The Effects Of Improvement Trade On China's Industrialization

Industrialization is a important stage which every country must experience in its process of modernization. In the early development economics, the less developed country's development strategy emphasized on the export–oriented or the import–substitution strategy. But the integration of world economy has changed the traditional strategy thoroughly. The improvement trade is a new kind of trade method under the background of the economicglobalization. It first appeared in the form of inside industry trade between the developed countries, afterward developed quickly in the developing country, especially in the new industrilized countries. In fact, improvement trade has important influence on developing country including china. Based on the theory and the realistic background, this dissertation expatiates the necessity of improvement trade development in china, analysis its contribution to industrialization. Firstly, it absorbs foreign capital into the manufacturing industry directly, making manufacturing industry have strong international competition ability; Secondly, it promotes the industrial structure to a higher grade. Thirdly, its technique and management overflow effect promotes technology prograss .Fourthly, it educates large quantity of technical and management professional oriented to internationalization. The dissertation also analysis the contribution degree that improvement trade makes to our country's foreign trade export , GDP, total employment, tax revenue and the industrial structure upgradeing. The reaserch result shows: with a percentage points increase of the improvement trade, it will lead to 1.19 percentage points increase of the total exports increment; 0.47 percentage points increase of the GDP increment; 0.4 percentage points increase of the employment number; and 1.04 percentage points increase of the tax revenue . This dissertation further analyse the function that improvment trade promote to the development of our country's h&t industry and increase its value-added. And this dissertation expatiates the function that improvment trade promote to transform the dual economy: it quickens the city industrialization and absorbs large number of rural labor force, and pushes the rural industrialization. Exporting rebate policy is important means that government encourage export. In order to promotes the structural upgradeing in export industry, the government adjusted the export rebate rate, This dissertation not only discussed the meaning of the export rebate rate adjustment on the industrial upgrading, but also calculate the influence of export rebate rate adjustment on different industry's improvment trade development . The result shows that the each 1% increase of taxing refund expenditure will stimulate 0.453% increase of this year's export .Export rebate rate has different effect on different industries , the more notable of encouragement by export rebate ,the improvment trade of these industries will have more quick development; but improvment trade of the primary commodities will shrink. To the high technology products, because our country's products have an apparently disadvantage compared with the developed countries, which are short of competition ability in international market, so improvment trade of this type of products will development slowly . To Renminbi's current pressure of revaluation , the author thinks that the Renminbi 's revaluation have different influence to different industries: To technology intensive products , because of their low demand elasticity to price, price increas of export product incurred by renminbi revaluation will have minor effect on foreign demand, so the ability of earning foreign exchange will go up. The improvment trade of this type of products will be insensitive to Renminbi revaluation; To labor intensive products, because its high demand elasticity to price, after the Renminbi revaluation, price increase will lead to sharp decrease of export , therefore the improvment trade of this type of products also shrink because of reduction of demand. The main problems of China's improvment trade are: low value-added; low linkage effect with the upper stream industries; imported original material and middle products occupy the domestic market of local products. These deficiency lead to such latent result: industrial structure can not get improvement over a long period, the trade term may deteriorate.On the other hand,the domestic industrial structure can not get improvement over a long run because of low linkage effect. these shortage will defer China's industrialization. Therefore, taking effective measures to perfect the development of improvement trade has important meaning, the suggested policies are as follows: (1) Bringing the improvment trade into the national industry policy, making the domestic industries melt into international market by improvment trade; (2) Taking technologypolicy to enhance the ability of technogical digestion, absorbtion and innovation; (3) Establishing tax revenue policy, promote the kit industry development, pushing the middle products to produce locally; (4) Promoting the improvment trade breakthrough in the high technology industries, increasing the technology content and the value-added; (5) Enhancing labour division and cooperation between regions, promote the improvment trade transfer from the east area to the middle and western area. Finally, the author gives a summary and outlook on the function of improvment trade on our country's industrialization. Only promoting the improvment trade deeply and exerting the comparative advantage continuously, can our country transform from one of biggest trade country to a powerful trade one in a short run, and the industrialization process will pick up. The dissertation's main innovation are as follows:(1) through econometrics analysis , puts forward to developing the improvment trade is the effective path for the developing countries to realize industrialization; (2) Points out how to adjust the improvment trade under the pressure of Renminbi revaluation; (3) Analysis the effect of the export rebate rate adjustment on the improvment trade development ; (4) Emphasizes on improvment trade's role of transforming the dual economy in the developing countries.