Trade Liberalization And The Effect On Poverty Reduction

Poverty has always been a problem widely concerned by countries all over the world.In recent years,under the leadership of Comrade Xi Jinping as the core of the CPC Central Committee,the regions of our country have taken targeted measures in poverty alleviation,poverty and poverty rate continued to decline.The growth of per capita income and the improvement of living standard in poor areas have laid a solid foundation for the impoverished areas to enter into a well-off society with the whole country by 2020.In addition,the"The Belt and Road"is a positi.ve response of China to the changing political and economic pattern of the world,the proposed initiative will undoubtedly have an effect on our economy and promote the coordinated development of the central and western regions.Therefore,the impact of trade liberalization on poverty in the central and western regions of China will be a matter of concern,which will contribute to the further implementation of the policy of”take targeted measures to help people lift themselves out of poverty".Based on the data of 2000-2015 years in the central and western regions of China,the paper draws lessons from the model used by Dollar and Kraay in the study of the relationship between economic growth and poverty.The model is changed slightly to add trade liberalization variables,with the income of the lowest 10%and 20%as the dependent variables.The paper will further study the effect of trade liberalization on poverty reduction with the changed model.In the empirical process,the square of the degree of trade dependence is added to verify whether there is an inverted "U" relationship between trade liberalization and income of poor,the intersection term of time dummy variables and trade dependence is added to verify that the proposal of the"The Belt and Road"has influenced the poverty in the central and western regions of our country,the main conclusions are as follows:Trade liberalization has a significant positive effect on the income of the poor,and there is an inverse "U" relationship between them.As far as the regions are concerned,trade liberalization has a significant positive effect on the income of the poor in the western region,but the effect is not significant for the central region.The proposal of"The Belt and Road"can significantly promote the income of the poor increased,and at the same time it also brings the expansion of income gap.Trade liberalization has no influence on the income share of the poor in the central and western regions.The main factor that affect the relative poverty in the central and western regions is the level of education.The longer the Per capita education years,the higher the education level,the lower the income share of the poor and the greater the poverty gap.The increase of proportion of industrial output in GDP significantly increased the income of the poor.Government expenditure has a significant positive effect on the income of the poor.Based on the empirical analysis and the development of the central and western regions in recent years,this paper puts forward some policy suggestions for the further poverty reduction of the central and western regions of China.