Study Of Chongqing's Comparative Advantage And Foreign Trade Strategy After China's Entry Into The WTO

Since 1980s and 1990s, the world has shown more and more obvious tendency towards economic integration, globalization and internationalization. International trade is developing faster and faster. Under such circumstances, it is really difficult for a nation to close itself to international intercourse and opening to the outside world has become the main pattern of economic development. Entry into the WTO is China's inevitable choice. The great economic achievement that China, especially the Eastern Coastal Area has made during 20 years of reform has become the focus of the world attention. External trade has demonstrated its strong promotion of economic growth. Proclaimed to be the municipality, Chongqing develops fast, but its external trade lags behind. The variation in export volume, export structure between Chongqing and Eastern Coastal Areas has widened and this results in lack of promotion of economic growth. At present, it is urgent to develop foreign trade for the promotion of Chongqing's economic growth. One of the main causes for this lies in the fact that Chongqing fails to realize and give full play of its comparative advantages and prominent competitive advantages haven't been founded yet. This paper first states the theory of comparative and competitive advantages, analyzes the present situation and problems of Chongqing's foreign trade and point out it is urgent to change the backward state of foreign trade. Then, by adopting the theory of comparative advantage and analyzing the index of productivity, average wage and ratio between wage and production etc., this paper draws the conclusion that according to its comparative advantages, Chongqing should develop resource-intensive and labor-intensive industries and motorcycle and automobile manufacturing industry owns comparative advantage. After that, by analyzing TC and RCA index, this paper chooses the industries(or lines) with competitive advantage. Through the Value Chain Pattern, the main value-rising links are found out to know the major competitiveness of each industry. As a result, this paper makes further analysis of the competitiveness and put forward the following suggestions.â‘ Chongqing should develop the manufacturing industry with emphasis on its communication and transportation equipment manufacturing to found the prominent competitive advantages. New competitive advantage can be created through the manufacturing industry's strong driving function on related potential lines and industries. â‘¡Chongqing should cultivate the industries whose comparative advantages haven't been fully fulfilled and encourage its development to own the competitive advantage so as to promote the export.On the basis of the above-mentioned analysis and Chongqing's objective reality, this paper chooses the strategy of "development of the major domestic industries with comparative advantages and opening to the outside world" as Chongqing's foreign trade strategy. At the same time, it points out that we shouldn't follow the principle of comparative advantage in static state; otherwise, it is easy to fall into "the trap of comparative advantage".In order to drive the fast development of Chongqing's foreign trade and make it fulfill its promotion of economic growth, this paper puts forward the countermeasures to overcome the disadvantages to solve the main problems in Chongqing's development, such as Developing the Major Industries, EMS Introduction, Setting-up of modern logistics service to overcome the geographical disadvantage, Promotion of the investment environment, Development of processing trade etc..