The Status Quo Of China's Foreign Trade Structure And Conversion

The structure of foreign trade has tended to be highly optimized since China adopted reform and open policy. In 1986, the total export amount of industrial products surpassed that of primary products, which became the first turning point of optimization of foreign trade structure. In 1995, the total export amount of capital-intensive products represented by machinery and electrical goods surpassed that of labor-intensive products represented by textile and clothing, which became the second turning point. This optimization causes rapid development of foreign trade and also deterioration of foreign trade terms and conditions in China. This thesis proceeds its analysis based on this fact. Firstly, it is concluded that the transformation of China foreign trade structure has got support from comparative advantage theory after empirical analysis on the structure of China foreign trade and index of dominant comparative advantage, index of variation for exporting goods. Secondly, while studying the reasons and effects of optimization of China foreign trade structure, it is indicated that this optimization results from rapid growth of Chinese economy, mainly because of the pull effect of processing trade, which generally reflects the development of comparative advantage in China . But this optimization does not improve the status and profit of China in international division of labor, on the contrary, China foreign trade terms and conditions has tended to be worsened, which increase difficulties for China to get continuous development and economic growth. Therefore, China should carry out its policy of transforming the structure of foreign trade without delay. Lastly, this thesis probes into the target and route of foreign trade structure transformation in China. It is concluded that China should transform its foreign trade structure based on comparative advantage theory .combine congenital and postnatal comparative advantages, and lay out the road of keeping the importance oflabor-intensive industry in export structure on the one hand, and creating international competitiveness in capital-intensive industry on the other hand.