The Research On The Impact Of China’s Foreign Trade To The Factor Income Distribution

The ratio of labor factor reward in national income of China has fluctuated from low to high and then from high to low since 1990 s. According to the trading off relationship between the ratio of labor factor reward and the ratio of capital factor reward in national income, we can make a conclusion that China is still in a period that the gap between labor and capital factor reward is getting wider and wider now. The consuming demand of commodities and services must decrease if the ratio of labor factor reward in national income is too low, and the power of economic growth will be weaken in the long term and the growth speed will slow down in the future. Therefore, in order to mutative the growth of Chinese economy, we should find the influencing factors on the factor income distribution, and further analyze its mechanism and explore the way to change that.In fact, as the width and depth of opening up extending, the gross foreign trade of China has increased rapidly. The value of import and export had increased from 20.6 billion dollar in 1978 to 4160 billion dollar, which had increased 201 times. The rank of trade in goods had risen from No.32 to No.1 and the ratio had increased from less than 1% to 12%, which made China become the biggest country in goods trading. This is the first time that developing country takes the first place in the world. The liberalization of trade do increase the gross income of every country in terms of theory, but the influence of international trade to inner factor income distribution has become one of the most important controversial problem.This paper takes China as her research object, discussing the influence of China’s foreign trade on factor income distribution deeply. The paper proceeds as follows. Firstly, the article discovers the mechanism of foreign trade affecting factor income distribution in theories. Secondly, the article describes and analyzes the characters of China’s foreign trade and factor income distribution by some statistic indicators. Thirdly, three econometric models are presented to judge foreign trade’s influence on the domestic income distribution, and if they do, pointing out its direction and amplitude. Fourthly, using the computable general equilibrium analysis, the article explores the real channel of China’s foreign trade affecting factors income distribution. Finally, some conclusions and policy proposals are provided. The main content of this dissertation includes the following parts.The first chapter is introduction. This chapter mainly includes the research background, research significance, literature review, research thinking and framework, the innovation and deficiency of the dissertation.The second chapter analyzes some economic theories. In this section, the author summarizes the foreign trade theories which have relationship with factor income distribution, and then discovers the working mechanisms, including the price mechanism, the tariff mechanism and other mechanisms.The third chapter is the description and analysis of China’s foreign trade development and the factor’s income distribution. It summarizes the characters of China’s foreign trade, through statistic indicators of trade scale and trade structures of the different commodities, different regions and countries with different income levels. At the same time, this section calculates China’s labor factor income, capital factor income, and judges their short and long term fluctuant trend.The fourth chapter is the empirical test the impact of China’s foreign trade on factor income distribution. This section mainly analyzes whether the different kinds of foreign trade have influence on the domestic income distribution by constructing econometric regression model. The foreign trade includes the trade of different commodities, different regions and countries with different income levels. And if they do, the paper further judges its working direction and amplitude.The fifth chapter is the empirical test on the working mechanism of China’s foreign trade to the factor income distribution. Based on the conclusion of last chapter, this section uses computable general equilibrium analysis to numerically simulate the price mechanism, the tariff mechanism and other mechanisms, and explores these mechanisms how to affect the domestic factor income distribution, then judges its direction and amplitude of all kinds of working mechanismThe last chapter is the main conclusions and policy proposals. In order to make the income gap of China’s labor and capital factors maintaining in a reasonable region and realize the sustainable economic growth, according to the above empirical test results, this section draws the related conclusion and puts forward some policy proposals when the specific external economic situation changes.