The Analysis Of The Change And Influential Factors Of Net Barter Terms Of Trade In China

With the accelerated development of globalization, international trade business has become the most important impetus to the economic growth of each country. Terms of trade, as a crucial indicator of the change of a country's benefit from foreign trade, and whose change is deeply concerned by every government, has always been one of key study projects for modern economics.People have come to the agreement to the terms that foreign trade has boosted China's economy, however, we also face confusion: do we really benefit more in the process of different divisions among international communities? Therefore, this paper focuses on China's Net Barter Terms of Trade (NBTT). The subject of this thesis is the NBTT's change and its influential factors since the implement of China's reform and open-up policy.Three parts buildup this paper: A brief comment on main theories about terms of trade is given at first. With analysis of weakness and strength of China's foreign trade development and some data information, the writer concludes that the overall trend of China's NBTT is declining based on 1985-2002 data. Following both and qualitative and quantitative analysis on influential factors of China's NBTT, the major findings from the study are: GDP, FDI, exchange rate (EXC), composition of import-export commodities are the four key factors influencing NBTT;ratio of export manufactured products to primary products (RMP) is the positive factor, the left threes are negative ones;RMP & EXC are two dominant independent variables among these four ones. On the basis of the above conclusions, we can find some clues in terms of industrial policy, foreign trade policy and exchange rate policy to improve China's NBTT: to optimize the economy structure, to implement competitive advantage strategy, to establish a more rational tariff structure, to guide FDI flowing industries and supervise multi-national corporations' intra-transfer price, to establish a more rational exchange rate system.This paper also mentioned further possible studies in this field.