Research On The Influence Of Trade Openness On China’s Residential Consumption

Since the reform and opening up,China’s residents’ material wealth and living standards have risen significantly,and economic development has made remarkable achievements worldwide.In the context of modernized market economy,the total consumption and the quality of consumption in China have been increasing,and the efficiency change of the consumption level of the residents has made an important contribution to the sustainable and healthy development of China’s economy,according to statistics,consumption has become the first contributing factor to promote China’s economic growth for seven consecutive years.As a basic economic activity for human survival and development,consumption plays a key role in constructing a new development pattern of domestic and international double cycle and promoting high-quality development of China’s economy.Under the new open development pattern of "all-round,multi-level and broad field",the factors of production in China are interconnected with other countries in the world with high quality,and the cross-border flow of various types of capital,technology,information and talents has promoted the efficiency change of domestic economic development.Therefore,the diversified product consumption channels brought by trade openness to the domestic market provide the possibility to raise the consumption level of the residents and achieve the upgrading of consumption structure.In this context,it is of great practical significance to explore the issues related to trade openness and China’s consumption,in order to identify the factors that lead to China’s consumption level,promote the growth of domestic demand and realize the domestic and international double cycle.The thesis reviews the theoretical studies on trade openness and resident consumption,and summarizes the theoretical mechanism of trade openness affecting resident consumption in three aspects: improving financial inclusion,increasing income and optimizing income distribution structure,so as to clarify the channels of trade openness affecting resident consumption.Subsequently,at the empirical level,the data Subsequently,at the empirical level,data from the three rounds of the China Family Panel Studies(CFPS)2014-2018 conducted by the China Social Science Survey Center of Peking University and macro inter-provincial panel data for the corresponding years were selected for the study.Firstly,a two-way fixed effects model is constructed to explore the effect of trade openness on China’s consumption level and structure.Secondly,the reliability of the baseline regression results is tested using the instrumental variables method,and further robustness tests are conducted in the form of replacing the study sample,shrinking the tail treatment and replacing the measurement of the explanatory variables,respectively.Additionally,the thesis empirically tests the effects of trade openness in terms of improving financial inclusion,income enhancement effect and optimizing income distribution.Finally,the heterogeneous characteristics of the impact of trade openness on China’s resident consumption are studied by dividing the research sample in terms of resident income class,work status of household head,age of household head and regional innovation level.It is found that trade openness has a significant promotion effect on the level of China’s residential consumption expenditure,mainly promoting the growth of subsistence-oriented consumption expenditure and enjoyment-oriented consumption expenditure of residents,while failing to have a significant impact on development-oriented consumption expenditure.The mechanism study finds that trade openness promotes China’s resident consumption through improving financial inclusion,increasing residents’ income and optimizing income distribution structure.The results of the heterogeneity study show that the positive effect of trade openness on residential consumption is significant among households in the high-income class,heads of households in employment,middle-aged heads of households,and in regions with high innovation inputs.Finally,based on the research findings,this thesis explores new paths to promote high-quality trade opening in terms of active participation in the multilateral trading system,optimization of international market layout,innovation of interregional foreign trade cooperation mechanism,optimization of domestic regional layout,promotion of balanced and coordinated trade development,and acceleration of building a strong trade country,and puts forward targeted policy recommendations for fully releasing domestic consumption potential and realizing domestic and international dual cycles.