The Relationship Between Trade Liberalization And The Disparity Of Income Distribution

In the past twenty years of economic reform, China's economy has been growing fast. By the end of 2006, China's GDP has been 21 trillion, and second to the U.S. on the contribution to the world economy's growth. Nowadays, China has joined the trend of globalization and trade liberalization has also been accelerated by China's entry into WTO. With the development of economic reform and trade liberalization, they not only have made great success to China, but also influenced China's income distribution. Although poverty problem has been improved by strong economic growth, China's income distribution has been deteriorated. If the disparity of income distribution did not well solved, it will influence not only the enacting policy of foreign trade, but also the stability of sociopolitical and the deep of economic reform, the development of economy.This paper is divided into four parts. Chapter One makes a review of the relationship between trade liberalization and income distribution. Chapter Two presents the measurement of trade liberalization and the disparity of income distribution after the explanation of the concept of the trade liberalization, and then it reviews the progress of trade liberalization as well as the status of China's income distribution. Chapter Three demonstrates the relationship between trade liberalization and income distribution theoretically. Chapter Four tests the relationship between trade liberalization and the disparity of income distribution empirically by econometrics. Through the empirical analysis, this paper tries to explain the cause of the disparity of income distribution and in light of the analysis relevant suggestions are provided.