A Study Of The Impact Of International Trade On Income Inequality In China Residents

The income distribution is one of the most hot problems in China this time. There are manyresearch about the reasons of income inequality. Retrospect, with the rapid growth of China’seconomy since the reform and opening up in1978, the income inequality has been rapid growthat the same time. For this reason, shall we reconsider the relationship between internationaltrade and income inequality in china? Based on those blackground, this article hope to makesome reasonable judgments about the influencing extent and mechanism as well as the problemsbetween international trade and income inequality, which are helpful for policy making.In this paper,there is a theory and literature review of previous studies of international tradeand income inequality. After that, this paper summed up the intenational trade impact China’sincome inequality is mainly formed by five mechanism: the commodity price mechanism, thetechnological progress mechanism, employment wage mechanism, economic growth mechanismand government policies mechanism. Through the establishment of the econometric model,cointegration test of international trade and income gap between the years of1981-2010datatime series regression analysis, we find that the international trade expand the income gap inChina and in the left of the inverted U-curve. Combined with China’s actual situation, the paperdivided into three thematic summarized analysis found: the development of international tradepromoted the expansion of China’s regional income inequality and wage gap; China’s foregintrade policy and its changes, tax, for example, expandded the incom inequality. Concluded theanalysis, the paper put forward policy recommendations such as coordinate the development ofregional trade, focusing on the equitable redistribution and strengthen national education in thefinal.