Research On Terms Of Trade Of China's Industrial Manufactured Products

Terms of Trade are important indications for computing benefits which a nation could receive from international trade. So it is deeply concerned by every economy to get the favorable terms of trade and to share more behalf in foreign trade.Since the middle of the 90's, our foreign trade has been developing greatly.The value of imports and exports has reached to 1760.69 billion dollars in 2006 from 280.86 billion dollars in 1995; Industrial manufactured products has become the leading part of international trade: In 2006, the value of exports of China's industrialmanufactured products has reached to 915.8 billion dollars, which accounts 94.7% of our national exports value. Foreign trade of industrial manufactured products has become a strong impetus to our economic growth. But, there are many arguments on whether there is a descending trend in our terms of trade and whether there is immiserizing growth. So this thesis, focusing on the terms of trade of the dominating industrial manufactured products, probes into the change of these terms of trade since 1995, so as to reveal the status of China's international trade benefit. Based on the aforementioned analysis, this thesis can be divided into the following parts:First, this thesis reviews the relative references home and abroad to know about the research results on this subject, which becomes the basis of the following analysis. Second, this paper calculates the relative price index of our country's terms of trade of industrial manufactured products from 1995 to 2006 using Passche price index. With analysis of weakness and strength of China's foreign trade development and some data information, this thesis gets the results that China's industrial manufactured products'net barter terms of trade has a declining trend while its income terms and factorial terms of trade have been improved.Third, this thesis performs theoretical analysis of the main influencing factors to the terms of trade, then analyzes empirically the causes of the change in the net barter terms of trade of China's industrial manufactured products by means of regression analysis, which can be quantitied. Then performs cointegration test and causality test with the relative data, which shows the correlativity and the causality between the terms of trade and the influencing factors.On the basis of the above conclusions, we can find some clues in terms of industrial policy, foreign trade policy and exchange rate policy to improve China's terms of trade.