An Empirical Analysis Of The Effect On Wage Gap By International Trade, Technological Progress Of China

The continuous formation of trade liberalization, economic globalization and transnationalcorporations and the introduction of foreign capital have played a significant role in promotingthe global economy. In the21st century, for the strengthened cooperation and mutually promoteddevelopment among countries, it has become an indivisible entity. While with the rapideconomic development which promoted by trade liberalization, it also brought some negativeeffects, for example, it has also brought a huge impact to the wage income distribution of theboth sides. And it accelerates advances of both sides in technology, which further have a hugeimpact on the wage income distribution of the both sides. Many empirical studies found that,from the beginning in the seventies or eighties of the20thcentury, as the improvement of theinternational trade and the technological progress, the gap of relative wage of high and low skillworkers is showing an upward trend in countries. So it becomes a hot-button issue about thestudy of the relationship among the international trade, technological progress and the wage gap.This article first simply grooms the function mechanism of several of international trade andtechnological progress to the wage gap which has appeared in the literature. Then the articleanalyzes the current situation of China’s international trade, technological progress, and thewage gap. Finally, on the basis of the qualitative analysis, the article analysis the relationship ofour country’s international trade, technological progress, and the wage gap from two degree of31administrative districts and the three regional areas which based on the panel data of13yearsin our31administrative districts.Through the analysis, it draws some conclusions: first, while international trade expands theoverall wage gap of our country, it narrows the wage gap between regions. Say specially,international trade reduced wage gap between regions of the eastern region and the westernregion, while it expanded the wage gap between regions of the middle region. Second, thetechnological progress in expanding the overall wage gap also expanded the wage gap betweenregions. Say specially, technical progress reducing the wage gap between regions of the easternand central areas, and expanded the wage gap between regions in the west areas, thus expandingwage gaps among regions in China as a whole. Therefore, in the process of adjustment andupgrading of industrial structure in China, in the use of the positive impact of the wage gapbrought by the international trade, we also need to note the negative effect of the wage gap brought by the international trade. That is to say, in insist of the opening policy, we need toadjust reasonably the industrial structure to avoid the negative impact of the wage gap broughtby the international trade in China. As the fundamental way to enhance China’s economicstrength, despite it brought the widen of the wage gap, we also need to continue improve thetechnological progress, but at the same time, we need to take some measure to pass thetechnology between areas and the workers in high and low skills, and we need take out morereasonable income distribution policy to reduce the impact of the wage gap brought bytechnological progress as possible.