Research On The Application Of Predicting Methods In China's Foreign Trade

The import and export trade has been playing an increasingly important part in our national economy. Whether it can smoothly develop has been immediately concerned with China's competitive forces. According to the predicting resultes, we can make correct evaluation about domestic economy and, set up foreign trade policy which suites to China's actual conditions, so that it's favourable to the development of our foreign economy and trade. But there are many uncertain elements in China's internal and external environments, which would bring complexity to the foreign trade system. Also, the incomplete historical data of our foreign trade would add difficulty to the predicting practice, as well as the uncertainty to what predicting method should be chosen. Therefore, selecting a suitable method for national situations, making a precise prediction of total imports and exports would make great significance.This paper firstly has introduced a general idea to predict foreign trade, which contains setting predicting purposes; collecting predicting informations; choosing predicting method and evaluating predicting results. All the specific predicting practice should follow this way in applications, except in principles and operations.Next, this paper makes a reference to all the methods predicting China's imports and exports. The methods generally include quantitative and qualitative predicting. Concretely , there are quantitative predicting ; Multi-hierarchic Recursive Regression Algorithm; econometric models; Autoregressive Moving Average Model(ARIMA); Artificial Neural Network and GM(1,1). Each method is based on different mathematical theories or models. So everyone has differences in the requirement of data, also has defferences in the predicting precision and period.Then, the theories and the mathematical models of every predicting methods have been introduced in this paper, as well as their corresponding operational procedures. After that, methods would be used to predict China's foreign trade volume. The historical data would also be used to gain the trade volume during a certain period in the future.Followed up with the analysing and comparing of the predicting methods, the characteristic of every predicting theory will be discussed firstly. Then the advantages and disadvantages of each predicting method.will be distinguished. After that, the predicting precision and the predicting period will also be compared. Generally speaking, the shorter the predicting period is, the greater changes and errors would be reacted in the results.In the summary, by discussing theories; characteristics; precision; period of the predicting methods involved above, we can draw a conclution that: in order to choose a favorable predicting method, it's better to proceed from the predicting purposes and precision and, according to the characteristics of each model, relating to the availability of historical data, and then select a proper predicting method.