Research On The Influential Factors Of Resource And Labor-intensive Products Trade Between China And EU

China and EU are the largest developing country and economy,respectively,whose bilateral trade is of vital importance to the both.The relationship between China and EU is now one of the most comprehensive in cooperation and the most potential bilateral relationships in the world.For more than 40 years since the establishment of diplomatic ties between China and EU,through the continuous deepening of China-EU economic and trade relations,EU has become China’s largest trading partner for 10 consecutive years,and China has become EU’s second largest trading partner for 11 consecutive years.However,with the deepening and development of China-EU bilateral trade cooperation,trade imbalance still exists in China-EU bilateral trade.This paper firstly illustrates the current situation of China-EU trade and explores the situation of resource and labor-intensive products in China-EU trade by analyzing trade structure,and using trade gravity model from resource and labor-intensive products,capital and technology-intensive products level and the total China-EU trade of the import and export level to research,and comparing the similarities and differences of the impacts of all the variables between resource and labor-intensive products,capital and technology-intensive products and the total trade level.The empirical analysis of those influential factor is based on a lot of research on the import and export trade volume between China and 24 EU member countries from 2004 to 2016,using panel data,with China and EU GDP,geographical distance,per capital income gap,foreign direct investment as well as exchange rate between the two countries included in the trade gravity model.The conclusion of the empirical analysis shows:the GDP of both China and EU have a positive impact on the import and export values of resource and labor-intensive products,which means the GDP growth of the two countries plays a significant boosting role in the growth of bilateral trade value;per capital income gap of the two countries and the exchange rate between Euro and RMB are also positive factors for the trade surplus of resource and labor-intensive products,in other words,the decrease of per capital income gap and the improvement of the exchange rate against Euro will effectively reduce the trade surplus;direct investments from EU make little difference on the trade surplus,and the effect of geographical distance is not significant.At the end of the article,based on the results of trade structure analysis and empirical research,the following policy recommendations are proposed:(1)Improve China-EU trade structure and promote China’s import of high value-added products;(2)Keep the RMB exchange rate basically stable at a reasonable and balanced level;(3)Encourage Chinese enterprises to independently innovate and increase the added value of export technology products;(4)Directing the EU’s foreign investment to shift to resource and labor-intensive products.