The Influential Studies Of Foreign Trade, FDI To Urban Rural Income Gap In Pan-pearl Delta Region

Since the reform and opening up, many areas in China are open to the world，China’s economic system gradually changes, and China’s economic development hasbeen promoted greatly. Attendant, the polarization between rich and poor begins tohighlight, and income distribution concerns the healthy operation of the economy，social harmony. Therefore，it gets widely attention.Along with the pace of economic globalization, and regional economic graduallybecomes a trend, since Pan-PRD’’9+2’’ economic zone has been proposed in2003，alarge number of foreign capital inlfow，and foreign trade volume surges. This paperaims to study the impact of the foreign trade and foreign direct investment on theincome gap in Pan-Pearl River Delta area. First, on the basis of referencing a numberof documents about income gap, and views of the domestic and foreign scholars canbe summarized as the concept of economic growth and foreign dependency concept,and we consider that the foreign trade and foreign direct investment are the two mainreasons for the income gap between urban and rural areas, in accordance with theactual situation in China. Second，this article makes a theoretical analysis of themechanisms on how the foreign trade and foreign direct investment affect income gap,and the foreign trade influences the income gap through the factor price mechanism,changes in technology and demand preferences mechanism, and the foreign directinvestment influences the income gap through Technological spillover mechanism andemployment mechanism. Followed, we analyze the current situation of foreign tradeand the introduction of foreign capital of the Pan-Pearl River Delta region. Thisarticle selects the mainland nine provinces of the Pan-Pearl River Delta Region andcollects data from the year of1990to2009，then, we make a empirical analysis of therelationship between foreign trade, foreign direct investment and the urban-ruralincome gap, and empirical results show that the development of foreign trade hasexpanded the income gap between urban and rural areas, foreign direct investmentwidens income gap between urban and rural areas, but not statistically significant.Finally, this article puts forward policy recommendations on how to improve theurban-rural income gap in the Pan-Pearl River Delta region，combined with the results of study, from the angle of the structure of foreign trade, foreign direct investmentintroduction, human education, government policy.