Abstract: After joining the World Trade Organization, China's foreign trade has entered a stage of rapid development. During this period, China's dependence on foreign trade has been rising. Based on the analysis of the changes and reasons of China's dependence on foreign trade, this paper focuses on the impact of the rising dependence on foreign trade on China's economy, and puts forward how to reasonably regulate the dependence on foreign trade.
Keywords: foreign trade dependence, trade structure, foreign trade development strategy
Since joining the WTO, China's foreign trade has grown strongly, and its dependence on foreign trade has also risen sharply. 1980, China's dependence on foreign trade was only 12.5%, and 1990 exceeded 30%, reaching 44% in 2000. Especially in recent years, the dependence on foreign trade has been increasing at an annual rate of more than 10%, from 48.8% in 2002 to 48.8% in 2003. According to the data of WTO and IMF, the global dependence on foreign trade was 25.4% in 1960, rising to 38.7% in 1990 and approaching 45% in 2003. China's dependence on foreign trade has exceeded the world average, and is far higher than that of the United States, Japan, India, Brazil and other economic powers. On the one hand, it shows that China's participation in the process of global integration is accelerating, the demand of foreign markets has become an important driving force for China's domestic economic growth, and China's economy and the world economy have formed an interdependent partnership. On the other hand, excessive dependence on trade also exposes many disadvantages such as concentrated trade destinations, unreasonable foreign trade commodity structure, and increasing dependence on strategic resource products.
Factors Affecting China's Dependence on Foreign Trade
According to the commonly used calculation method, foreign trade dependence refers to the ratio of a country's total foreign trade to GDP, which is not only used to measure a country's economic dependence on the international market, but also reflects a country's economic openness. International experience shows that the dependence on foreign trade can't be really measured by figures and total trade, because there are many factors that affect and exaggerate China's dependence on foreign trade. Specifically, the reasons for China's high dependence on foreign trade are as follows:
Processing trade accounts for a large proportion in the foreign trade structure. In 2005, the total import and export volume of processing trade was US$ 690.5 billion, accounting for 48.6% of the total import and export volume and almost half of the total trade volume. Because foreign processing only charges a small amount of labor costs, there is not much added value, and the matching rate of domestic procurement is also low, that is, China imports a large number of raw materials and intermediate products from other countries, and then exports them abroad after assembly. This import and export is divided by the GDP summary of that year, which makes the dependence on foreign trade obviously inflated.
The domestic industrial structure is dominated by manufacturing industry, and the proportion of tertiary industry is low, which is an important reason for the high dependence on foreign trade. Generally speaking, due to the low tradeability of the tertiary industry, the higher the proportion of the tertiary industry in GDP composition, the lower the dependence on foreign trade may be. At present, the proportion of the tertiary industry in GDP in the United States has exceeded 75%, while that in China is only about 33%.
The growth rate of foreign trade is obviously higher than that of GDP. The denominator-GDP growth rate has averaged only about 9% in recent years, while the numerator-foreign trade import and export average growth rate has reached more than 30%. When GDP keeps a relatively stable growth rate, the higher the growth rate of foreign trade, the faster its relative growth rate and the higher its dependence on foreign trade.
The change of exchange rate directly affects the degree of dependence on foreign trade. Generally speaking, the undervaluation of RMB is another important reason for China's increasing dependence on foreign trade. According to the current exchange rate, China's dependence on foreign trade is really high. However, according to the World Bank's estimation of purchasing power parity, the purchasing power parity between RMB and USD is 4: 1. According to this calculation, China's dependence on foreign trade will be reduced by half, which is lower than the world average.
China's high dependence on foreign trade is an inevitable reflection of China's economic structure that relies too much on foreign-funded enterprises. According to the statistics of the Ministry of Commerce, foreign-funded enterprises accounted for 77% of the top 200 enterprises in China in 2004. Among the 500 enterprises with the largest import and export volume, foreign-funded enterprises account for 62%. Judging from the proportion of dependence on foreign trade, a large part of China's huge foreign trade is actually created by foreign-funded enterprises in China, especially in export. From 200 1 to 2004, the export of foreign-invested enterprises accounted for 50. 1%, 52.2%, 54.8% and 57.6634.199999999996. From the denominator of this ratio, GDP also includes the contribution of foreign-invested enterprises in China. It can be seen that the business behavior of foreign-funded enterprises "big in and big out, two ends out" has also increased the dependence on foreign trade to a certain extent.
