Institutional Analysis On The Transformation Of China's Foreign Trade Growth Pattern

Since reform and opening up, the scale of Chinese foreign trade rapidly expands. Meanwhile, there are the problems with the continued deterioration of terms of trade and extensive growth of trade. The growth trade mode of one country not only depends on its factor endowments, level of a nation's scientific and economic development and its trade policy oriented, but also depends on its institutional arrangement. Previous theory has many defects in guiding the transformation of trade growth mode of China.According to the interpretation of Douglass C. North, the institutional factors that impact trade growth pattern can be divided into two levels: internal institution system and external supervisory system. Normally, external supervisory system works through internal institution system. These institutional arrangements not only directly influence the formation and transformation of trade growth mode, but also act on other factors which play crucial roles during the transfer.The current foreign trade institutions impede transformation of trade growth mode of China. That being said, the extensive growth pattern of trade was aggravated by institutional reasons to some degree. For example, there are the foreign trade institutions aiming at double the amount and half the quality, double the scale and half the benefit. The root causes of China's institutional problems reside in the guiding ideology of export, internal and external imbalance of economic structure, path dependency of the extensive growth pattern, etc.Analyzed from the perspective of institutional arrangements, three aspects should be considered: macro-economic regime, enterprise mechanism and formal constraint regime. From the macro-economic regime point of view, the evaluation system and the promotion system of trade should be changed. Based on the analysis results, proposals regarding institutional innovation, trade policy adjustment, foreign investment policy are put forward to further to promote China's transformation of trade growth mode. Analyzed from the point of enterprise mechanism, government intervention in foreign-trade enterprises should be reduced, the enterprise should assume sole responsibility for its profits or losses. It is enough that local government plays a guide role to encourage scientific and technical innovation of enterprises. In social and formal constraint level, intellectual property system and property right of human capital system should be improved.