On The Effect Of Foreign Trade To Regional Economic Disparity

During the reform and openness period, the Chinese economy keeps a miraculous growth rate, but because of the heterogeneity of regions, the disparity of three regions gets bigger, especially in the 1990s. As the same time, the foreign trade which is as the engine of economic growth exhibits differently in three regions. The volume, the growth rate and the dependence degree of foreign trade depress gradually from the east region to west. In this paper, we concentrate on the effects of the difference of foreign trade to the disparity of three regions.This paper analyses the issue from the static and dynamic points. Firstly, we compare the rate of economic growth and the development of foreign trade among three regions in the era, statically. We calculate the coefficient of variance of PGDP, export and import of three regions. Based on them, we analyze the long run equilibrium correlations, Granger causality relationship and the impulse response function among them with multi-variables cointegration technique, these indicate that the regional disparity of China is existed in the beginning of 1980s and depressed in 1980s, but enlarged inl990s, the diversity of export and import enlarged during whole era. The difference of development of foreign trade is an important cause of the regional disparity. Secondly, we build our output function including foreign trade with the guide of new economic growth and new trade theories, from the dynamic point. Our regression based on the panel data shows foreign trade influences the total factor productivity statistically and significantly, then influences the economic growth. But because of the different foreign trade dependence degree in three regions, the effect is different, the advantage is obtained by east region mainly. With the growth accounting method, we review the relationship between the foreign trade dependence degree and the total factor productivity solely, the scatter with regression shows the same outcome. Ulteriorly, we compute the structure of export goods and the revealed comparative Advantage (RCA). Combined the middle and west regions, the result shows that the east region has comparative advantage in exporting industrial manufactured goods, the rest region have comparative advantage in exporting primary goods. The different structure and RCA which are decided endogeneously by the regional heterogeneity lead the different technical progress rates, then the different economic growth rate, finally the regional disparity is enlarged. In the end, we concludes the whole paper, and give the politic suggestion...