A Study On The Measurement Of China's Generalized Trade Costs And Their Effects

International trade is one of the three engines of economic growth.It has played an important role in promoting world economic growth since the 1990 s thanks to the decline of trade economic costs.But unfortunately,things have changed in the recent years.Both China and the whole world have found a decline in trade and a slowdown in economic growth.What makes it worse is that the United States government has put forward the policy of "US first",which undoubtedly intensifies global trade frictions and further increases trade economic costs.Besides trade economic costs,changes in trade environmental costs cannot be ignored as demand for cleaner environment soars up with the development China's economic.Environmental consideration is no longer an optional choice but a necessity,as The Party's 19 th National Congress Report emphasizes that “Clear waters and green mountains are as good as mountains of gold and silver” and Environmental Protection Tax Law of the People's Republic of China has been officially implemented since January 1,2018.Hence environmental protection has become a rigid constraint on the enterprises production and export,and trade environmental costs are also getting higher and higher.As a result,gone are the days when China's export grows rapidly and overall trade costs decline continuously.Under such circumstances,this dissertation accurately measures China's generalized trade costs,figures out the trend of trade economic costs and finds out the determinants,clarifies the impact of trade environmental costs on Chinese enterprise exports,and simulates the impact of external shocks on generalized trade costs,aiming to build an environmental friendly trade power.In this way can we clarify how to find motive forces,to adjust the structure and to cultivate new competitive advantages in foreign trade exports,and then be able to “promote a new pattern of comprehensive opening up” and build a socialist modernization power that is "prosperous,strong,democratic,civilized,harmonious and beautiful".The main research methods adopted in this dissertation are the literature analysis method,inductive deduction method and combination of empirical analysis and normative analysis.On the basis of searching,reading and analyzing related literatures on trade economic costs,trade environmental costs and their effects,the dissertation finds the drawbacks of existing related literature and starting point of research,and provides useful reference for the study of the impact of general trade costs on trade development.By inductive deduction method,it explains the relationship between trade costs and foreign trade.And by the third method,the impacts of anti-dumping on trade economic costs is analyzed based on the gravitational model,and the entropy weight method is used to calculate trade environment costs,and Heckman two-step model is used to analyze the impact of discharge fee on the export value,export quantity and trade margin.Theoretical analysis is also given on measurement of trade economic costs and its compatibility with traditional trade theories such as comparative advantage under the framework of heterogeneous enterprise models,and on the impact mechanism of trade environmental costs on international trade.In conclusion,it finds that changes in China's generalized trade costs can be roughly divided into three stages,the first stage runs from 2002 to 2007,in which the rapid increase of trade environmental costs led to the rise of generalized trade costs;the second stage goes from 2008 to 2010 covering global financial crisis,in which trade environmental costs showed a V-shaped trend and aggregated trade economic costs is inverted V-shaped,and therefore the generalized trade cost looks like a smooth smile curve.The last phase is from 2011 to 2015,in which aggregated trade economic costs are rising steadily while trade environmental costs slumps after a smooth downward trend,leading to a small decrease in generalized trade costs.The generalized trade costs to trade with ASEAN,the US,Japan,South Korea,and Hong Kong are lower than average,while those are higher than average to trade with the EU,BRICS,and other countries along the Belt and Road Initiative(OBR).The generalized trade cost is calculated by the entropy weight method combining the trade economic cost index and the trade environment cost index.The weights are 0.786 and 0.214,respectively.Among them,the trade economic costs are calculated by the method of Novy(2013),covering China's trade economic costs with 173 trading partners from 2002 to2016.The result shows that the aggregated trade economic cost is only about 43% of the average trade economic costs which ignores the difference of weights and leads to a bias.Moreover,the trend that trade economic costs go downward steadily has changed,with the turning point appearing in 2014 shifting upward.The years of turning points are different among different trading partners.And similar to generalized trade costs,the aggregated trade costs with ASEAN,the US,Japan,South Korea,and Hong Kong are lower than average,while those are higher than average to trade with the EU,BRICS,and other countries along the Belt and Road Initiative(OBR).Trade environmental costs are calculated by entropy weight method based on energy consumption and pollutant emission.The trade environmental