Empirical Analysis On The Impact Of Foreign Trade To China's Technical Improvement

With the upgrading of China's trade structure featuring the decrease of primary goods in the makeup of the whole exports, China has become an important player in world trade arena. In 2004, following United States and Germany, China became the third biggest trade country in the world, and the value of trade commodity amounted to 1154.7 billion dollars. The values of export and import increased 35.7% and 36% separately compared to 2003. However have we raised our technology level by acquiring technique overflow through trade? This paper computed the rates of China's technology progress by the way of Data Envelope Analysis (DEA). The results showed that generally China didn't achieve technology progress since 1978. An empirical analysis on the relationship between trade and technology with cointegration method shows that trade, in the whole or in terms of primary good/manufactured goods, hasn't promoted China's technology.This paper ascribes the failure of trade in promoting technology to the overwhelming proportion of processing trade in China's trade and the weak ability of China's enterprises to absorb advanced technology. The undue proportion of processing trade leads to the prosperity of export and import, but fails to promote technology and form sound industry. The weak ability of China's enterprises to absorb advanced technology due to scarcity of fund hinder the absorption and innovation of advanced technology...