Impact Of Foreign Trade On Urban-rural Household Income GAP In Eastern China

The urban-rural income gap accounts for more than half of China’s overall income gap,and it has always been a major topic of great concern to Chinese governments and scholars.Many studies analyze the urban-rural income gap from a trade perspective.Among them,there are few documents that systematically explain what kind of transmission path is used to influence the income gap between urban and rural areas.In addition,there are significant differences in the degree of foreign trade development in the eastern,central and western regions of China,and there is less literature on detailed research on a particular region alone,which easily conceals the unique characteristics of the region.This paper selects the eastern region as the research object for systematic analysis because the region is active in foreign exchanges,and the annual import and export trade accounts for more than 80% of the total trade volume of our country,which is a model of regional economy.In addition,with the upgrading and optimization of trade patterns and structures in the eastern region in the past decade,its foreign trade development has gradually shifted from scale-oriented to quality-oriented,so the research on the eastern region is typical.On the basis of fully drawing on the mainstream economic theories,this paper sorts out the mechanism of foreign trade affecting the urban-rural income gap,and theoretically clarifies the logical relationship between them.Based on the actual situation in eastern China and the panel data of them from 2000 to 2017,this paper conducted an empirical study on the impact of foreign trade on the urban-rural income gap in eastern China.The Theil index is used to measure the income gap between urban and rural areas.It is used as the explanatory variable,and the foreign trade dependence is used as the explanatory variable.The degree of education,urbanization rate,foreign direct investment,economic development degree and marketization degree are introduced as control variables to analyze the impact of foreign trade on the urban-rural income gap in the eastern region.The research results show that foreign trade is an important factor affecting the urban-rural income gap in eastern China,mainly reflected in:First,foreign trade mainly affects the urban-rural income gap through commodity prices,technological advancement,foreign investment,and economic growth.Second,the impact of foreign trade dependence,export dependence and import dependence on the urban-rural income gap in eastern China is “inverted U-shaped”,in line with the “Kuznets hypothesis”.At present,they are all in the left half of the “inverted U-shaped” curve.That is,the eastern part of China will expand the urban-rural income gap with the increase of foreign trade dependence,export dependence and import dependence.However,in the long run,when they reach a certain level,the increase in trade volume will narrow the income gap between urban and rural areas.Third,the degree of influence of export trade and import trade is different.Import trade has a greater impact on the urban-rural income gap in the eastern region.Fourth,the impact of general trade on the urban-rural income gap in the eastern region is characterized by a shrinking effect,while processing trade is characterized by an expansion effect.Among them,the processing trade has a greater and more significant impact on the urban-rural income gap in the eastern region.