The Study On Restructuring Of China's Foreigh Trade

"Terms of trade"and"comparative advantage"are considered to be the two mostbasic questions of international trade. All the countries are very concerned about thetrend of the two. Many scholars at home and abroad have found that some developingcountries which trade on the basis of"comparative advantage"may be trapped in acomparative advantage trap", or even face the"Immiserizing Growth".However, these studies mostly determine the validity of comparative advantagestrategy according to the change of comparative advantage or terms of tradeunilaterally, which, in practice, may change in the directionsinconsistency. This paper analyzes the status of China's export trade from bothcomparative advantage and terms of trade.First of all, based on China's export and import data by HS classification over theyears from 2001 to 2008, this paper classifies all goods into five types, that is,agricultural products, resource—intensive products, labor—intensiveproducts, technology—intensive products and capital—intensive products. Then, thepaper calculate the comparative advantages of the five types of commodities byrevealed comparative advantage"(RCA)index and the level of internationalspecialization index(LFI), as well as the intra-industry trade index,price terms oftrade and income terms of trade. After that, conclusions as follows are made on thecomparative analysis of the calculation results: (1) Generally, the situation of China's overall trade since 2001 is far from satisfactory. The goods of comparative advantageare still concentrated on labor—intensive products and capital—intensive products.The income terms of trade in most commodities continue to improve, but the priceterms of trade is gradually deteriorating, indicating that China's trade growth is inthe extensive form of quantity expanding. (2) China's comparative advantage in thegoods of traditional comparative advantage, such as labor—intensive products,is weakening. (3)The resources and agricultural commodities are in the condition ofcomparative disadvantage which is still worsening. (4) The export oftechnology—intensive goods is still limited and their degree of specialization is still ata low level. (5) Although the specialization degree of the capital—intensive goods isnot high, its comparative advantage is gradually strengthened and price terms oftrade are gradually improving. In short, according to the calculation results ofcomparative advantage and terms of trade, China's foreign trade of goods may havebeen trapped in a"comparative advantage trap".Finally, the paper puts forward a fewpolicy suggestions for the restructuring of trade.