Factors Affecting China’s Trade In Goods Exports

The economic development of many countries shows that export trade which is one of the troika stimulating economic growth plays an extremely important role in the process of a country’s economic development.Traditional international trade theory suggests that a country in the process of participating in international trade can not only get access to the Gains from trade but also improve the level of economic development and increase the national welfare. We are also dependent on export trade to get a foothold in the worldwide economic competition. However, what exactly are the factors that have an impact on export trade? The most visual manifestation of a country’s exports is the trade flows with its trading partners, and the most effective and authoritative empirical method to study trade flows is the Gravity Model. At the same time, the economic system is complicated, any seemingly unrelated factor could affect the system and interfere with the empirical results. Taking China’s export trade as a principal study as to explore the endogenous factors affecting China’s export trade, the unilateral form of gravity model seems to be an excellent choice. In recent years, China’s trade has been a surplus, as trade in goods still remains the main form of trade in our country, the trade exports of goods has become the focus of academic study. Variables in linear regression model are so associated with each other that with the introduction of more variables, the model gradually loses effectiveness. Among the many factors that affects China’s exports, which factors are capable of resisting interference and firmly affects the trade export volume should be an urgent issue to be studied. And extreme boundary Analysis (EBA) method can filter out the robustness ones.Based on 16 variables of the 2003-2013 provincial panel data, this article makes the empirical test on the factors affecting trade export volume of China by extending the trade "Gravity Model" introducing the extreme bounds analysis (EBA) method. The conclusion indicates that foreign direct investment (FDI), imports, industrial output, fixed-asset investment (FAI), tax revenues, research and experimental development expenditures are the "robustness" factors affecting China’s trade export volume. In view of the significant influence factors, relevant policy recommendations have been made at the end of this article:China should balance the absorption of foreign capital, pay attention to the introduction of technology, optimize the structure of export commodities, trengthen the construction of logistics system and optimize the industrial layout, etc.