to improve quality, they will accept it.This paper argues that China’s tobacco fluctuation in foreign trade affected by theopenness of the market, level of economic development, position of foreign trade and so on.Chinese government should increase the intensity of macroeconomic regulation and control,strengthen the regulation of tobacco price, give full play to the leverage of price, and optimizethe tobacco trade structure, enhance the share of tobacco products in the foreign trade. Inaddition, China should speed up economic reform, strengthen tobacco harm reduction scienceand technology research to improve product quality and influence, so that China’s tobacco industry will maintain long-term development sustainable and stable in the internationalmarket.