A Study Of The Impact Of China's Foreign Trade On The Income Inequality Based On The Degree Of Dependence Upon Foreign Trade

The rapid development of foreign trade, greatly promotes the economic growth in China,since the reformation and opening 1978 .As a big foreign trade country of the world, China's foreign trade dependence ratio constantly improves . And we also need to notice a plain truth that China's income gap continues to expand during the same period. So,whether there is some relationship between these two companions? If the foreign trade of China really brings influence on the income gap ,what is the function mechanism of that? And how to difine the direction and size of that influece? In this paper I will try to find some answers to these questions.Based on the review of the theoretical research that income distribution effected by foreign trade,we mainly use empirical analysistic method to investigate the income gap of China.Foreign enterprises are the mainbody and processing trade is the main form in the foreign trade of China. And domestic development is not balanced between regions.Because of this particularity, compared with other factors, the foreign trade is more likely being the key reason to promote the income gap widened.Based on the characteristics of China's foreign trade and the long-term dynamic interests , in this paper we will demonstrate how foreign trade effects different forms of income gap in China through economic growth mechanism.Through the five main mechanisms of foreign trade effecting income distribution and contemporary China's realities, on this basis, we will discuss the following three issues:First, the mechanism and path that degree of dependence upon foreign trade of China effecting income distribution gap need to be theoretically answered and we also need to fide out whether foreign trade of China shoule take the resbonsibility for the income distribution gap being widened, why and how.Second, the model of dependence upon foreign trade of China effecting income distribution gap and the empirical analysis, using statistical data to inspect the influence magnitude and direction.Third, China's foreign trade effects on the income distribution gap. What does the part China's trade policies and more macro-perspective economic strategies play in this precession? How to adjust the policy and strategy of foreign trade if we want to reduce income distribution gap.This paper mainly use inductive analysis and empirical analysis method.Through the research on the domestic and foreign relevant issues, concludes the development of China's foreign trade and description of opening process, the income gap existing multi-links summarized etc, to provide empirical analysis and empirical facts support for latter research.Through the application of time-series econometric data from 1978-2008 ,checkout the relationship between income gap of residenets in our country and foreign trade dependence ratio.The results showed that: (1)there exists co-integration relationship and short-term dynamic adjustment mechanism between the income gap and foreign trade dependence ratio.There is no significant effect of the mutual promotion bot only unidirectional Granger causality. The empirical results also show that when we further the study of China's national economy ,it's maybe a good choice to reasearch the relationship between income gap and foreign trade dependence ratio,mean to solve the problom of widen income gap, in order to achieve our national economy healthy, harmonious and sustainable development.