Study On Foreign Trade Effects The Economic Growth In Fujian, And Strategies

Since the reform and opening up, the development experience has confirmedthat international trade has been boosting economic growth in Fujian. And thedistribution of trade benefits can be explained by the terms of trade. This articleinterprets the relationship between international trade and economic growth from theperspective of the terms of trade. In addition, this paper uses qualitative andquantitative analysis by the means of the general equilibrium model and theeconometrics regressive method.This paper is divided into six chapters. The first chapter is an introduction. Itincludes the background and significance of the topic, the thought and the methodand so on. The second chapter is literature review. It introduces the study situation ofterms of trade and the relationship between foreign trade and economic growth. Thethird chapter analyses the change of the terms of trade and calculates the NBTT andthe ITT from1990to2009. Meanwhile, this chapter analyses the trend of the change.The analysis result shows that in Fujian the NBTT is deteriorating while the ITT isimproving. We find the reasons for deterioration of the price terms of trade are asfollows:(1)a change in the supply and demand of the import and export products;(2)a change in the structure of export products;(3)export enterprises facing harshmarket environment;(4)the impact of foreign direct investment;(5) the impact of tariffreduction after entering WTO. The improvement of the income terms of trade is dueto the continuous growth of exports in Fujian. The forth chapter describes theinteraction between terms of trade and economic growth and analyses the statuswhere the coexistence of worsen price terms of trade and economic growth bygeneral equilibrium model. The fifth chapter is an Empirical analysis on terms of tradeand economic growth in Fujian. It uses the econometrics regressive method to studythe relationship between NBTT and economic growth and applies Granger testingmethod to reveal the causality between the two. The result of the study shows thatthere is stable relationship between them: the economic growth has a short-termeffect on the NBTT; NBTT affects the economic growth in the long term. Chapter sixis policy recommendations. According to the situation of Fujian, it puts forward somesuggestions improving NBTT and the mode of foreign trade.