Macro-disequilibrium Study On China's Open Economy

Since the foundation of the PRC, significant non-equilibrium characteristics have existed in China's macro-economy level all the time. This economic phenomenon is consistent with the assumptions and thinking logicality of the Non-Walrasian equilibrium theory, which springs up in 1960s in the West. Domestic scholars have done much research on non-equilibrium characteristics and conditions in China's macro-economy. But these studies, on the one hand, are primarily confined to the traditional planned economic and the dual-track economic times; and on the other hand, are mainly limited to a closed economy. In this paper, under the guidance of the Non-Walrasian equilibrium theory, the writer makes a study on China's current macro-economic non-equilibrium situations under open conditions since the late 1990s, and on that basis, put forward some effective and feasible policy recommendations to promote China's macro-economy's balanced development as much as possible.Firstly, the paper analyzes the intrinsic interactions among the respective non-equilibrium characteristics of China's labor market, domestic trade markets, and foreign trade market, and points out that causal relations exist among them. The imbalance between supply and demand in the labor market, caused by structural non-equilibrium in labor force quality, leads to the imbalance between supply and demand in the domestic trade markets, which finally results in structural non-equilibrium characteristics in the foreign trade market. Secondly, from the perspective of Non-Walrasian equilibrium theory, the paper discusses the root causes of China's structural unemployment and aggregate unemployment. Structural unemployment lies in the non-equilibrium structure in labor force quality. Aggregate unemployment is due to wage level'being too low relative to the level of economic development, which results in the mutual restraint between the low-middle level labor market and the traditional commodity market, and thereby forms a vicious circle , causing the Keynesian unemployment. Then, rested on the analyses of non-equilibrium situations of China's labor market, domestic trade markets as well as foreign trade market, the paper establishes China's current macro non-equilibrium model under open conditions, namely the Export - Import Model. Subsequently, on the base of the model, the paper does some studies on various economic policies and shocks'effects on the employment, output, and balance of payments etc. Finally, according to the previous research, relevant policy recommendations are put forward: to Strengthen training high-level workforce to improve the structure in labor force quality; to raise the level of real wages in our country, especially for those low-income people; to expand government purchases of products from the export sector, reduce taxes, and raise the export tax rebate rates and others in order to ease the negative effect on our economy of the current financial crisis.