Study On Change Trend And Influencing Factors Of Sino-EU Terms Of Trade

The Sino-EU bilateral trade has experienced rapid development in recent years and EU has become China's largest trade partner from the year of 2004. However, there lacks the study of trade benefits distribution structure in the current Sino-EU bilateral trade literature in China. As an important indicator to measure the benefits a country gains from the international trade, terms of trade is one of the most basic problems in the study of international trade. That is why this paper takes the Sino-EU terms of trade as its study object. In the meantime, the current study of China's terms of trade is mainly based on the total trade flow of China, instead of specific markets. To study China's terms of trade on EU, this main market of China will help further the review of China's foreign trade, and provide the basis for the development and adjustment of China's foreign trade strategies and policies.After conducting the literature review on terms of trade, this paper analyzes the status quo of Sino-EU commodity trade development and uses detailed data to conclude that in the period of 1992 to 2003 Sino-EU income terms of trade has been improved while Sino-EU price terms of trade has deteriorated. Then by logical reasoning and empirical analysis as well as multiple regression model, we conclude four influencing factors on Sino-EU income terms of trade, i.e. China's economic growth, EU's economic growth, the commodity structure of China's export to EU, and foreign investment in China.In order to clearly understand the influence path of the above four factors on Sino-EU income terms of trade, this paper concludes after conducting regression analysis:①Though China's economic reform has caused the deterioration of Sino-EU's price terms of trade, it has greatly increased the Chinese export to EU thus generally has positive impact on the improvement of Sino-EU income terms of trade.②Under the current commodity structure of China's trade with EU, the EU economic growth has passive impact on the Chinese price terms of trade, but it still improved the Sino-EU income terms of trade by increasing China's export to EU.③Foreign investment in China did not have direct impact on Sino-EU income terms of trade, but it also had some positive impact on the improvement of Sino-EU income terms of trade by expanding China's export. Lastly, we summarize this paper and put forward some suggestions on China's trade policies.