The Influence Of Financial Advancement On Optimizing China's Export Trade Structure

Since the Third Plenary Session of the 11th CPC Central Committee in 1978,a series of foreign economic policies have been carried out in Guangdong and Fujian,two southern coastal provinces,opening a new chapter of China's reform and opening up.Our economy and exports are booming—until 2010,we have surpassed Germany in the total export volume and become the largest exporter in the world.However,a trader of quantity doesn' t mean a trader of quality.At present,the production of global high-tech exports is still controlled by developed countries from which we import parts,assemble them and then sell them to other countries.In 2008,the subprime crisis in the U.S.led to the global financial crisis and our exports were seriously affected,but we also realized the problems in the export structure.How to solve these problems is the key to our future development.With the advancement of the global economy and the appearance of multipolarization,scientific and technological innovation becomes the cradle of new products.In order to follow the new trend of export development,we carried out the 12th Five-Year Plan,transformed our economy,and promoted scientific and technologic innovation and education for all.We also enhanced the industrial chain structure and prioritized the progress of high-end and high-tech industries.Nowadays,the two main themes in the global economy are international trade and financial development.To better adapt to economic globalization and shift from a trader of quantity to a trader of quality,we should consider the integration and interaction between finance and exports.Existing literature studies more on how finance boosts export growth,but ignores the interaction mechanism between the two.Since the progress of exports relies on optimizing structures,the study on the impact mechanism and effects of three dimensions in financial research—financial size,financial structure and financial efficiency—on the structures can provide policy guide for the transforming and developing our exports,improve the competitiveness and status of our trades and rejuvenate the Chinese nation.From the perspective of literature,this thesis studies the development of finance in terms of three stages:birth,rudiment and development,and analyzes the role finance plays in exports at home and abroad.We find that there is much literature on the analysis of interaction mechanism between finance and exports from abroad,but they mainly target at developed countries,so it may not apply to developing countries.In this regard,China's studies mainly concentrate on how financial development promotes exports and pay less attention to the mechanism,so this thesis focuses on the impact mechanism of financial development on exports.From the perspective of empirical analysis,this thesis selects indicators that influence export structures from three dimensions including financial size,financial structure and financial efficiency.A spatial econometric model is established to measure the positive effects of financial development on export structures and the combined effects of all financial dimensions.Through the empirical analysis,we can get policy guide to optimize export structure from the direct effect and spillover effect in space decomposition.Using the model,we create a space adjacency matrix,select spatial panel data from eight China' comprehensive economic zones and measure the spatial correlation between financial development and export structure.The empirical results show that:financial size,financial structure and financial efficiency all have obvious positive effects on export structure,which means financial development can optimize export structure.Judging from the general law,we can see the spillover effect has both obvious and unobvious aspects.The positive effects of our financial size,financial structure and financial efficiency are in some extent consistent with those in the globe,but they are also influenced by our unique geographic location.This thesis builds a general theoretical framework in three dimensions.Based on the mechanism and practical approach in these dimensions,this thesis also establishes a spatial econometric model to analyze how financial development optimizes export structure using the data from eight comprehensive economic zones.It also fills the gap in the studies on our export structure and provides a new perspective for our future development as well as theoretical base and evidence for financial supporting strategies to optimize our exports.