costs rose rapidly from 2001 to 2007,showing U-shaped changes in the global economic crisis from 2008 to 2010,reaching the peak in 2011,stabilizing for a period and slumped in 2015.From the viewpoint of energy consumption,the PTTs(Pollution Trade Terms)of China's exports to Vietnam,Thailand,Malaysia,India,South Africa and Russia are less than100,while PTTs to other top 20 major trading partners are more than 100,and they gradually declines after peaking in 2005.And From the viewpoint of pollutant emissions,the increases of trade environmental costs are entirely attributable to the increases of total waste gas emissions,that is,the increases of greenhouse gases.With regard to the influencing factors of trade economic costs,combined with the current the international situation,the dissertation introduces the factor of “attitude towards free trade” with the number of anti-dumping cases as proxy variables.By adding anti-dumping related variables to the classic gravity model,it finds that the number of anti-dumping initiated and encountered by China and that encountered by trade partners have increased China's trade economic costs.However,the number of anti-dumping allegations initiated by trading partners specifically against China and the number of anti-dumping measures taken against China has no significant impact.In other words,it is the trading partner's “attitude towards free trade” rather than “attitude towards trading with China” that significantly affects China's trade economic cost.Counterfactual simulations show that if China does not encounter any anti-dumping charges from 2002 to 2016,trade economic cost will fall by 36.40%;if no trading partners initiate anti-dumping charges against each other,China's trade economic costs will fall by 23.89%.;and if no trading partners encounter anti-dumping charges,China's trade economic costs will also fall by 2.07%.In short,China has benefited from global free trade and should continue to act as a powerful supporter of the WTO to maintain the order of international free trade.This dissertation has introduced the discharge fee to heterogeneous enterprise trade theory model to test the impact of trade environmental cost on enterprises export.The study finds that export value is not only liner correlated with discharge fee per output value and discharge fee per revenue,but also correlated with them in a U-shaped curve.So it can be inferred that the turning point has not yet been reached and export value drops with the increase of the 2 unit discharge fee indexes.While enterprises export value is positively correlated with discharge fee per quantity,which is also positively correlated with extensive margin intensive margin.And the total discharge fee is also positively correlated with intensive margin.Porter hypodissertation can be almost testified since total discharge fee as well as 3 unit discharge fee indexes has unanimously been correlated with export product quality in U-shaped curve,with the turning point yet to come.In addition,discharge fee indicators mainly affect enterprises' export performance by reducing the total factor productivity,increasing long-term investment and R&D investment with differences among industries.Finally,after 8 regions and 6 departments are divided in GTAP(Global Trade Analysis Project)model,the dissertation gives a simulation on generalized trade costs changes with the following findings: first,import tariffs imposed by United States on Chinese manufacture products will result in an increased generalized trade costs,with worse trade terms,less export and import and increased trade deficit which comes entirely from the manufacturing sector.Secondly,global trade in manufacture products has dropped relative to global merchandise trade,but the decline in China's manufacturing output is not obvious.Tariffs have seriously dragged down China's GDP growth and seriously worsened China's welfare.Thirdly,tariffs will improve US trade terms and trade balance and increase its welfare,but they will not help in enlarging output or improving employment.Based on above conclusions it gives some advices on policy,such as reducing trade economic costs to the EU and OBR countries,maintaining a stable growth rate of foreign trade,further accelerating openness,expanding investment in infrastructure with causions so as to adhere to industrial restructuring,and guiding industrial transformation and upgrading with tactful tax policies.Possible innovations may lie in the following aspects: First,the dissertation has combined traditional trade economic costs with trade environmental costs to build generalized trade costs,and measured them by entropy weight method,and thus has enriched the connotation of trade costs.Second,by adding discharge fee variable to the classical heterogeneous enterprise model,it has extended the model and empirically analyzed the impact of the discharge fee(ie.trade environmental costs)on enterprises exports microscopically.Third,by the application of GTAP model to simulate the economic effects of generalized trade costs,it has reached a conclusion considering not only traditional economic objectives such as trade development,but also ecological objectives.The drawbacks include that the research on the economic effects of general trade costs need to be further deepened,and that data used in the empirical analysis to find the impact of discharge fee on exports is not updated.