An Analysis Of Income Term Of Trade Of China

Terms of trade is an important indicator of the change of a country's benefit from foreign trade. The aim of international trade and international divisions of work for a country is to gain trade benefits. The benefit is directly related with terms of trade. So it is deeply concerned by every economy to get the favorable terms of trade and to share more behalf in foreign trade.However, researches usually focus their attentions only on the change of the net batter terms of trade (NBTT) and consider that NBTT is equal with terms of trade, then reach the conclusion terms of trade is getting worse and worse. Income terms of trade (ITT) measures the overall trade benefit which received from international labor division. The significance of theoretical and empirical of ITT's change trend isn't less than NBTT, and ITT has its specific value in certain aspects.At first, this paper makes a brief comment on main theories about terms of trade. Then remarks on income terms of trade. Based on the calculation of 1995-2005 ITT data, the trade of China's ITT is to be better.The paper establishes the formulation of the net income terms of trade to evaluate China benefits from trade.It shows that ITT amelioration and expanse of foreign trade scale make positive contributions to economic development.In a word, it is not reasonable to get the conclusion that our terms of trade is deteriorated just based on NBTT. Under the realistic background of an international competition, China should promote the increase of trade volume and not at a cost of worsening income terms of trade.