Research On The Impact Of Factor-maket Distortion On The Transformation And Upgrading Of Foreign Trade

Since the reform and opening up, Chinese economy has developed very quicklyand made great achievements, economic aggregate has leapt to the second in theworld, and currently Chinese total exports has ranked first in the world. However,China's foreign trade is always in the most low-end of "smiling curve". The growth ofexport trade is mainly depending on the intensive margin style, extensive contributionmargin is very limited. Relying on the export trade modes of the traditional laborcomparative advantage does not have the sustainability. So we must cultivate the newadvantages of export trade, and foreign trade transformation and upgrading isimminent.Element is the micro micro-foundation of the economic and social development,and any economic phenomena and economic rule will eventually be attributed to theoptimum combination of elements. The key to foreign trade transformation andupgrading is the dynamic change of the enterprise. Further, the key is the effectiveallocation of elements. China encounters many problems in the process of foreigntrade transformation and upgrading, such as viscosity, disequilibrium, pathdependence and so on. And the deep-seated reason lies in the factor market distortions.In the decision of the3rd Session of the18th Conference of Party,“making the marketplay a decisive role in the allocation of resources, improving the efficiency ofresource allocation and fairness” reflect that there are serious problems in the factormarket.Compared to the rest of the economy, the factor market has higher correlationwith the foreign trade field. Factor endowment theory has pointed out that thecomparative advantage of a country is determined by the country's factor endowment,and the factor endowment difference is one of the fundamental reasons forinternational trade. In the theoretical assumptions of information completely andmarket completely, factor endowment is a decisive factor of a country's foreign trade.But in reality, the assumption that the market and market information is completely isunscientific. And China's long-term planned economic system and specialadministrative arrangements have caused the Chinese factor market distortion widespread. In the early this distortion has promoted the great development of China'sforeign trade. But as the change of external environment, and the transformation ofthe domestic economic development mode, there are new requirements for China'sforeign trade development strategy and the way of foreign trade development. Itmakes the structural contradiction between factor market and foreign trade marketmore highlights.Affected by the factors market distortions, China's foreign trade transformationand upgrading has produced the negative effects of path dependence. And the factormarket distortion is micro micro-reasons for the slow of foreign trade transformationand upgrading. It is a breakthrough point and theoretical foundation to solve theproblems of foreign trade transformation and upgrading, that clarifying theconnotations of the factors market distortions and the foreign trade transformation andupgrading from the theoretical level, and clarifying the influence mechanism of factormarket distort for foreign trade transformation and upgrading. On the basis oftheoretical analysis?starting from the reality, looking for the development situationand the deep-seated reasons of China's foreign trade transformation and upgrading,will provide the reality basis for the theoretical analysis. Then this dissertationempirically researches the effect of the factor market distortion on foreign tradetransformation and upgrading, and verifies the theoretical propositions proposedpreviously. Finally, it puts forward relative policy suggestions on the basis of theconclusion.In view of the above research ideas, the main contents of the research include thefollowing aspects:First, based on the theoretical analysis of factor-market distortion and foreigntrade transformation and upgrading, it analyzes the influence mechanism of factormarket distort to foreign trade transformation and upgrading, enriches the connotationof factor-market distortions. The results of the study shows that no matter from thepath of factor-supply distortion, the factor-price distortion, or factor-allocationdistortion, the influence of factors market distortions will lead to the results thatChina's foreign trade transformation and upgrading be unsustainable or stagnation, orthe deterioration of foreign trade transformation and upgrading. In turn, the deterioration of foreign trade transformation and upgrading will further worsen thebusiness conditions for the enterprises. Eventually, it will form the cobwebconduction path dependence.Second, it applies the method of mathematical analysis to study the problems andthe factors affecting of China's foreign trade transformation and upgrading. Theresearch findings shows that the foreign trade commodity structure and patternstructure has improved gradually, but the imbalance of the subject structure andspatial structure is more serious. And the foreign trade conditions of our countrycontinued to deteriorate; the foreign trade competitiveness still needs to be promoted.Factors affecting China's foreign trade transformation and upgrading are as follows:unbalance between supply and demand in factors level, production managementinefficiency in corporate level, transfer easily and upgrade difficultly in industry level,the validity of top-level design is not high in national level and so on.Third, it classifies and summarizes the present situation and existing problems ofthe factor market through literature search and investigation research. The researchfindings shows there are different degrees of distortion in China's factor market. Forexample that labor quality steadily has improved, but labor productivity is not high;capital factor scale increases year by year, but regional supply is imbalance; technicalresearch and development has got great progress, but he industrialization rate is lowand so on. This paper uses the advanced mathematical methods tools to systematicallymeasure the degree of distortion. The factors market distortion should not be confinedto the factor price distortion, but should also contain the factor supply distortion andthe factor allocation distortion. Measurement results show there is a larger degree ofdistortion in all of the three.Fourth, using impulse response function, it empirically analyzes the correlationbetween the factor market distortion and foreign trade transformation and upgrading.The results show that the influence of factor market distortions on the foreign tradetransformation and upgrading is mainly characterized by positive correlations, whilethe influence of foreign trade transformation and upgrading on the factor marketdistortion shows the change of the multi-stage. So theses prove our earlier theoreticalanalysis about the correlation between the factor market distortion and foreign trade transformation and upgrading.At last, based on the above research, it puts forward scientific and feasiblecountermeasures and suggestions to correct the factor-maket distortion from thefactor-supply, factor-price, and factor-allocation three aspects.