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Study on China’s Foreign Trade Policy in the Period of Economic Transformation

Author: GuanJiaZuo
Tutor: SongDongLin
School: Jilin University
Course: Political Economics
Keywords: foreign trade policy intervention index (G) revealed symmetry comparativeadvantage index of trade (TRSCA) dual economy insufficient demand
CLC: F752.0
Type: PhD thesis
Year: 2013
Downloads: 1456
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Abstract


Foreign trade policy, as an important part of a country’s economic policies, is aneffective way to improve macroeconomic aggregates, an important means to adjusteconomic structure and a commonly used tool to guide enterprise behaviors. Since thereform and opening up, China’s foreign trade has developed rapidly with anincreasing volume of total imports and exports. Foreign trade structure has alsoimproved. After the14th Party Congress in1992, China confirmed its socialist marketeconomic system reform. China’s foreign trade in goods has achieved trade surplusfor19years since1994, which not only benefited from the vitality of the open market,but also benefited from government’s positive policy interventions on the process oftransformation from a planned economic system to a socialism market economicsystem.Based on free trade theory, in the use of scientific empirical analysis, thisdissertation tries to quantity government interventions in foreign trade activities andbuilds the foreign trade policy intervention index (G) to order to judge a country’sreal foreign trade policy orientation. Further, this dissertation continues to explore thecauses and performance of China’s foreign trade policy, providing empirical basis forChina’s foreign trade policy adjustments under the new situations.The dissertation is divided into eight chapters as follows:Chapter Ⅰ, Introduction. This chapter introduces the research background and thesignificance of this study, the definition of basic concepts, research methods,structural arrangements and the innovation and inadequacies of the dissertation.Chapter Ⅱ, Theoretical Basis and Literature Review of Foreign Trade Policy. Thetheoretical basis of a country’s foreign trade policy basically follows two main lines:one is to improve national welfare;the other is to achieve national economic goals. Inaccordance with the above logical thinking, after the review of the main theories of a country’s foreign trade polices, this chapter provides the theoretical basis to theconstruction of the theoretical framework of the dissertation.Chapter Ⅲ, General Analysis of China’s Foreign Trade Policy. This chapterintroduces the evolution of foreign trade policies in developing countries based on themethod of historical materialism of Marx, and then reviews the status and evolutionof China’s foreign trade policies. Then, this chapter summaries the basiccharacteristics of China’s foreign trade policy by citing different policy instruments inthe transformation period.Chapter Ⅳ, Construction of China’s Foreign Trade Policy Orientation IndexSystem. This chapter focuses on the construction of foreign trade policy interventionindex based on the revealed symmetry comparative advantage index of trade (TRSCA)and trade specialization coefficient (TSC),providing basis for calculating China’sforeign trade policy orientation.Chapter Ⅴ, Dynamic Analysis of China’s Foreign Trade Policy Orientation in theTransformation Period. Base on the measurement criteria established in accordancewith the previous chapter, this chapter intends to measure China’s foreign trade policyclassification and overall orientations using data ranging from1987-2011. Thischapter firstly calculates the classification orientation for11categories of foreigntrade goods, and then measures the overall orientation for239kinds of products onthe basis of the weighted average of China’s foreign trade goods.Chapter Ⅵ, Influencing Factors of China’s Foreign Trade Policy in theTransformation Period. This chapter demonstrates the three main factors in theformation of China’s foreign trade policy by combining China’s economicdevelopment objectives, structural adjustment goals and the most serious economicproblem. In the transformation period, the main economic development goal issustained economic growth, the most important structural goal is the urban and ruraldual economic transformation and the most prominent problem is the long-term lackof demand for domestic consumption. The three factors above have played a vital rolein the formation of in the formation of China’s foreign trade policy orientations, bothclassification and overall orientations.Chapter Ⅶ, Causes and Performances on China’s Foreign Trade PolicyOrientation in Economic Transformation Period. This chapter focuses on the use of time series analysis method to demonstrate causes and performances of China’sforeign trade policy orientation in economic transformation period. This chapter useddata ranging from1987-2011to include indicators of China’s overall foreign tradepolicy orientation, economic growth rate, urban-rural dual structural conversion, andthe lack of domestic consumer demand into a multivariate model for analysis.Chapter Ⅷ, Conclusions and Suggestions. Based on the above normative andpositive analysis, we can draw the following conclusions: First, since the reform andopening up, the trends in the evolution of China’s foreign trade policy orientationfeatures on problem-oriented characteristics, the same as China’s economic systemreform. Second, from the aspect of classification orientation, China has beensupporting strongly the export of low-technology products which have alreadyobtained comparative advantage and the export of high-tech products which have justshow the comparative advantage, while discouraging the export ofmedium-technology products, primary products and resource-based products whichhave not obtained comparative advantage or have lost comparative advantage.Third,from the aspect of overall orientation,China’s overall orientation of foreigntrade policy was export-oriented Which focused on improving the competitiveness ofChina’s products. The formation of this policy orientation has close relations withChina’s economic development goal,the conversion of urban-rural dual economy andthe insufficient domestic consumption demand during the period of economictransformation. Time analysis shows that steady economic growth,convention ofurban-rural dual economy and the insufficient domestic consumption demandconstitute the intrinsic motivation of China’s foreign trade policy. The empiricalanalysis shows that the impacts of China’s export-oriented foreign trade policyoverall orientation based on “super-comparative advantage”(Destructive Enthusiasm)on economic growth, the conversion of urban-rural dual economy and the insufficientdomestic consumption demand are not significant, which would constitute a strongevidence to adjust China’s recent foreign trade policy overall orientation. Combinedwith the international and domestic constrains, appropriate measure should be takento expand imports, while export and import growth rates should not be slowed down.

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CLC: > Economic > Trade and Economic > States foreign trade > China's foreign trade > Principle of policy and its elaborate
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