Analysis How The Debt Crisis Effect The Trade Structure Between China And The Euro Area And Its Influence Factors

In the new century，due to the rapid growth of China’s trade, China has surpassedGermany and Japan to become the world’s second-largest trading nation after theU.S..It can be said that China has become a large trading country, but the growth intrade alone is not sufficient to become an international world trade power, and weneed to enhance the quality of Chinese exports. The trade structure is a veryimportant standard to measure the quality of the trade of economies. As a developingcountry, China’s trade structure need to be improved an adjusted. More importantly,the trade structure is not only related to the trade itself, but also the guidance tooptimization and upgrading of China’s industrial structure.In the2007, subprime crisis erupted in the United States, and full-blown crisistook place the following year then spread to the whole world, As the euro-zonecountries have close relations with the U.S., its national economy suffered a greatblow. In order to deal with the crisis, many countries resort to increase the fiscaldeficit in the euro zone to promote economic recovery, resulting in some economicweak government debt increased significantly in the proportion of the nationaleconomy and the sovereign credit rating was reduced several times. What’s more, iteventually led to the outbreak of the debt crisis. The euro zone, as the main body ofthe EU, whose trade with China accounted for vast majority of the trade betweenChina and the EU. After the enlargement of EU, it has surpassed the U.S. to becomethe largest trading partner of China, in which case, the outbreak of the debt crisis inEurope is bound to adversely affect China’s trade. Trade structure adjustment has a very important role in enhancing trade competitiveness and guiding the optimizationand upgrading of industrial structure. Therefore, to study the structure of the tradewith the euro area has a very important practical significance in the context of theEuropean debt crisis.Tradables are usually simply be divided into primary goods and industrialmanufactured goods, but in reality, industrial manufactured goods accounted formore than90%among the total volume of trade in both China and the euro zone,which makes the practical significance of the goods division above is low. In thisarticle, tradables are divided into capital-intensive and labor-intensive goods.Summarizing the impact of the European debt crisis on China-EU trade structure byanalyzing the proportion of capital-intensive products in trade goods, the TC Index,the RCA index and G-L index changes, then we found that among the exported goodsof the euro-zone countries to China, capital-intensive goods accounted for a greaterproportion, however since the outbreak of the debt crisis in Europe, the ratio began todecline, meanwhile, China experienced relatively large fluctuations in the trade ofcapital-intensive goods during the crisis, but the general trend is increasing. At thesame time, the TC index, the RCA index and the G-L index shows that the tradestructure of China still needs to be improved, and the situation is not optimistic.According to the classification of trade goods, the proportion of capital-intensivegoods among trade goods is an important indicator to measure the trade structure,therefore capital-intensive goods trade has a major significance in trade structure.This article uses the classic gravity model to analyze how economic factors affecttrade in capital-intensive goods. Compare to the importing countries, the factors ofeconomies scale in exporters has a greater impact on trade between China and theeuro area in capital-intensive goods and the price Index is not significant, but theimpact of currency circulation significantly, the impact of the financial situation inChina is not significant, the euro zone’s fiscal import and export trade has a significant impact. It was also found that Chinese capital-intensive products relativeto the euro-zone countries with a high degree of price stickiness, low profit levels,responsive transportation costs. Finally, based on the qualitative and quantitativeanalysis to draw conclusions and make policy recommendations on the basis of theseconclusions.