The Main Export Commodities' Elasticity Variation Trend

This paper uses the Absolute Advantage Theory as the basic point.To find the commodities structure and absolute advantage of China,this paper compares elasticity with Germany and India including the export income elasticity and price elasticity of the main commodities in China.This article respectively made two kinds of calculation – long-term elastic calculation(1999-2014)and short-term elastic calculation(1999-2006,2007-2014).Comparison results showed that 6 classes in labor-intensive product(classified by raw material manufactured goods),the absolute advantage of China has completely disappeared,and India has shown her advantages,while Germany has no advantage.On 8 classes product(miscellaneous products),China,Germany and India are similar to the status of each other.According to the elastic change,China's advantage is bigger than Germany,and the German advantage is bigger than India.Through the elasticity change,India obtained the stable advantages with cheap labor,but Germany and China's strength is very strong,far higher than India.In 7 classes product(machinery and transport equipment),as the traditional developed industrial country,the first mover advantage of Germany still exists.Because of the accumulation of technology,Germany has the absolute advantage in this kind of product.Combined with its trend analysis,the advantage of Germany is still expanding,so China won't surpass Germany on this products in ten years.According to the analysis of absolute advantages and elasticity,this paper puts forward the following policy recommendations: China should strengthen technological innovation,accelerate technological accumulation rate,to sustain the absolute advantage of SITC7.Give policy support to SITC7 and SITC8 to encourage the export.Encourage foreign enterprises to invest in China,to obtain more capital accumulation,to reduce the price of capital to gain price advantage.Encourage enterprises to transfer to the advantage industry.Establish trade associations,to avoid further price competition.