The Analysis Of The Influential Factors And Change Of Terms Of Trade In China

Terms of Trade (TOT) is an important indicator used to reveal the change of a country's benefit from its trade, which is deeply concerned by every economy. This paper analyzes the changes in China's terms of trade with the background of economic globalization.After brief comments on the main developments and debates about TOT theory, this paper discusses the changes of China's terms of trade during different period based on 1980-2004 data. Result shows that the TOT of China is going to deteriorate in long run. The trend of manufactured goods'TOT has played a main role.Industrial structure, exchange rate regime, and foreign investment are the main factors that influence the changes of Chinese TOT. This paper analyzes mainly the industrial structure and trade mode evolution, and so on. Based on that, some problems are pointed out about China's industrial structure and trade structure, and respective policy suggestions are put forward. Then, the investigation is made to show how the Chinese TOT affected by RMB appreciating. Finally, this paper expatiates the effect mechanism of FDI inflow on China's TOT.At the end of the paper, a number of recommendations have been put forward to improve our TOT, and trade efficiency. Such as rely on technological progress to improve the industrial structure, improve its efficiency to guide the flow of foreign capital, and attention to avoid exchange rate risks.