Research On Foreign Trade Imbalance Of China

Under the trend of economic globalization, China continues to improve the opening leveland implement foreign trade policy of encouraging import and export gradually. Especiallyafter China join the WTO, foreign trade has been developing rapidly. Chinese import andexport scale has expanded and foreign exchange reserves has increased gradually. However,high-consumption and low value-added goods, whose main products are labor-intensiveproducts, largely exporting leads to Chinese persistent high trade surplus of goods. Contraryto that, the development of Chinese service trade falls behind, and the service trade deficit hasexpanded as well. The imbalance of foreign trade has become an important issue of Chineseeconomic development that can not be ignored.Long-term huge trade surplus means excessivedependence on foreign trade, leading to domestic economy’s more dependence oninternational market, deterioration of foreign trade environment and international tradefriction rise, which results in more pressure on RMB appreciation and restricts the sustainabledevelopment of foreign trade. Nevertheless unreasonable foreign trade structure has madedirect influence on upgrading of industrial structure. While processing and manufacturingindustry has expand gradually relying on cheap labor and abundant production resources, thedevelopment of the tertiary industry is relatively backward. The existent extensive growthmode of foreign trade is harmful to stability and sustainable development of foreign trade anddomestic economic.This paper studies Chinese foreign trade imbalance, which starts from the currentsituation of the foreign trade and analyze the changing trend of Chinese trade in goods andservices and foreign trade structure. After studying the causes and effects of Chinese foreigntrade imbalance and making empirical analysis on foreign trade imbalance factors byeconometric model, this article believes that factor endowments, large amount of foreigndirect investment, insufficient domestic demand and the foreign trade policies trend ofawarding exporting and limiting importing are responsible for foreign trade imbalance.Further more, the foreign trade imbalance could result in instability of Chinese foreign trade and economy, which is not conducive to the adjustment of foreign trade structure andindustrial structure. It sill gives more pressure on RMB appreciation and exacerbatesinternational trade friction. At last, the article puts forward corresponding path of promotingbalanced development of Chinese foreign trade according to the results of the analysis. Itrequires that our country transforms the growth mode of foreign trade and optimizes thestructure of export commodities, as well as boosts domestic demand and improves the scaleand quality of imports. At the same time, it is urgent to speed up the pace of transforming andupgrading processing trade and promote market diversification. Perfect mechanism for dealwith international trade frictions is still neesed to build up.