Internatal Trade,FDI,Urbanization And The Urban-Rural Income Gap

Since Chinese economic reform, especially since1990s, the urban-rural income gap comes with the high-speed economic development has become so large that the society pay high attention to it, particularly the Party indicated to low the urban-rural income gap at the eighteenth National Congress, and yet the urban-rural income gap suffer various influences at the background of globalization currently. This paper inspects whether the international trade and foreign direct investment influence China urban-rural income gap based on this theoretical background. Take international trade and Foreign direct investment as the main research contents, this paper chooses eleven panel data of China’s provinces overall considering factor levels. First status analysis, then generalized method of moments adding control variable to conduct dynamic panel empirical test, inspect the impact of international trade and FDI on the urban-rural income gap is high or low from the inter-provincial data. Via demonstration we found the geographical and time factors partly interprets the effects on the urban-rural income gap, the international trade lows the urban-rural income gap, the foreign direct investment widens, the human capital and the total factor productivity relieves, the per capita physical capital widens.On this basis,the paper goes on to discuss how international trade and FDI influences the urban-rural income gap through the urbanization, the result is the urbanization remits it. At last, this paper came up with the relevant policy suggestion at the basis on status and physical analysis.