Study On The Technical Progress To The Price Terms Of Trade In China

Terms of trade is an indicator used to measure a country’s profitability and trade interests that exports relative to the imports in a given period, reflecting the country’s foreign trade situation. Based on the calculations of our total price of trade index between years 1981-2013, it is found that during the period of calculated trends, the trade index is showing like sine wave truncated at both ends. Because the export commodities’ situation is actually very complicated, the paper innovatively classified the import and export commodities in accordance with the level of technical content, separately measuring the trends of terms of trade in order to determine our country’s competitive industries. On this basis, the paper selecting typical factors that cause changes in the terms of trade, and then a comparative study of its role coefficient, to provide a theoretical basis and data support for upgrading the industrial structure and the next transformation of China’s foreign trade.Quite a lot factors that can cause the changes of trade conditions, this article will focus on the impact of technological progress on China’s terms of trade. In the theoretical part, the article does a review on the theoretical development of the terms of trade from the National type, category of technical progress and the endogenous & exogenous technological progress, and also the mechanism technological advance affects a country’s terms of trade were analyzed. And in the empirical part, with the quantile regression and state space model, the article respectively study the effects of different levels of the effect of technological progress in terms of trade, as well as the impact of technological advances changes on the terms of trade over the years. It is researched that technological advances can help improve the terms of trade, especially when the terms of trade at a high level, the effect is obvious most. And the effect of the terms of trade also showed some dynamic variability with different extent of technological progress. In addition, the article chooses economic growth, FDI, labor productivity etc. as secondary factors affecting trading conditions to make research more comprehensive and accurate.Based on empirical results, this article holds that to improve the terms of trade, achieve the transformation and upgrading of foreign trade, we should increase the research &development and the innovation of products, enhance the core competitiveness of products fatherly, continue to maintain a comparative advantage in the export industry, gradually adjust the high-tech industries, and at the same time the government should be selective, planed to attract foreign investment, improve the efficiency of utilization of foreign capital.