Research On The Interaction Between China’s Trade And The Industrial Structure Changes

In an open economy, the stable and healthy development of a country or region relys on the coordinated development of the industrial structure of internal and external trade structure. A country’s international trade effect its industrial structure by both exports and imports. In exports, international trade significantly expand the market size of the domestic manufacturers faced. It is conducive the domestic industry played economies of scale, promote industrial development. It can directly improve the level of domestic industry, promote the adjustment of industrial structure by importing and absorting foreign advanced products, skills, machinery and equipment. The industrial structure of a country determines the country’s competitiveness on the international market fundamentally. Different resource endowments of different countries, resulting in differences in national industrial structure, industry structure differences determine differences in comparative advantage, comparative advantage differences determine the trade structure, thus affecting the growth of trade. So, in an open environment, the industrial structure is the basis of trade structure, trade structure and industrial structure is reflected in international competitiveness.China, as an important part of the world economy, has become the world’s second-largest trading nation, economic development has been inseparable from the support industry and trade. Chinese industrial structure and trade structure uncoordinated development effect our economic. It became a key factor restricting China’s economic development. Therefore, this study of the relationship between trade and industrial structure changes has an important theoretical and practical significance.This paper based on existing research, drawing on indicators of the industrial structure upgrading and rationalization of the industrial structure which presented by Chunhui Gan, takes the 1991-2012 annual inter-provincial panel data, and makes some empirical tests of the relations between international trade and industrial restructuring by using the static panel data model and PVAR model. The empirical results show that, in the long run, there is a mutual promotion between China’s trade and industrial structure rationalization changes, there is a inhibiton between trade and industry structure upgrade. In the short term the growth of trade will hinder industrial structure rationalization, and rationalization of industrial structure will promote trade growth. There is a negative relationship between international trade and upgrading the industrial structure.