Open To Trade The Dynamic Effect Of China's Financial Development Research

The late20th century, the development of the world’s economy shows the trend of globalization and integration, the global economic environment has more influence on the development of a country’s economy, and international trade becomes an important part of this trend. International trade is particularly important to China’s economic development. After the reform and opening up policy in1978, exports become one significant contribution to China’s economic development, which is also an important component in the three carriages. So, the importance of international trade is evident. At the same time, China’s financial sector is also showing a trend of rapid development, the signs of which are the continuous growth of the financial scale, adjustment of the financial structure and improvement of the financial efficiency, and many regions begin to pay attention to the development of the financial industry. In this context, to find out the impact of financial development of our country and different regions to the trade openness is practical significant. Not only can this research provides references and policy recommendations to our country and the region’s financial development and financial reforms, but also help for our country’s trade structure improvements, international competitiveness enhance.As a branch of the Theory of Economic Development, this article, firstly, reviews of the relationship between financial development, trade openness and economic growth systematically, to ensure that both aspects play significant role in economic growth, and then combs the important literatures of the impact of financial development to the trade openness. Subsequently, this article analyses the mechanism of financial development to trade openness from three aspects, the macro level, micro level and policy level. Combined with previous literature studies and the mechanism analysis, this article choses the financial scale, financial structure and financial efficiency as a measure of financial development indicators, uses vector error correction model, from the national perspective and a regional perspective, respectively, to empirically analyze the dynamic effects of the financial development to trade openness.By contrast to China’s overall and the regional results in this article, conclusions are as follows:(1) in national and regional perspective, the financial scale has a positive impact to the trade openness;(2) the financial structure has a significant the impact to the trade openness, national and eastern region have negative impact, northeast, central and western regions have positive impact, reflecting the different financial markets’influence to the regional trade openness;(3) from the overall aspect, the financial efficiency has positive impact, more developed regions has the greater the positive impact;(4) from the overall aspect, China’s financial development has significant impact on the trade openness, in which, the financial scale and financial structure have more obvious impact to trade openness.Finally, combined with the conclusions of this article, we give policy recommendations which are suited to the characteristics of China’s regional development.