Empirical Study Of Ternary Margins Of The Growth Of Trade On The Business Cycle Co-movement Of China And The Major Trade Partners

In the context of an open economy of the further advance of economic globalization and the vigorous development of regional economic integration, since the reform and opening up, especially our country successfully joined the WTO in 2001, the intergration degree of Chinese macroeconomy and the world economy is becoming higher, which forms an interactive situation of you have me and I have you, the feature of between China and foreign countries economic cycle co-movement(synchronization) is enhancing. In the process of embracing the world economy, Our country 30 years of economic construction has achieved a miracle of average annual growth of 9.8%, but after the 2008 financial crisis, the pace of development of China’s economy began to slow down, the trend of macroeconomic development is facing to the turning point(Pei Changhong,2013), one of the important reasons is the deterioration of the external environment.When our country macroeconomy is getting more and more negative impact of the fluctuations of the external economies, how to deal with the negative impact of the fluctuation of the external economic cycle on the economic construction of our country? How was the external shock transmitted to China? What are the factors of negative shocks? The degree of impact of developed economies and developing economies cycle fluctuations on our country macroeconomic is different? These issues are important concerns of macroeconomic monitoring external economic risk, which is the focus of this article should be solved.About the research in this area, scholars generally analyze the economic cycle co-movement of two countries from the point of foreign trade, international capital flow, industrial structure similarity, trade object country type etc. International trade channel conduction mechanism is a hot research, however, these studies are wider, and no further analysis, The relevant theoretical results of the structural decomposition of foreign trade in the heterogeneous enterprise trade theory are helpful to further deepen the further expansion of this problem. In view of this, on the basis of previous studies, I chose “empirical study of ternary margins of the growth of trade on the business cycle co-movement of China and the major trade partners” as a research topic. The full text is organized as follows.The first part, the introduction. This section describes the research background, research significance, relevant literature combing, literature review, writing ideas, structure of the paper and the writing method of the paper, the paper’s innovative points and so on.The second part, the research on the conduction mechanism of the international business cycle co-movement. The part analysis the conduction mechanism of foreign trade on international business cycle co-movement from qualitative analysis of micro perspective and qualitative analysis of macroeconomic level by IS-LM model and DSGE models(dynamic stochastic general equilibrium model). And then, the transmission mechanism of international capital flow and industrial structure similarity are briefly introduced.The third part, the analysis of the volatility feature of the international business cycle co-movement between China and major trade partners. First, build and measure the business cycle co-movement index of two countries; Second, build and measure the bilateral trade strength index of two countries; Finally, using the chart method to describe the characteristics of the business cycle co-movement between China and the major trade partners.The fourth part, the quantitative analysis of the impact of ternary margins of the growth of trade on the business cycle co-movement of China and the major trade parters. Though the theoretical model of the second chapter, utilizing the 1995-2011 bilateral trade panel data of between China and 17 major trade partners, the effect of ternary margins of the growth of trade on the business cycle co-movement are discussed, and the other factors were studied, such as bilateral FDI intensity, industrial structure similarity, distance trade, whether common language and so on.The five part, the conclusions and recommendations. From 1995-2010, the trend of the business cycle co-movement between China and major trade partners is increasing, especially with the developing countries trade partners. The marginal intensity of bilateral trade expansion has significantly positive effect on the economic cycle co-movement between China and the major trade partners; the marginal strength of bilateral trade, the price marginal intensity of bilateral trade is not the main factor that affect the economic cycle co-movement of China and foreign countries; the greater the intensity of the bilateral FDI between China and foreign countries, the higher the degree of the bilateral industrial structure, the stronger the economic cycle co-movement of the two countries. In this regard, these suggestions are: establishing and improving the risk warning mechanism of our country and external economies economic cycle co-movement; vigorously exploring the potential of domestic consumption, reasonably coordinating the proportion of the macroeconomy driven by the “three carriages”; changing trade growth mode, paying more attention to the “quality”(price) development, rather than simply “quantity” expansion, trying to work hard at the margin of bilateral trade prices, which has an indispensable role in the response to the negative impact of the external economic cycle fluctuations; optimizing and upgrading the domestic industrial structure, expanding the industrial gap with the extensive economy of developing countries, reducing its industrial structure similarity, thereby reducing damage of the economic fluctuations from developing countries on Chinese macroeconomic disruption.