A Research On The Change In Sino-EU Terms Of Trade

Terms of trade is a very important indicator which is used to measure the export profitability relative to import and the trade interests of the target in a country during a given period . The very frequently-used forms of terms of trade are: Net Barter Terms of Trade, Income Terms of Trade,Factor Terms of Trade.They measure the trade benefit from different aspects.Meanwhile, Net Barte Terms of Trade is most widely used because of its easy calculation. Since the Prebisch-Singer thesis,the terms of trade became a centre concept for developing countries. .However,there is little literature on China's terms of trade, especially with the EU. Considering EU has beeome China's biggest partner and China is the second biggest in 2006,and China-EU's trading pattern must be changed because of the financial crisis in 2008 ,the terms of trade between these two large economics is worthy to study.In recent years from the studies by scholars,the situation of Sino-EU terms of trade,especially NBTT,is not optimistic.Worsening terms of trade means the increasing trade losses,and the economic growth will face increasing pressure.With China's access to the WTO,with more and more dependence on foreign trade,and with more competitive international trade,we must consider how to rationally adjust trade policies and macroeconomic policies in order to facilitate more long-term rapid economic development.The terms of trade is undoubtedly an important reference.The central research question of the thesis is:What is the extent of terms of trade between China and EU after seventy or eighty of the last century. What are determines of Sino-EU terms of trade? In order to anwser these questions,this paper include five chapters.Chapter1, this paper makes a summary of the research on the relationship between benefit and trade written by domestic and foreign scholars. The paper expatiated the Prebisch-Singer thesis and theory of immiserizing growth,expand the immiserizing growth to the growth of the relative poor,and pointed out that the developing countries as a whole,their terms of trade remains deteriorating situation,which have a great impact on their economic growth,and which have became the main reason of the relative poverty in the whole world. Chapter2 is about the basic theory of the terms of trade. the paper sorted and analyzed the economic meaning of the terms of trade,and the basic conclusions of the paper are:(1)terms of trade reflects not only the absolute change of a country's trade gains but also the relative change;(2)the terms of trade reveal one country's position in the international political and economic situation,it deserves attention. These basic theories is to explore the terms of trade and the relationship with the economic growth. Chapter3,. this paper describes the development of Sino-EU ltrade. By reviewing the course of development of the EU's direct investment in China and summarizing periodical change of the Sino-EU trade, this study clarifies o the trade between China and EU has great complementarity and development potential. In different mode of economic growth,the impact of the economic growth on the terms of trade is different. Chapter4, The basic meaning of the terms of trade were sorted and analyzed about the impacts from the FDI,trade policy and the exchange rate.This part is about the relationship between the terms of trade and the economic growth.As the development of international trade,the relationship become increasingly close,and in-depth analysis on the relationship between them is what we must do in developing countries. Chapter5, on the basis of the above qualitative analysis this paper puts forward relative countermeasures and suggestions on promoting EU's direct investment in China and Sino-EU bilateral trade as well as deepening comprehensive strategic partnership between China and EU in the future after financal crisis, such as how to coordinate foreign investment and trade policy, actively guide EU's direct investment in China, increase the breadth and depth of opening up of the service sector, implement "going out" strategy and change the method of utilizing foreign capital..As to China, firstly,trade barriers are the direct influential factors on the extent of term of trade. To eliminate technical barriers, the two economies should cooperate on the product regulations and standards under the WTO Technical to Barrier Trade Agreement. The protection of health, safety, national security and environment should be separated from the incentives of trade protectionism. A freer trade environment will benefit both sides in the long run. Secondly, FDI should be categorized according to their nature and treated differently.For example, if the investment is going to put into the high-tech industry with advanced technology from abroad, it should be encouraged and supported by preferential terms. If the investment is pouring to the medium-tech industry with many similar firms existed in market, it should be given same treatment as the domestic firms to on FDI firms. Moreover, it is also the time to encourage the competitive domestic invest abroad by giving them special terms. Through the proper adjustment policies, it is possible to encourage two-way trade flow. Thirdly, as technology innovation is very crucial to the sustainable development in nowadays economy, it also shows influence on IIT. Government should put more money on technology innovation, expecting more returns in the long run. The protection of intellectual property rights should also be strengthened both from the update legislation and the effective enforcement of the existing laws on IPRsWhat is gratifying is that the impact of our NBTT's deterioration and fluctuations on the economic growth is not significant.On this point,our country is different from many other developing countries,mainly because over the years our country has maintained rapid economic growth.From the viewpoint of economic growth,we cansee the deterioration of NBTT as the cost of growth,and this cost is still at least within the scope we can take.As China's overall national strength further enhanced, and the development of scientific and technological progress,we may reverse the situation and reduce the cost.This also requires us as soon as possible to perfect the market economic system,speed up scientific and technological progress and independent innovation,improve the government's macro-economic management capacity,it is the only way to achieve the goal of catching up,and to achieve long-term goal of socialism as soon as possible.