The Foreign Trade of Domestic and External Sectors of the Chinese Economy

Dmitry Izotov

Spatial Economics=Prostranstvennaya Ekonomika, 2012, issue 4, 49-66

Abstract: The author estimates the reaction of the foreign trade of domestic and external sectors of the Chinese economy on the increase in the wages growth pace. On the basis of Chinese and international statistics for the period of 2001–2011 the author analyzes the structure of the foreign trade of domestic and external sectors of Chinese economy and estimates the factors of its dynamics. The article shows that the most dynamically developing segments of the domestic sector are private enterprises and the leaders of the external sector are TNCs. With the help of regression analysis the author proves that the increase in wages has the same negative impact on exports of both sectors; however, the export of private enterprises will be affected the most by the adverse impacts. It is determined that the increase in wages contributes to the reduction of the external sector imports and the domestic sector imports growth will be ensured by the internal demand mechanisms, mainly, with the help of private enterprises. The article shows that the increase of salaries contributes to the reduction of the positive trade balance of China at the expense of the domestic sector; however, the positive balance of the external sector (TNCs) will remain practically the same because of its very close links with the global markets of goods, capital and labour. So only the fluctuations of these markets can significantly influence the parameters of the external sector trade

Keywords: export; import; domestic sector; external sector; private enterprises; TNCs; trade; tolling; balance of trade; wages; China (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:far:spaeco:y:2012:i:4:p:49-66

DOI: 10.14530/se.2012.4.049-066

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