The Relationship Between China’s Foreign Trade Structure And Industrial Structure

Since the implementation of the reform and opening- up policy, our economy has made many remarkable achievements, considerable changes have taken place in trade patterns and industrial structure, the foreign trade deve lopment becomes one of the "troika" of China’s economic growth, and plays a vital role in stable and sustained growth for economy. C hina’s foreign trade structure and industrial structure optimized a lot, but there are also some disadvantages. Under the situation that transformation of economic development patterns and change of international environment, adjusting the relations between industrial structure and trade structure to make the benign interaction between foreign trade and industrial structure is an important issue for the rapid and sustainable development of our economy.This article first makes the quantitative analysis of the change trend of foreign trade structure and industrial structure since the reform and opening up, uses the deviation method to analyze the correlation between the foreign trade structure in goods and the physical plant structure, as well as the correlation between the structure of foreign trade in services and service industry structure. Finally, through constructing the VAR model, using the methods as cointegration equation, Granger causality test, impulse response and variance decomposition etc. to carry on empirical analysis about the correlation between the change of trade structure in goods and physical plant structure, also the correlation between the change of foreign trade structure in services and service industry structure.Results indicate the following conclusions: first, Service trade goods trade development lags behind relatively, and the service trade structure is unreasonable, the traditional services still dominate, though emerging services for rapid growth, but the share is still small.Second, on the whole, there is deviation between structure of trade in goods and physical plant industrial structure, but deviation degree is smaller and smaller. Deviation also exists between service trade structure and service industrial structure, but the deviation degree is getting bigger. Third, there exists a long-term equilibrium relationship between the change of China’s import and export structure in goods trade and the change of industrial structure: there is positive correlation between export structure change and industrial structure change, but inverse correlation between import structure change and industrial structure change. There is one-way causality between physical plant industrial structure change and export structure change of trade in goods, the former is the Granger cause of the latter; physical plant industrial structure change is primarily affected by itself, almost not by the change of import and export structure of trade in goods. Physical plant industrial structure change has a bigger effect on export’s structure of trade in goods than the import’s. There exists a long-term equilibrium relationship between the change of China’s import and export structure of service trade and the service industrial structure, the change of import and export structure positively relate to industrial structure. There is one-way causality between the industrial structure change and the service trade structure change, the service trade export structure change is the Granger cause of the change of the industrial structure and there is no causal relationship between industrial structure change and the service trade import structure change. C hanges of service industrial structure are greatly influenced by the service trade export structure changes. The service trade export structure changes mainly influenced by itself. The service industry structure change has a greater impact on t he change of service trade import structure than the change of export structure.