From The Perspective Of Trade And Economic Interdependence Between Countries

As economic globalization is rapidly developing, politics, economy and culture relations among countries have been undergoing tremendous changes. Undoubtedly, Economic interest has become the key when making foreign policies. In 2008, originated from United States, financial crisis fast spread around the world. And then almost every country's real economy got damaged one after another, which means counties have been tightly connected unprecedentedly. The degree of interdependence among countries is getting higher and higher.In this paper, firstly the channels of connecting different countries and their scales were compared by detailed statistics. The result shows links among countries by trade are more significant than other ways. As for China, in the past over 30 years, reform and openness has drove international trade, FDI, ODI and international cooperation to grow very fast. Still international trade is the main window to link other countries. So it is very important to do research on interdependence among countries by trade links.Based on domestic and foreign research before, it is understood that the essence of interdependence among countries is how change of one country's national income affects other countries. According to this definition, a linear dynamic matrix model with no considering substitute among countries was conducted, which was usually used when doing input-output analysis.By this model and matrix of exports of all countries in 2008, direct effect, total effect and feedback effect was calculated precisely. And then one example was made to demonstrate how to use this model to analyze dynamic changes of all countries when one country's national income changed. At last, by using trade links of 2008, China-US's interdependence was deeply dissected through results of dynamic analysis of mathematic model in this paper. Conclusion is that what America benefited from China's economic growth by trade system is more than what China did by the number of total effects. US public feel that China got much more benefits from trade. This is only because they just saw direct effects. So US should not want to limit China's economic growth. This conclusion tells us that international issues also need economic growth. Fast economic growth and offering benefits to partner countries will weaken the conflicts in the field of ideology, reduce the intention to contain China's peaceful rise and help China earn friends.