Why oppose trade protectionism in the global crisis? Whether the fluctuation of output is greater than that of consumption, or the fluctuation of consumption is greater than that of output, trade, especially net exports, has always been a very important smooth channel in economic cyclical adjustment. Therefore, the free trade system should be firmly defended by all countries in the world. For China, a country whose economic development has just taken off and domestic demand is insufficient, China needs trade liberalization more than any other country. China must not give up the export-oriented development strategy rashly, but should start from the existing endowment conditions and create more employment opportunities by actively increasing exports on the premise of maintaining the stability of the RMB exchange rate, so as to maintain stable economic growth. The contribution of China people's trade to economic growth is enormous. From a static point of view, trade can enhance national welfare, and from a dynamic point of view, trade can bring "learning by doing" effect. If we further put the role of trade in different stages of economic growth together, we can also find that trade has become the most important engine of economic growth for those countries that are in the early stage of industrialization and have a serious shortage of domestic demand. Because of this, in the history of world economic development, those countries in the early stage of industrialization almost invariably chose the export-oriented economic development strategy in order to obtain the driving force of economic growth through foreign trade, especially exports. Recent research literature shows that trade also has countercyclical effect. We can roughly distinguish the following two situations to discuss this: one is that the fluctuation of domestic output (GDP) is greater than that of consumption (household consumption expenditure). The reason may be related to the following factors: or because the adjustment cost of investment is low; Or because the wage rate is too stable. For a country in the period of economic expansion, because economic growth depends on extensional investment rather than structural adjustment, the replacement cost and precipitation cost in the total adjustment are relatively low, so it responds quickly to economic cyclical fluctuations. The excessive stability of wage rate is largely caused by the excessive number of unemployed people. Because of the existence of too many unemployed people, it will inevitably cause great pressure on the rise of wage rate, which will inevitably lead to economic growth, but the wage rate cannot rise with economic growth. When the fluctuation of domestic output is greater than that of consumption, a country's net export (the balance of exports minus imports) can play a countercyclical role. The mechanism can be simply described as: when the economy is prosperous, there are investment opportunities in China, so the rational approach is of course to borrow from abroad and increase domestic investment in fixed assets, which will lead to an increase in domestic demand and a decrease in exports. At this time, the balance of payments relies on the surplus under the capital account to hedge the deficit under the current account; When the economy is in recession, there are no investment opportunities in China. At this time, the rational approach is of course to repay the foreign debt. Therefore, it is necessary to increase exports to obtain foreign exchange to repay foreign debts. Therefore, the balance of payments deficit under the capital account can be balanced by the surplus under the current account. From the above description, we can clearly see that the net export adjustment caused by export changes has a very obvious regulatory effect on balancing the imbalance of international payments caused by economic cycle fluctuations. Another situation is that the fluctuation range of domestic output is smaller than that of consumption. The reasons for this situation can be analyzed from the perspectives of investment and consumption respectively: from the perspective of investment, when a country's economic development enters a relatively developed stage, the fluctuation range of investment adjustment is small because of the high cost of investment adjustment (including replacement cost and precipitation cost), and the fluctuation range of domestic output will also decrease because of the small fluctuation range of investment adjustment; From the perspective of consumption expenditure, due to the economic development and the disappearance of stock unemployment, the wage rate will show an upward trend. When people's wage income reaches a certain level, savings and investment will be generated, thus forming the so-called asset income. Moreover, when the wage rate is high enough, the substitution effect of income and leisure will occur, that is, when the wage level is high, people will replace employment with leisure (reduce labor supply) in order to maximize the total consumption level including material consumption and spiritual consumption. In this way, people's consumption expenditure will fluctuate greatly with the cyclical fluctuation of the economy, that is, reducing the labor supply to enjoy leisure when the economy is prosperous, and increasing the labor supply when the economy is in recession to ensure that the basic living standard will not decline. With the above analysis, we can discuss the trade adjustment when the fluctuation of consumption expenditure is greater than that of investment: when the economy is in a prosperous period, the so-called adjustment stickiness is caused by the high replacement and precipitation cost of investment adjustment, so the investment adjustment is small. On the other hand, due to economic prosperity, wages tend to rise, so people's rational behavior is to replace employment with leisure. In addition, it is precisely because of economic prosperity that asset prices tend to rise, and with the rise of asset prices, people's asset income will also increase, which is commonly known as the "wealth effect." When wages and asset prices rise at the same time, people's consumption expenditure level will of course tend to increase, but when the adjustment of investment or production can't keep up with the increase of consumption expenditure because of stickiness, exports will decline and imports will increase, so the net exports after subtracting the two will tend to decline; On the contrary, in the economic recession, with the increase of unemployment, the gradual downward adjustment of wages and the decline of asset prices, people will smooth their consumption level by increasing labor supply and reducing leisure and consumption expenditures, thus leading to the phenomenon of reduced imports and increased exports. After subtracting the two, the net export will increase. From the above analysis, we can still clearly see that the smooth change of net exports based on consumption is countercyclical. Undoubtedly, whether the fluctuation of output is greater than that of consumption or the fluctuation of consumption is greater than that of output, trade, especially net exports, has always been a very important smooth channel in the cyclical adjustment of the economy. Therefore, the free trade system should be firmly defended by all countries in the world. If all countries in the world choose the policy of trade protectionism and free trade no longer exists, then all countries will eventually suffer huge welfare losses because they cannot smooth the impact of economic cycle fluctuations. According to relevant statistics, the financial crisis that happened in China (0.325, 0.00, 0.00%) in 1929 quickly turned into an economic crisis that spread all over the world, because the countries concerned adopted protectionist policies one after another, which reduced the global trade volume by nearly 70% and completely destroyed the function of smoothing the periodic fluctuation of trade. In view of this, in today's global financial crisis, only by resolutely opposing trade protectionism can we prevent this global financial crisis from further deteriorating into the Great Depression like 1929- 1933. China is a developing country, with a per capita GDP of just over 3,000 US dollars, so it is still in the stage of economic take-off. The basic feature of this stage is insufficient domestic demand. We have analyzed it in the last article, because a large number of stock unemployment has restrained the rise of wage rate. For China, a country whose economic development has just taken off and its domestic demand is insufficient, the fluctuation range of its output is bound to be greater than that of its consumption expenditure. Therefore, for those countries whose consumption expenditure fluctuates more than their output, China needs to rely on trade to smooth it out in order to maintain its current output level. Therefore, China needs trade liberalization more than any other country. After the crisis, China's major trading partners experienced severe economic recession, so more and more people think that China's export is hopeless, and the focus of policy should be shifted to domestic demand. Is this view correct? Judging from the actual situation in China, such a policy orientation may take great risks, because: first, considering the current employment situation and wage level in China, it is almost impossible to effectively increase people's consumption expenditure in a short period of time; Second, at present, most of the goods exported by China have the following two characteristics: first, they are not irreplaceable with the products of exporting countries, and many products are even complementary, so China's exports will not pose a trade shock to other countries; Second, most of the commodities exported by China belong to commodities with high price elasticity. As long as the price is right, they can still get a considerable international market. In this case, China must not rashly abandon its export-oriented development strategy, but should actively increase its exports to create more employment opportunities and maintain stable economic growth on the premise of maintaining the stability of the RMB exchange rate based on China's existing endowment conditions.