The Comparison And Analysis Of The Secular Trend And Short-term Fluctuations Of Import And Export Trade Of The Border Provinces

After entering WTO, China makes a great progress in economy and China also makes a great success in the foreign trade. As an important part in the foreign trade, the border trade plays a role in the local economy. Nowadays, China's government presents some polices which are good for the border trade of western province. However, the foreign trade development of China is unbalanced, and the eastern coastal provinces do better than the western border provinces. The gap of border trade between the eastern coastal provinces and the western border provinces is exist from 2005.Well, it is a pity that the existing paper rarely analysis the differences of border trade between the eastern coastal provinces and the western border provinces, to say nothing of the analysis of reason for the differences. The existing paper is also not very good in choosing the methods when study the international trade. In the light of above analysis, the paper try to build a RBC model based on Schmitt-Grohe(2003), in order to analysis the differences of border trade between the eastern coastal provinces and the western border provinces,and to explain the reason of the difference.In this research, firstly, I review some literature about international trade. Then I keep the eyes on the literature of border trade. After redefine the "border trade", I introduce some basic theory about the RBC model. Secondly, based on Schmitt-Grohe (2003)' research, I provide two improvements and build the RBC model which is used in my paper. Last but not least, I use the model to analysis the difference of border trade between the eastern coastal provinces and the western border provinces, and I give my preliminary interpretation.I established a small open economic RBC model, and used the data from quarter 1,2005 to quarter 1,2015. Then we find that, in the short term, when got a influence, two area' import (export) move in the same direction.but the Midwest border provinces' import(export) move more. In the long term, the import (export) of Midwest border provinces grows more fast than that of the east coastal provinces. But the import (export) of Midwest border provinces is too small than that of east coastal provinces in the beginning.I also give my preliminary interpretation for my finding. Considering the marginal theory and the fact of China, I explain why Midwest border provinces' import(export) fluctuates more in short term,and why Midwest border provinces' import(export) increases more than east coastal provinces' in the long term.Consider my finding and explanation, I provide some suggestions for government to stabilize the border trade of two areas in the short term, and I also provide some suggestions for government to improve the border trade of Midwest border provinces in the long term.By the way, there may be two innovations.one is that I analysis and explain the difference of border trade between the eastern coastal provinces and the western border provinces specially. The other one is that I improve the Schmitt-Grohe (2003)'RBC model.