The Impact of Increasing Dependence on Foreign Trade on China's Economy
In fact, the dependence on foreign trade is a "double-edged sword". Its perfection and change, on the one hand, will help China to participate more actively in the international economy and improve its economic status and influence, on the other hand, it will also bring new risks and influences to China's economic development. Generally speaking, with the continuous growth of China's foreign trade, the increasing dependence on foreign trade will bring different degrees of influence to foreign trade and domestic economic development. These effects mainly include:
Foreign trade friction has intensified.
Due to the continuous expansion of China's export scale, foreign investigations on anti-dumping and safeguard measures against China's export products have obviously increased. During the Tenth Five-Year Plan period, the number of anti-dumping cases filed in China was 200 1 55, 20251200347 and 2004 57 respectively. In 2005, China's foreign trade friction entered a "high-incidence period" and was repeatedly investigated by the United States, the European Union, India and other countries and regions. China has become the country that has suffered the most anti-dumping investigations in the world. In addition, countervailing, green barriers, technical barriers and other issues have also become the way for other countries and regions to deal with our products. It can be seen that the development of China's foreign trade and the increasing dependence on foreign trade will inevitably bring China's foreign trade into an era of international economic friction.
Affect national economic security
The high dependence on the import of energy, mineral resources, some key equipment and parts will easily lead to the economic lifeline of the country being controlled by people. Once the international economy fluctuates greatly, it will inevitably cause some difficulties in the domestic economy. At present, China's dependence on foreign oil is about 35%. According to experts' estimation, by 2020, China's dependence on foreign oil will reach 60%, and more than half of China's oil supply will depend on international supply. How to effectively reduce the external dependence of China's important strategic resources is an important issue that we need to pay serious attention to and solve. In addition, at present, China's imported goods are mainly manufactured goods, among which capital products and high-tech products occupy a dominant position, which reflects the high dependence of China's domestic industries on international high-tech and capital products and the relative backwardness of China's domestic industrial research and development. With the increasing import of important strategic materials, key products and technologies, the impact of imports on national economic security will further increase.
Affect the development of domestic industries.
China has a high degree of dependence on foreign trade, which is mainly manifested in its comparative advantage in the export of labor-intensive products. Therefore, textiles, clothing, shoes, toys and other products have always been China's bulk export commodities, but the supply of these industries has actually exceeded the demand. The continuous expansion of this low value-added industry is not conducive to the upgrading of China's domestic industrial structure, which increases the difficulty of achieving the goal of improving the competitive advantage of foreign trade. The increasing dependence on foreign trade highlights that the development of China's industrial structure is unreasonable and the development of the tertiary industry is still lagging behind.
Deterioration of terms of trade
China exports mainly labor-intensive products, while imports mainly capital and technology-intensive products. Generally speaking, the former has higher price elasticity of supply and demand, while the latter has lower price elasticity of supply and demand. This asymmetry in price elasticity between supply and demand leads to China's demand for imported products more dependent on China's supply than other countries in terms of capital and technology-intensive products. Especially in recent years, the demand price elasticity of a large number of energy and various resource products imported by China is low, that is to say, no matter what happens in the international market price, China's import demand will maintain a certain growth, and China is a big country. Once imported in large quantities, it will also cause the international market price to rise, which will not only aggravate China's dependence on overseas energy products, but also worsen the terms of trade and reduce China's economic welfare.
Measures for Reasonable Adjustment of Dependence on Foreign Trade
The future trend of foreign trade dependence is determined by the relative speed of foreign trade and economic development, the changing trend of exchange rate and inflation rate and other factors. In view of the influence of dependence on foreign trade on the economy, it is necessary for us to rationally regulate dependence on foreign trade and strive for a favorable international environment for China to realize a well-off society in an all-round way.
