China’s Factors Market Distortion And Its Its Impact On Export

After china joined in the WORLD TRADE ORGANIZATION, the exports increase rapidly.and this period has become the fastest growing stage of Chinese export trade.And this phenomenon occurred at the peroid that china’s factor market is distorted. So at this background. the main purpose of this article is to analyze how factor market distortion affects the rapidly growing exports in our country. Previous researches on foreign trade economic effect of factor market distortion are more focused on analysising the influence of the factor market distortion on trade gains, but never empirically analysing how factor market distortion affects the exports. But this article empirically analyses the real influence of the internal opening factor-factor market distortion on exports. Therefore, at the beginning.the article reviews the relevant theory about market distortion,because the factor market distortion is a part of market distortion.Then based on this theory, the article analyses the forms and formation mechanism of factor market distortion in our country. And then applying the combined method of theoretical analysis and empirical analysis to research influence of factor market distortion on exports in our country. Applying the theory of comparative advantage of Ricardian as theoretical basis is to prove the factor market distortion is the source of our country’s export comparative advantage. In the empirical analysis,firstly, using Stochastic frontier analysis method measures the distortion degree of factor market of37industries in China during2002to2007.The result shows that the distortion degree of factor market of most of industries in our country are still increasing, the reason is that the expanded factor market distortion is an important cost of economic transformation and development.Secondly building a panel data model analysis the influnce of the industry distortion degree of factor market on exports. The empirical result indicates that the Chinese factor market distortion promots the export. While every country conducting foreign trade don’t pursue the rapid growth of exports, but the more trade interests and improve the welfare of the foreign trade. At present our country exports rise rapidly,but at the same time trade conditions are deteriorating. Therefore, the paper finally puts forward some corresponding policy and recommendations aiming at the problems that the export isn’t sustainable growth due to factor market distortion in order to realize our country’s export growth and realize the maximization of the trade benefits at the same time.