Impact Of Opening Up On Industry Income Gap In China

Over the past 40 years of reform and opening up,China’s foreign trade and foreign investment opening has continued to expand,and China’s foreign economy has made considerable progress.But at the same time,The fruits of economic growth brought about by opening-up are not shared equally by all industries.In other words,there is a certain income gap between industries,and this income gap is showing a trend of gradual expansion.The widening income gap will affect my country’s further strategic deployment and policies for opening up,as well as my country’s social stability and coordinated economic development.Therefore,analyze the correlation between my country’s opening-up activities and income disparity,and discuss what is the transmission mechanism? How large is the magnitude of the impact of opening-up on the income disparity? This will guide my country to narrow the industry’s income disparity and make the correct layout.my country’s further opening-up strategy is of great significance.In the theoretical research,this article reviews the relationship between opening up and income gap through traditional theories,and explores the theoretical basis of the impact of opening up on income gap from three theories of factor endowment theory,specific factor theory,and offshore outsourcing theory and factor supply and demand theory to explore the theoretical basis of FDI on income disparity.Then,it demonstrates the influence mechanism of opening to the outside world on industry income gap from the perspectives of employment effect,technology effect and industrial structure.In the empirical research,first,the opening up is divided into two parts: foreign trade and foreign investment opening to analyze the status quo,and analyze the scale of China’s opening up and the industry distribution of foreign investment.Secondly,the Theil index of income disparity in 19 sub-industry in 31 provinces in my country from 2005 to 2018 was calculated,and the wage disparity between industries was measured by combining the industry wage range and extreme value ratio changes.Finally,this article constructs an empirical model of the income gap of opening to the outside world,and adds employment variables,technical variables and industrial structure variables to the model based on the mechanism analysis,and explores the impact of foreign trade(imports and exports)and foreign capital inflows on industry income gaps.The main conclusions are as follows:First,in terms of trade,it is found that my country’s total import and export volume is on the rise,and the commodity trade structure is shifting to technology-intensive products.In terms of foreign capital,FDI has industry heterogeneity,and more and more foreign capital flows into technical industries.At the same time,the income gap between various industries in my country is still widening.The wage level in monopolistic and technical industries is relatively high,while the traditional labor-intensive wage level is relatively low.Second,the overall trade openness will widen the industry income gap,the import effect is negatively correlated,and the export effect is positively correlated.FDI will worsen and widen the industry income gap.The increase in employment variables and industrial structure variables will widen the industry income gap,and technological progress will reduce the industry income gap.Third,the impact of opening up on income disparity is regionally heterogeneous.The opening up of trade in the eastern region of my country will reduce the industry income gap,and the central and western regions will increase the income gap.FDI is positively correlated with income disparity in the three major regions.Fourth,in terms of control variables,the greater the degree of monopoly,the greater the industry income gap.Urbanization helps narrow the industry income gap.The current economic growth in my country will increase the industry income gap.Based on theoretical and empirical analysis,this article puts forward relevant policy recommendations for narrowing the industry income gap.First,we must increase the level of trade openness and optimize the pattern of regional opening;second,we must continue to improve the education and training policies for low-skilled workers,and narrow the income gap;third,we must promote the optimization and upgrading of industrial structure and improve the level of industrial technology;fourth,It is necessary to promote market-oriented reforms in monopoly industries and narrow the income gap between general industries and monopoly industries.Fifth,it is necessary to continuously promote the development of urbanization to ensure that urbanization dividends benefit most industries.