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Analysis on the Trend of China's Terms of Trade Based on Input-output Analysis

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DOI: 10.25236/ecomhs.2019.185

Author(s)

Lin Xiaoli

Corresponding Author

Lin Xiaoli

Abstract

With the deepening of reform and opening up to the outside world, China's economic development has attracted worldwide attention, and the total volume of import and export trade has grown rapidly. In international trade theory, terms of trade are defined as the quantity of imports that can be exchanged for each unit of export goods. Although the rapid development and accumulation of China's foreign trade has produced tremendous advantages, the world environment has changed dramatically, and China's domestic economic environment also has a variety of risks. The negative effect of import commodity structure on terms of trade indicates that with the increase of the proportion of imported primary products to industrial manufactures, the price terms of trade tend to decline. As one of the important indicators to measure the size of a country's trade gains, trade conditions have always been a hot topic in academic research. Based on the input-output analysis, this paper makes a reasonable improvement on the terms of trade. Consider the combination of price and trade conditions, income and trade conditions, and factor trade conditions. Objectively derive the changing trend of China's total price and trade conditions.

Keywords

Economic Development, Terms of Trade, Input and Output, Commodity Structure