China should continue to open wider to the outside world and use Scientific Outlook on Development to guide the development of foreign trade. At present, governments of all localities and departments have set the annual total foreign economic development target. One-sided pursuit of quantitative expansion not only leads to the failure of foreign trade benefits to keep up with the improvement of foreign trade product quality, but also leads to excessive inefficient foreign trade and low-quality foreign investment. Therefore, we should formulate a quality index system, scientifically judge the effect of foreign trade policies and their implementation, establish "winning by quality" as the core of the whole foreign trade policy, maximize benefits and minimize the use of energy resources, which is conducive to improving the quality of economic operation and the core competitiveness of foreign trade, and promoting China's progress from a trading power to a trading power.
While developing foreign trade, we should insist on expanding domestic demand as a long-term strategic policy and the basic foothold of economic development. Insufficient domestic demand has strengthened our dependence on foreign markets. Faced with this situation, in order to improve China's economy's tolerance and digestion of external economic risks, we must rely on expanding domestic demand to maintain long-term economic stability and development. To this end, we should implement a dual-oriented strategy of export and domestic demand, both export-oriented and not to give up our own market to others. Establish and improve the social security system by legal means, ensure the sustained growth of national wages, increase national income, improve residents' expectations, increase effective supply, and improve the role and status of domestic demand in stimulating economic growth.
Promote the upgrading and transformation of processing trade and achieve equality between domestic and foreign investment. At present, processing trade still faces many problems. It is necessary to further improve the quality of processing trade, increase its contribution to domestic economic development, and accelerate the transformation and upgrading of processing trade. In terms of domestic and foreign investment, China should establish a truly fair and equal business environment for domestic and foreign-funded enterprises in accordance with the principle of fair competition in the market economy and the principle of national treatment in the WTO, so as to avoid China's economy falling into the trap of import dependence.
China should open its service market and vigorously develop its service trade. Trade in services is an area with the greatest growth potential in modern economy. From the analysis of the economic development track of the world's open economic powers, the overall growth of service trade not only optimizes a country's industrial structure, expands the economic scale of GDP, reduces the dependence on foreign trade, but also enhances the international competitiveness of trade through the export of service trade products. It can be seen that vigorously developing service trade is an important task for China's economic and foreign trade development. It is necessary to strengthen policy coordination and guidance, speed up the internationalization of service trade, support domestic powerful enterprises to "go global", and especially encourage China's superior service trade exports to participate in international division of labor and competition at a higher level.
Pay attention to the structural indicators of import and export dependence of China's important industries and products, promote the diversification of foreign trade market and the optimization strategy of export product structure, so as to reduce dependence on specific trading partners and specific import and export commodities, ensure national economic security, and reduce the high dependence on the international market caused by the asymmetric elasticity of supply and demand of import and export products.
Improve the domestic economic accounting system to accurately reflect the economic aggregate and its changes. On the basis of summarizing the experience of China's statistical reform and referring to international practices, we should reform the current domestic economic accounting and data dissemination system, improve the scientific, standardized and international level of China's GDP accounting, improve the transparency of GDP accounting and the credibility of data, and make GDP data reflect the actual situation of China's national economic development more objectively and accurately.
Improve the RMB exchange rate formation mechanism and keep the RMB exchange rate basically stable at a reasonable and balanced level. The depreciation of RMB is one of the important reasons to stimulate the rapid growth of China's foreign trade, and it is also the main factor leading to the increasing dependence on foreign trade. In recent years, with the rapid growth of China's export scale and the increase of its trade surplus, Japan and developed countries in Europe and America have put forward demands for RMB appreciation. Therefore, on July 2, 2005, the People's Bank of China announced the implementation of a managed floating exchange rate system based on market supply and demand and with reference to a basket of currencies. Appropriate adjustment of RMB exchange rate can reduce the dependence on foreign trade and reduce trade friction to a certain extent.
To sum up, in order to develop foreign trade scientifically and make China's national economy develop in a balanced way, the external dependence of economic development must be moderate. Otherwise, it will inevitably bring some side effects, which is not conducive to the coordinated development of the entire national economy.
References:
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