Foreign Trade And Industrial Geography

After the domestic reform and opening to the world, China has gradually made integration into the global economy comprehensively along with the rapid development of foreign trade. At the same time, profound changes have taken place in the domestic industrial geography ("industry" in this paper is limited to manufacturing):Most of the industry is gathering in the eastern coastal areas, the eastern provinces attract labor across the China and capital from around the world. From the mid-term in first decade of the 21st century, with the continued implementation of regional development policies, domestic and international economic integration continued to deepen, the labor-intensive industries in the eastern region began to gradually shift to the central and western regions, the domestic market's influence for industrial spatial conformation increase relatively. But the advantage of coastal trade is still supporting the more export industry's share in the eastern region.There is no doubt that the changes in the domestic industrial geography are relevant to the domestic market-oriented reforms, but also to foreign trade and globalization. NAFTA allows Mexico's manufacturing dispersed in the US-Mexican border region of Mexico. EU integration intensified the development gap between north and south of Italy. Openness to the outside makes so many manufacturing clustered in the eastern coastal areas of China. Trade liberalization is an important force shaping the industrial geography. Trade liberalization enlarges the market scale. market scale is basic variable that the new economic geography theory explain the distribution of spatial distribution of industry:the larger market will allow companies with economies of scale production costs lower, which encourages the expansion of firm's scale and attracts new companies stationed here; the other hand, the larger market is the result of the large number of businesses and consumers gathered there, market access, transport costs and factor mobility form the cumulative cycle. For larger countries (like China), different regions get different added market from the foreign trade and opening. Due to geographical proximity to foreign markets, eastern coastal areas have inherent advantages. Preferential state policies further strengthened this advantage. Facing the largest market, coastal areas is attracting businesses, and business's demand for intermediate input and workers' demand for the end product makes the market larger, so that the industry continued to gather in the east. But with the deepening of the domestic market integration, the role of the domestic market began to expand, industries and enterprises start to shift or spread. China's industrial geography makes a new evolution. We make analysis of foreign trade on the impact of China's industrial geography from both theoretical and empirical perspective. Compared with previous studies, improved the theoretical model, industrial geographical description of spatial characteristics, export trade, and geographical factors affecting industrial inspection, etc., are optimized and innovation in this paper.Based on the existing literature summarized, organized, and reviewed, We first develop a model to analyze the relations between the foreign trade and domestic industrial geography-a general equilibrium model that contains two countries three regions. This model can more accurately describe and explain the influence of the opening in foreign trade on China's industrial geography through improvement of domestic transport costs and the asymmetry assumed in two regions. Next we using the improved gravity model to measure and analyze the cost of China's foreign trade. Using the detailed classification of industries and regions, we describe and characterize the temporal evolution of China's industrial geography, and on the basis of results we analyze the spatial characteristics of Chinese exports. The third part is the basis of existing research results combined with new trade theory, the theory of new economic geography theory to construct econometric equations, and using different indicators to verify the relationship between China's industrial geography and foreign trade. Also using urban economy as a case we study the impacts of internal and external markets on regional development. Last is a summary of conclusions, policy implications and research prospects. Through theoretical and empirical analysis, the paper obtained the following main conclusions.(1) In the situation of two domestic asymmetric regions in the model of two countries and three regions, the opening of trade makes a geographical area with trade facilitation advantages gained first-mover advantage, making these areas become the place of industry agglomeration, and output elements is in this cluster, moreover this advantage is irreversible. Reduction in trade costs shows the role of external markets, which slowed the industry from trade facilitation area spread to other regions. Deterioration in external demand will intensify the trend of this shift.(2)Since the reform and opening, the bilateral trade cost of China has been a significant decline. On the spatial dimension, the distance and transportation costs in China and the European Union, the United States is more than China and Hong Kong, China Taiwan, ASEAN, South Korea and Japan, and the former is more than the latter in bilateral trade cost. On the time dimension, the effect WTO accession on China's foreign trade cost reduction is obvious. On national dimension, China's bilateral trade with the East Asian newly industrialized countries is less than other developed countries like the United States and Japan, and degree of decline is greater after the openness.(3)Economic globalization which is characterized by foreign trade liberalization and FDI facilitation impacts profoundly on China's industrial geography. The geographical distribution, temporal and spatial evolution of different types of industry is quite different. Labor-intensive export industries have more rapid development. Relying on export processing trade, export-oriented industries are with high concentration in the eastern areas. After 2004-2005, export-oriented manufacturing, especially high or high degree of labor-intensive industry, begins to spread to the central and western regions.(4)Export agglomeration promotes the production agglomeration. There is spatial correlation in exports. This is the two spatial features about the export. Compared to the production, export has the following geographic features:more concentration, more coastal and more southeast. As an economic activity with strong demonstration effect and spillover effects, exports are approaching each other on the geographical location. This county unit in Jiangsu dimension has been well proven the fact.(5)The export of China's manufacturing industries promotes the geographical concentration of these industries. On the condition of trade openness, labor-intensive industries are more apparent in the trend of concentration. The industries with high taxes are more dispersed distribution industries. The export trade in provinces will promote its overall industry agglomeration in these regions. Reduction of the cost of China's foreign trade is conducive to the overall agglomeration of manufacturing industries of the regions. Areas with high level of economic development, more developed transport infrastructure and geographical advantages in the coastal city significantly increased the average concentration of manufacturing in these areas.(6)Domestic market access is an important reason for the gap of economic development in China's regional urban. This is particularly prominent in urban centers. Due to the advantages of the eastern coast to foreign countries, foreign market access enhanced the gap:the advantages of the eastern region of trade advantages in foreign markets increased China's central and western cities in economic development, the lag of the central and western central cities'development cause its weak radiating capacity, this is the important reason for the imbalance in regional development.