Analysis Of Chinese Factor Market Distortions Affect Export Trade Growth

The Present research shows that distortions exist in the market of China during the transition period. But factor market distortion is the most significant in the whole market. In the stage of reform, although our products market is almost fully liberalized, the factor markets remain seriously distorted. This distortion tends to depress the factor prices and reduce the production costs, Under the interplay of the two, The production of motivation is positive stimulated, return on investment is also improved, and thus the international competitiveness of our products is enhanced, all of which stimulate the export trade of China.Based on Literature review, this paper start from typical fact of the factor market distortions and perspective of factor price distortions, using micro data of China’s industrial export enterprise from1999to2007for re-examining the export behavior of enterprises in China. First, this paper makes an empirical measure about factor market distortions separately from the provinces, regions and ownership by the production function; On the base of analysis on influencing factors of export trade and distribution of export, the paper makes an empirical research about the relationships between the growth of factor market distortions and export trade. Finally, the paper draws conclusions and suggestions on the factor market distortions and export expansion from a practical level.It adopts the method of combining theory and practice, and puts forward a new perspective on the relationships between the growth of export trade and factor market distortions. On the basis of various factors, this paper analyzes the factor market distortions impact on China’s export trade growth by a series of econometric models from different angles. In general, negative distortions of factor price in China’s enterprises can promote the growth of export trade. Specifically, factor market of China’s industrial export enterprise has serious distortion and tends to increase; the level of factor market distortion in the eastern region and foreign-funded enterprises is highest, and influence on export trade growth is positive, In other words, the greater factor market distortions the faster the export trade growth.This means that the factor market distortions are indispensable factors in creating China’s export miracle.